Supply Manual Version 2017-5

2/19/2018 Supply Manual version 2017-5 - Procurement Information on Buyandsell.gc.
ca
Supply Manual
Version: 2017-5
Effective date: 2017-11-28
Prepared by: Strategic Policy Sector, Public Works and Government Services Canada, Government of Canada
Information: Publiservice Disclaimer

The Publiservice icon that appears beside the link text means the information is only accessible to federal
government department and agency employees.
The Supply Manual contains policies and procedures, as well as references to acts and directives, for the
procurement of goods, services and construction. The Manual is intended primarily for the use of Public Works and
Government Services Canada (PWGSC) contracting officers acting in PWGSC's capacity as a common services
provider, to conduct procurements on behalf of other organizations.
file:///C:/Users/protectedsun/Downloads/supply-manual-full-html-version.2017-5.html/New%20Folder/supply-manual-full-html-version.2017-5.html 1/778
2/19/2018 Supply Manual version 2017-5 - Procurement Information on Buyandsell.gc.ca
Table of Contents
1 Chapter 1 - Public Procurement
1.1 Overview or public procurement
1.5 About the Supply Manual
1.5.1 Organization of the Manual
1.5.5 Supply Manual Format
1.10 PWGSC Procurement Process
1.10.1 Integrity
1.10.5 Guiding Principles
1.10.10 Procurement best practices
1.15 The Legal Framework of Contracting
1.20 Statutes and Regulations
1.20.1 Department of Public Works and Government Services Act
1.20.5 Financial Administration Act and the Government Contracts Regulations
1.20.10 Defence Production Act
1.20.15 Federal Accountability Act
1.20.20 Other Acts
1.25 Agreements
1.25.1 International and National Trade Agreements
1.25.5 North American Free Trade Agreement (NAFTA)
1.25.10 World Trade Organization Agreement on Government Procurement (WTO-AGP)
1.25.11 Canada-European Union Comprehensive Economic and Trade Agreement (CETA)
1.25.14 Canadian Free Trade Agreement (CFTA)
1.25.15 Agreement on Internal Trade (AIT)
1.25.16 Bilateral Free Trade Agreements
1.25.20 Comprehensive Land Claims Agreements
1.25.25 Other Agreements
1.30 Policies, Directives and Guidelines
1.30.1 Treasury Board
1.30.5 Treasury Board Contracting Policy
1.30.10 Treasury Board Common Services Policy
1.30.15 Treasury Board Contracts Directive
1.30.20 Treasury Board Procurement Review Policy
1.30.25 Code of Conduct for Procurement
1.35 Challenge Process
1.35.1 Canadian International Trade Tribunal
1.35.5 Procurement Ombudsman
1.40 Departmental Delegation of Authority
1.40.1 Use of Judgment and Knowledge

1.40.5 Contract Approval and Signing Authorities
1.45 Division of Responsibilities between PWGSC and Client Departments
1.45.1 Litigation Costs
1.50 Fairness monitoring
1.55 Commodity Management
1.55.1 Overview of commodity management
1.55.5 Goals and Benefits of Commodity Management
1.55.10 Pre-competed Procurement Instruments
1.60 Environmental Considerations
1.60.1 Green Procurement Policy
1.60.5 Office of Greening Government Operations
1.65 Policy on government security
1.70 Privacy in Contracting
Annex 1.1: Matrix of Responsibilities
Annex 1.1.1: Matrix of responsibilities between Public Works and Government Services Canada and client
departments for the procurement of goods and services (generic)
Annex 1.1.2: Specific Division of Responsibilities Agreements
Section A 1.1.2.1: Division of Responsibilities between Public Works and Government Services Canada
(PWGSC) and Department of National Defence (DND) for the Acquisition of Goods and Services
Section B 1.1.2.2: Division of Responsibilities between PWGSC and DND for the Quality Assurance of
Materiel and Services
Annex 1.2: Memorandum of understanding between the Royal Canadian Mounted Police and the Canadian
Industrial Security Directorate
Annex 1.3: Canadian Border Services Agency (CBSA) - Security Requirements when Public Works and
Government Services Canada (PWGSC) does the procurement
2 Chapter 2 - Defining the Requirement and Requisition Receipt
2.1 Requirements Definition
2.5 Project Approvals
2.10 Special procurements
2.15 Agreement with Other Governments Departments or Agencies
2.16 Aboriginal Consultation and Accommodation
2.20 Green Procurement and Defining the Requirement
2.25 Requisitions subject to Comprehensive Land Claims Agreements
2.26 Early Engagement with Clients, Suppliers and Public Works and Government Services Canada
(PWGSC) Contracting Officers
2.30 Requisition Receipt
2.30.1 Funding
2.30.5 Requisition Allocation within Public Works and Government Services Canada
2.30.10 Allocation of Work by Complexity

2.30.15 Complexity Code
2.30.20 Changes to the Complexity Level
2.35 Extract Files
2.35.1 Part Files
2.40 Price and Availability Enquiries
2.45 Requests for Information and Letters of Interest
2.50 Industrial Security Requirements
2.50.1 Security and requisitions
2.50.5 Security Requirements Check List (SRCL)
2.55 Employer-Employee Relationships
2.60 Requisition Review
2.65 Procurement Process Initiated by Client
2.70 Ratification by Treasury Board
2.75 Confirming Orders
Annex 2.1: Requisition Review
Annex 2.2: Green Procurement: Environmental Factors and Evaluation Indicators
Annex 2.3: List of Public Works and Government Services Canada allocations units
Annex 2.4: Characteristics of Acquisitions Program Procurement Complexity Levels
Annex 2.5: Entering Complexity Code into the Automated Buyer Environment
3 Chapter 3 - Procurement Strategy
3.1 Procurement strategy - Introduction
3.1.1 Planning the Procurement
3.1.5 Procurement Risk Assessments for Complexity Level 1, 2 and 3 Procurements
3.1.10 Addressing Identified Risks in the Approval Document
3.1.15 Complex Procurement
3.5 Existing Procurement Instruments
3.5.1 Mandatory Standing Offers and Supply Arrangements
3.10 Competitive Contracting Process
3.15 Non-competitive contracting process
3.15.1 Justification of Non-competitive Process
3.15.2 Code of Conduct (Sole Source of Supply)
3.15.5 Advance Contract Award Notice
3.15.5.1 Advance Contract Award Notice Time Limit
3.15.5.5 Procedures for Posting an Advance Contract Award Notice
3.15.5.10 Statement of Capabilities (Challenge Process)
3.15.5.15 Advance Contract Award Notice Exceptions
3.15.5.20 Documenting the Procurement File
3.20 Procurement Schedule
3.21 Managing Urgent Acquisitions

3.22 Emergency Requirements (Public Works and Government Services Canada as Contracting Authority)
3.22.5 Exceptions to Processes when an Emergency
3.22.10 Emergency Requirements (Government Departments and Agencies)
3.22.15 Additional Considerations on Managing Emergency Requirements
3.25 Trade Agreements Tendering Approaches
3.30 Methods of Supply
3.35 Contracts
3.35.1 Contracts with Task Authorizations
3.35.1.1 Definition
3.35.1.5 Application
3.35.1.10 Conditions of Use
3.35.1.15 Approval Documents for Contracts with Task Authorizations
3.35.1.20 Bid solicitations and resulting contract documents
3.35.1.25 Forms
3.35.1.30 Setting financial limits on Individual Task Authorizations
3.35.1.35 Separation of Duties
3.35.1.40 Authorizing and Issuing Task Authorizations
3.35.1.45 Administration of the Task Authorizations by Public Works and Government Services Canada's
Clients
3.35.1.50 Revision of a Task Authorization by the Client
3.35.1.55 Monitoring and Oversight
3.35.1.60 Reporting of Contracts with Task Authorizations
3.40 Standing offer method of supply
3.45 Supply arrangement method of supply
3.50 Procurements Subject to Trade Agreements
3.50.1 General procurement
3.50.5 Applicability of Trade Agreements to Standing Offers and Supply Arrangements
3.51 Integrity Overview
3.55 Industrial Security Requirements (Personnel or Organization)
3.55.1 Security and Timelines
3.60 Low Dollar Value Procurements
3.60.1 Requirements
3.60.5 Geographic Factors and Low Dollar Value
3.65 Green Procurement Strategy
3.70 Procurement Review
3.75 Small and Medium Enterprise
3.75.1 Office of Small and Medium Enterprises Role and Initiatives
3.75.5 Public Works and Government Services Canada On-Line Tools/Services and Office of Small and
Medium Enterprises Role
3.80 Requisitions subject to Comprehensive Land Claims Agreements (CLCAs)
3.85 Procurement Strategy for Aboriginal Business
3.90 Contracting with former public servants
3.95 Intellectual Property (IP)
3.100 Vendor Performance Corrective Measures
3.105 National Security Exceptions
3.105.1 Trade Agreements and Invoking a National Security Exception
3.105.5 Texts of the National Security Exceptions
3.105.10 Procedures for Invoking a National Security Exception
3.110 Legal Services
3.115 Bidders' Conferences
3.116 Site Visits
3.120 Roles and Memorandum of Understanding
3.125 Canadian Commercial Corporation
3.130 Canadian Content
3.135 Fairness Monitors
3.140 Life Cycle Costing
3.140.1 General Requirements
3.145 Cost and Profit
3.150 Standards and Quality Assurance
3.150.1 Standards, Specifications and Purchase Descriptions
3.150.5 Government Quality Assurance at Source
3.150.10 Listing Programs
3.150.15 Department of National Defence Qualified Products Lists
3.150.20 Canadian General Standard Board
3.150.20.1 Overview of the Canadian General Standard Board
3.150.20.5 New Standards, Specifications or Listings
3.150.25 Electrical Equipment
3.155 Acquisition Cards
3.155.1 Acquisition Cards In Contracting
3.155.5 Acquisition Card Management
3.160 Royalty Payments and License Agreements
3.165 Controlled Goods
3.170 Shipbuilding, Repair, Refit and Modernization
3.170.1 Information to be included in Notice of Proposed Procurement and Contract Award Notice
3.170.5 Shipbuilding Procurement
3.170.10 Ship repair, refit and modernization
3.175 United States Defense Related Procurement

3.176 Public Works and Government Services Canada Europe Office Procurement – Germany
3.180 Joint Certification Program
3.185 Foreign Military Sales
3.190 U.S. Defense Priorities and Allocations System
3.195 Risk Management
3.195.1 Treasury Board Secretariat Risk Management Policy
3.195.5 Risk Management Process for Limiting a Contractor's Liability
3.195.5.1 Risk management process for limiting a contractor's liability - General information
3.195.5.5 Risk Assessment
3.195.5.10 Risk Control
3.195.5.15 Risk Financing
3.200 Contractor Liability
3.200.1 Contractor liability - General information
3.200.5 Indemnification
3.205 Review Process for Creation, Renewal and Extension of Standing Offers and Supply Arrangements
3.205.1 Review Process
3.205.5 Posting Standing Offer and Supply Arrangement Information to the Standing Offer Index
3.205.10 Use of Departmental Standard Procurement Documents
3.205.15 Reporting Usage Data
Annex 3.1: Treasury Board Questions for Sole Source
Annex 3.2: Limited Tendering Reasons contained in the Trade Agreements
Annex 3.3: Model Content of an Advance Contract Award Notice
Annex 3.4: Task Authorization
Annex 3.4.1: A Guide to Preparing and Administering Task Authorization for Public Works and
Government Services Canada Clients
Annex 3.4.2: Record of Agreement Template – for Public Works and Government Services Canada Clients
Annex 3.5: Procurement Review Committee Requirements and Approval Process
Annex 3.6: Canadian Content Policy
Annex 3.7: National Security Exception Request Letter – Template
Annex 3.8: Comparison of Different methods of Supply
4 Chapter 4 - Solicitation Process
4.1 Solicitation process - Introduction
4.5 Pre-Solicitation Requests
4.5.1 Price and Availability Enquiry
4.5.5 Request for Information or Letter of Interest
4.10 Solicitation Methods
4.10.1 Request for Quotation
4.10.5 Telephone Buy
4.10.10 Invitation to Tender

4.10.15 Bid Solicitation
4.10.20 Request for Standing Offers
4.10.20.1 Standing Offer Procedures
4.10.20.5 Ranking and Methodology for Standing Offers
4.10.20.10 Standing Offer Forms
4.10.25 Request for Supply Arrangements
4.10.25.1 Supply Arrangement Procedures
4.10.25.5 International Trade Agreements and Use of Supply Arrangements
4.10.25.10 Ongoing Qualification Process
4.10.25.15 Agreement on Internal Trade, Canadian Free Trade Agreement and Use of Supply
Arrangements
4.10.30 Professional Services Sourcing Tools
4.15 Preparation of the Solicitation Documents
4.15.1 Departmental Standard Procurement Templates
4.15.5 Green Procurement Requirements
4.15.10 Methods of Responding to a Solicitation
4.15.15 Technical Data
4.20 Official Languages Obligations in Procurement
4.21 Integrity Provisions
4.21.1 Administrative Agreements
4.21.2 Public Interest Exception (PIE)
4.21.3 Contracting with Subcontractors
4.25 The Requirement
4.30 General Instructions for the Preparation of a Solicitation
4.30.1 Requirement and Statement of Work
4.30.10 Industrial security in contracts
4.30.15 Industrial Security in Solicitations
4.30.20 Industrial Security in Standing Offers and Supply Arrangements
4.30.25 Industrial Security and International Contracts
4.30.30 Foreign ownership, control or influence
4.30.35 Information on Comprehensive Land Claims Agreements
4.30.40 Information on the Procurement Strategy for Aboriginal Business
4.30.45 Standard Instructions, Clauses and Conditions
4.30.45.1 Equivalent Products
4.30.45.5 No Substitute Products
4.30.45.10 Multi-Item Bids/Offers
4.30.45.15 Bidders' Conferences and Site Visits
4.30.45.20 Intellectual Property

4.30.45.25 Former Public Servants
4.30.50 Taxes and Duties
4.30.55 Ontario Labour Legislation
4.30.60 Communications Notification
4.35 Evaluation Criteria
4.35.1 Mandatory Criteria
4.35.5 Rated Criteria
4.40 Evaluation Process and Method of Selection
4.45 Certifications and additional information
4.45.1 Code of Conduct (Certification)
4.50 Financial Security
4.50.1 Surety Bond Forms
4.50.5 Bid Financial Security
4.50.10 Contract Financial Security
4.60 Transportation Costs
4.65 Exchange Rate Fluctuation Risk Mitigation
4.70 Conditions of the Resulting Contract
4.70.5 General Conditions
4.70.5.1 Warranty
4.70.10 Supplemental General Conditions
4.70.15 Term of the Contract and Options
4.70.20 Basis of payment
4.70.20.1 Firm Price
4.70.20.5 Economic Price Adjustments in Firm Price Contracts
4.70.20.10 Fixed time rate
4.70.20.15 Cost reimbursable with incentive fee
4.70.20.20 Cost reimbursable with fixed fee
4.70.20.25 Cost reimbursable with fee based on actual costs
4.70.20.30 Cost reimbursable with no fee
4.70.20.35 Cost Reimbursable Contracts - Audit
4.70.20.40 Cost and Profit
4.70.20.45 Withholding of 15 percent on Service Contracts with Non-residents
4.70.20.50 Types of price adjustments
4.70.25 Contract Performance Incentives
4.70.30 Method of Payment
4.70.30.1 Standard Payment Period and Interest on Overdue Account
4.70.30.5 Determination of the Method of Payment
4.70.30.10 Types of Method of Payment

4.70.30.15 Progress Payments
4.70.30.20 Advance Payments
4.70.30.25 Holdbacks
4.70.35 Audit
4.70.35.1 Firm Price Contracts - Price Certification and Discretionary Audit
4.70.35.5 Cost Reimbursable Contracts - Certification and Audit
4.70.35.10 Fixed Time Rate Contracts - Time Verification
4.70.35.15 Audit of contract with a foreign contractor
4.70.40 Discretionary Audit Clauses
4.70.45 Time Verification Clauses
4.70.50 Invoicing Instructions
4.70.55 Payment instruments
4.70.55.5 Direct deposit
4.70.55.10 Payment by acquisition card
4.70.55.15 Electronic Data Interchange
4.70.55.20 Wire transfer
4.70.55.25 Large Value Transfer System
4.70.60 Certifications
4.70.65 Defence Contract and Defence Supplies
4.70.70 Services - Non-permanent Residents
4.70.75 Insurance
4.70.85 Controlled Goods
4.70.90 Limitation of Liability
4.70.95 Fair Wages
4.70.100 Transportation Costs Information
4.75 Issuance of the Solicitation
4.75.1 Client Department Review of Elements of a Solicitation
4.75.5 Determining the Solicitation Period
4.75.10 Public Advertisement
4.75.15 Notice of Proposed Procurement
4.75.15.1 Official Language Policy Applicable to a Notice of Proposed Procurement
4.75.15.5 Language Designation of Offices
4.75.20 Procedure for Posting of Notice of Proposed Procurement on Government Electronic Tendering
Service
4.75.25 Procedures for Posting Solicitation Documents on Government Electronic Tendering Service
4.75.30 Distribution of Material Not Electronically Available
4.75.35 Contacting Suppliers Directly During the Solicitation Period

4.75.40 Distribution of Solicitation Material to Invited Suppliers
4.75.45 Use of Source Lists
4.75.45.1 Solicitation by Direct Invitation
4.75.45.5 Requirements Subject to Trade Agreements
4.75.45.10 Requirements Not Subject to Trade Agreements
4.80 Solicitation Period
4.80.1 Communications during the Solicitation Period
4.80.5 Handling Questions during the Solicitation Period
4.80.10 Changes to the Solicitation
4.80.15 Assistance to Suppliers
4.85 Closing Procedures
4.85.1 Late Bids/Offers/Arrangements
4.85.5 Delayed Bids/Offers/Arrangements
4.85.10 Transmission by Facsimile
4.90 Receipt of Bids/Offers/Arrangements
4.90.1 Secure Handling of Bids/Offers/Arrangements
4.90.5 Public Opening
4.90.10 Receipt of Quotations
4.95 Modification and Withdrawal of Bids
4.100 Canceling and Reissuing a Solicitation
Annex 4.1: General Conditions and Supplemental General Conditions
Annex 4.2: Intellectual Property
Annex 4.3: Taxes and Duties
Annex 4.4: Supplies Exempt from Goods and Services Tax/Harmonized Sales Tax
Annex 4.5: Goods Subject to Excise Tax
Annex 4.6: Ontario Labour Legislation
Exhibit A 4.6.1: Proposed Letter - Requesting Information from Outgoing Contractor (with a clause)
Exhibit B 4.6.2: Proposed Letter - Requesting Information from Outgoing Contractor (no clause)
Annex 4.7: Insurance Clauses
Annex 4.8: Insurance of Government-owned or Leased Vehicles
Annex 4.9: Insurance of Government-owned or Leased Equipment
5 Chapter 5 - Evaluation and Selecting the Contractor
5.1 Overview if the evaluation and selection of contractors
5.5 Evaluation procedures
5.5.5 Certifications, declarations and proofs
5.10 Confidentiality of Bids
5.15 Verifying Compliance with Security Requirements
5.16 Integrity compliance
5.20 Use of Subject Matter Experts/Specialists

5.25 Use of Fairness Monitors
5.30 Clarifications
5.35 Evaluating the Bids
5.40 Technical Evaluation of Bids
5.40.1 Evaluation of Technical Mandatory Criteria
5.40.5 Evaluation of Technical Rated Criteria
5.45 Financial Evaluation of Bids
5.45.1 Formal Peer Review Process
5.45.2 Provincial Taxes
5.45.5 Foreign Taxes and Canadian Customs Duties
5.45.10 Transportation Costs
5.45.15 Bids in Foreign Currency
5.45.20 Exchange Rate Fluctuation
5.50 Selecting the Successful Bidder
5.55 Rejection of Bids/Offers/Arrangements
5.55.1 Role of the Contracting Officer
5.55.5 Authority to Reject a Bid/Offer/Arrangement
5.55.10 Notice to the Bidder/Offeror/Supplier
5.55.15 Review
5.60 Financial Capabilities of Contractor
5.60.1 Financial Capability
5.60.5 Bid Security (Financial)
5.60.10 Business Credit Services
5.60.15 Statement of Cost Accounting Practices
5.65 Identical Low Bids - Best Value
5.70 One responsive bid
5.75 No Responsive Bids
5.80 Bid Rigging/Collusion/Fraud
5.85 Negotiations
5.90 Extending the Bid Validity Period
5.95 Evaluating Joint Venture Bids
5.100 Special Program Considerations
5.105 Evaluation Report
5.110 Communications before Contract Award
5.110.1 Early Notification for Ship Construction and Refit
Annex 5.1: Federal Contractors Program for Employment Equity
Annex 5.2: Handling, Custody and Safekeeping of Financial Security/Handling of Bills of Exchange
6 Chapter 6 - Approvals and Authorities
6.1 Approvals and authorities - General information

6.5 Procurement Approval Documents
6.5.1 Procurement Plan
6.5.1.1 Procurement Plan for Procurements below Director General Level
6.5.1.5 Formal Procurement Plan for Complexity Levels 4 and 5
6.5.5 Contract Planning and Advance Approval
6.5.5.1 Contract Planning and Advance Approval Instructions
6.5.5.5 Contract Request or Contract Planning and Advance Approval (CPAA) Resubmission
6.5.5.10 Contract Summary
6.5.10 Contract Request
6.5.15 Treasury Board Submission
6.5.15.1 Procurements Requiring a Treasury Board Submission
6.5.15.2 Translation
6.5.15.5 Retroactive Approval of Contract
6.5.20 Contract Amendment
6.10 Additional Reviews
6.10.1 Contract Quality Control Review
6.10.5 Legal Services Review
6.10.10 Cost and price analysis services
6.10.15 Industrial Security
6.10.20 Client Department Review
6.20 Contract Approval and Signing Authorities
6.20.1 Delegated Authority to Incumbents
6.20.1.1 Responsibilities
6.20.1.5 Incumbent
6.20.1.10 Acting Incumbent
6.25 Special Approval Considerations
6.25.1 Go-Ahead Letters
6.25.5 Forgiveness of Debts
6.25.10 Waive of Interest
6.25.15 Per Diem Rates
6.25.20 Nil Value Amendment
6.25.25 Financial Evaluation of Bids/Offers/Arrangements
6.25.30 CORCAN
6.25.35 Stop Work Orders and Notices of Termination
6.25.45 Trade-ins
6.25.50 Treasury Board Exceptional Contracting Limits
6.25.55 Contracts for Legal Services
6.25.60 Standing Offer

6.30.1 Ratification by Treasury Board
6.30.5 Ratifications within Departmental Authorities
6.30.10 Confirming Orders and Contracts Involving Pre-contractual Work
Annex 6.1: Procurement Plan Instructions
Annex 6.2: Contract Request Instructions
Annex 6.3: Preparation of Contract Amendment Approval Documents
Annex 6.4: Conditions Imposed on the Approval Authority Limits for Public Works and Government Services
Canada Personnel
Annex 6.4.1: Approval Authorities and Additional Signing Authorities in Support of Clients' Programs
Only - Other than for Canadian Commercial Corporation
Annex 6.4.2: Contracting Limits including Exceptional Authorities
Annex 6.4.2.1: Contracting Limits for Basic and Standard Procurements
Annex 6.4.2.5: Contracting Limits for Complex Procurements
Annex 6.4.3: Exceptional Contracting Limits for Complex Procurements
Annex 6.4.4: Notes to Exceptional Contracting Limits for Complex Procurements
Annex 6.4.5: Table of Equivalent Positions
Annex 6.4.6: Contract Amendment Approval Instructions for Complexity Levels 1, 2 and 3
Annex 6.4.7: Complex Contract Amendment Approval Instructions
Annex 6.4.8: Amendment Approval Instructions for all Complexities
7 Chapter 7 - Award of Contracts and Issuance of Standing Offers and Supply Arrangements
7.1 Overview of contract award and issuance of standing offers and supply arrangements
7.5 Contract Award
7.10 Issuance of Supply Arrangements and Standing Offers
7.10.1 Standing Offers
7.10.5 Supply Arrangements
7.15 Legal Entity
7.20 Letter of Intent
7.25 Go-Ahead Letters
7.30 Procurement Reporting and Posting of Award Notices
7.30.1 Award notices on the Government Electronic Tendering Service
7.30.5 Procurement Activity Reporting to Treasury Board Secretariat
7.30.10 Contract History on Buyandsell.gc.ca
7.30.15 Comprehensive Land Claims Agreement Reporting
7.30.20 Procurement Strategy of Aboriginal Business Reporting
7.30.25 Trade Agreements Reporting
7.30.30 Use of the National Security Indicator
7.30.35 Reporting of Contract with Task Authorizations
7.30.40 Reporting of Emergency Requirements
7.35 Notification to Unsuccessful Bidders/Offerors/Suppliers

7.40 Debriefing and Feedback Session to Bidders/Offerors/Suppliers
7.45 Disclosure of Information
7.50 Bid and Contract Security
7.65 Proactive Disclosure
7.70 Coding Procedures
7.70.5 Public Works and Government Services Canada Reporting (Common Services)
7.70.10 Coding of Advance Contract Award Notice Results
7.70.15 Coding of Region of Delivery
7.70.20 Coding of Call-ups
7.70.25 Coding of Terminations and Conditional Amendments
7.70.30 Comprehensive Land Claims Agreement Coding
7.70.35 Contracts with Task Authorizations - Coding
Annex 7.1: Samples of Regret Letters
Appendix A 7.1.1: Regret Letter to Unsuccessful Bidders/Offerors/Suppliers - Responsive
Bid/Offer/Arrangement
Appendix B 7.1.2: Regret Letter to Unsuccessful Bidders/Offerors/Suppliers - Non-responsive
8 Chapter 8 - Contract Management
8.1 Overview of contract management
8.5 Contract Administration
8.10 Administration of Service Contracts
8.15 Contract Performance
8.20 Canada's Obligations
8.25 Contract Payments
8.30 Progress Payments
8.35 Claims for Progress Payment and Invoicing
8.40 Exchange Rate Fluctuation Provision
8.45 Interest
8.50 Overtime
8.55 Claims for Extra Payment
8.60 Services of Non-residents - Entry Requirements
8.65 Assignment of Monies
8.65.1 Receipt and Deposit of Monies
8.65.5 Release of Contract Financial Security
8.65.10 Financial Claims by Canada
8.65.15 Financial Security Issues related to Amendments
8.70 Contract Administration Considerations

8.70.1.1 Compliance and Enforcement with Industrial Security Requirements
8.70.2 Compliance with the Integrity Provisions
8.70.5 Amending Contracts
8.70.10 Approval of Contract Amendments
8.70.15 Exercising Options
8.70.20 Administration of Contracts with Task Authorizations
8.70.25 Design Change or Deviation
8.70.25.1 Design Change or Deviation Procedure
8.70.30 Loans of Department of National Defence Materiel
8.70.35 Return of Special Test Equipment and Special Production Tooling
8.75 Administration of Standing Offers and Supply Arrangements
8.75.1 Reporting for Standing Offers and Supply Arrangements
8.75.5 Revisions to Standing Offers
8.75.10 Managing Proportional Basis of Selection
8.80 Employer-employee Relationship
8.85 Subcontracting
8.90 Assignment of contracts
8.95 Financial Security and Contractor Difficulties
8.100 Bonding Companies
8.105 Protecting Canada's goods
8.110 Registering Notice of Interest in Goods
8.120 Bankruptcy, Receivership, Insolvency
8.125 Goods or Services not in accordance with the Contract
8.130 Timely Performance
8.135 Terminations
8.135.1 Suspension of the Work - Stop Work Order
8.135.5 Termination for Convenience of Canada
8.135.10 Involvement of the Termination Claims Officer
8.135.15 Termination for Default
8.135.20 Termination by Mutual Consent
8.135.25 Request for Termination by the Contractor
8.135.30 Financial Security Issues Related to Terminations
8.135.35 Involvement of Legal Services in Cases of Termination
8.135.40 Adjustment to Source Lists
8.135.45 Public Works and Government Services Canada Offices Outside Canada
8.135.50 Approval Authority
8.140 Disputes
8.140.1 Contract dispute resolution

8.145 Contract Settlement Board
8.145.1 Contract Settlement Board - Procedures
8.145.5 Contract Settlement Board - Meetings
8.145.10 Contract Settlement Board - Settlement Offer
8.145.15 Contract Settlement Board - Non-acceptance of Settlement
8.150 Contract Dispute Advisory Board
8.150.1 Contract Dispute Advisory Board - Procedures
8.150.5 Contract Dispute Advisory Board - Non-acceptance of Settlement
8.155 Final Payments
8.155.1 Refunds of Excess Profits
8.160 Cost Submissions Standards for Cost Reimbursable Contracts
8.165 Cost Audit
8.175 Contract End and Contract Close Out
8.180 Vendor Performance Corrective Measure Policy
8.180.1 Vendor Performance Corrective Measure Policy - Introduction
8.180.5 Principles
8.180.10 Definitions
8.180.15 Generic Process
8.180.15.1 Contract administration concerning the Vendor Performance Corrective Measure Policy
8.180.15.5 Vendor Performance Corrective Measure Assessment
8.180.15.10 Notice of intent for applying a Vendor Performance Corrective Measure
8.180.15.15 Assistant Deputy Minister decision
8.180.15.20 Actions pursuant to a decision to apply a Vendor Performance Corrective Measure
8.180.20 Standard Acquisition Clauses and Conditions Manual Provisions for Stop Work Orders, Contract
Suspensions and Other Reasons for Bid Rejection
8.180.25 Exceptions
8.180.30 Sector/Region Vendor Performance Programs
8.1651 Differences of Opinion or Interpretation
Annex 8.1: Guidelines on Procurement File Organization and Make-up
Annex 8.2: Contract Management Early Warning Indicators
Annex 8.3: Termination for Convenience Process
Annex 8.4: Termination for Default
Annex 8.5: Refunds of Excess Profits Earned on Public Works and Government Services Canada Contracts
Annex 8.6: Risk Management approach to Vendor Performance Process Chart
Annex 8.6.1: Required procedure for applying a Vendor Performance Corrective Measure (VPCM)
Annex 8.7: Principal elements of the Vendor Performance Corrective Measure Assessment
Annex 8.8: Letter Template Where No Vendor Performance Corrective Measure Will Be Applied At This
Time
Annex 8.9: Letter Template for Notice of Intent to Apply a Vendor Performance Corrective Measure
Annex 8.10: Letter Template for Decision to Apply Conditions as a Vendor Performance Corrective Measure
Annex 8.11: Letter Template for Decision to Apply Debarment as a Vendor Performance Corrective Measure
Annex 8.12: Framework for Developing a Sector/Region Vendor Performance Program
Annex 8.13: Letter Templates for Integrity
9 Chapter 9 - Special Procurements
9.1 Special procurements - Introduction
9.5 Major Crown Projects
9.5.1 Major Crown Projects - General information
9.5.5 Responsibilities of Public Works and Government Services Canada in Major Crown Projects
9.5.10 Early Involvement
9.5.15 Memorandum of Understanding with Client Department
9.5.20 Senior Project Advisory Committee
9.5.20.1 Procurement Strategy Development
9.5.20.5 Senior Project Advisory Committee
9.5.20.10 Membership of the Senior Project Advisory Committee
9.10 Real Property Contracting
9.10.1 Real Property Contracting Procedures
9.10.5 SELECT
9.10.5.1 Use of SELECT for Requirements Subject to Comprehensive Land Claims Agreements
(CLCAs)
9.10.10 Architectural and engineering services
9.10.15 Construction Services
9.10.20 Elevator maintenance services
9.15 United States Foreign Military Sales
9.15.1 Foreign Military Sales planning
9.15.5 Contracting Protocol
9.15.10 Time Frames
9.15.15 Pricing and Payment
9.15.20 Surcharges
9.15.25 Non-recurring Costs
9.15.30 Release of Information
9.15.35 Processing of Documents
9.15.40 Contract Administration
9.15.45 Contract Amendments
9.15.50 Contract Closing
9.20 Co-Operative Logistics and Blanket Order Cases with the United States Department of Defense
9.20.1 Requisition Receipt
9.20.5 Planning
9.20.10 Establishment and Renewal of a Stock Level Case (FMSO I)

9.20.15 Establishment of a Requisitioning Case (FMSO II)
9.20.20 Referral Program
9.20.25 COLOG Termination
9.25 Use of the Defence Production Revolving Fund and Loan Account
9.25.1 Program Description
9.30 Purchases from CORCAN
9.30.5 Memorandum of Understanding
9.30.10 Implementation
9.35 Comprehensive Land Claims Agreements (CLCAs)
9.35.1 General information on Comprehensive Land Claims Agreements
9.35.5 Comprehensive Land Claims Agreements in Effect
9.35.5.1 Quebec
9.35.5.5 Yukon, Northwest Territories, and Nunavut
9.35.5.10 British Columbia
9.35.5.15 Newfoundland and Labrador
9.35.10 National Park Agreements and Department of National Defence Co-operation Agreements
9.35.15 Comprehensive Land Claims Agreements under Negotiation
9.35.20 Applicability of Comprehensive Land Claims Agreement Contracting Obligations
9.35.25 Requirements Definition
9.35.30 Access to Aboriginal-owned Lands
9.35.35 Notification of Procurement
9.35.40 Right of First Refusal
9.35.45 Evaluation Criteria
9.35.50 Methods of Solicitation
9.35.55 Solicitation Period
9.35.60 Business Directories/Lists
9.35.65 Comprehensive Land Claims Agreements and Procurement Strategy for Aboriginal Business
9.35.70 International Trade Agreements
9.35.75 Canadian Free Trade Agreement and Agreement on Internal Trade
9.35.80 Notices on the Government Electronic Tendering Services
9.35.85 Solicitations
9.35.90 Standing Offers, Supply Arrangements and As-and-When-Requested Contracts
9.35.91 SELECT
9.35.95 Procurement Reporting for Comprehensive Land Claims Agreements
9.40.1 Decision to Set Aside a Procurement under the Procurement Strategy for Aboriginal Business
9.40.2 Obtaining Advice on the Procurement Strategy for Aboriginal Business

9.40.5 Procurement Strategy for Aboriginal Business and Comprehensive Land Claims Agreements
9.40.10 Procurement Strategy for Aboriginal Business and Trade Agreements
9.40.15 Procurement Strategy for Aboriginal Business and Canadian Content
9.40.20 Subcontracting Plans
9.40.25 Sound Contracting Principles
9.40.30 Notification to Aboriginal Affairs and Northern Development Canada
9.40.35 Sourcing of Requirements under Procurement Strategy for Aboriginal Business (PSAB) Set-asides
9.40.40 Legal status of Aboriginal business
9.40.45 Certification by Suppliers
9.40.50 Audits of the Bidder/Offeror/Supplier Certification
9.40.55 Bid Challenge
9.40.60 Procurement Reporting for Procurement Strategy for Aboriginal Business
9.45 Industrial and Regional Benefits Program
9.50 Communication Procurement
9.55.1 General Information on Canadian Commercial Corporation Contracts
9.55.5 Subcontracting
9.55.15 Certification and Signing Authorities
9.56 Price certifications and audits of foreign contractors
9.60 Public–Private Partnership (P3) procurements
9.60.5 Public–Private Partnerships delivery models
9.60.10 Federal roles and responsibilities in Public–Private Partnerships
9.60.15 Public–Private Partnership screening
9.60.20 Value for money
9.60.25 Stages in Public–Private Partnership procurement process
9.60.30 Public–Private Partnership procurements - Key differences
9.60.35 Public–Private Partnership Treasury Board approvals
9.60.40 Public–Private Partnership project team
9.60.45 Payments in Public–Private Partnerships
Annex 9.1: Memorandum of Understanding Between Public Works and Government Services Canada and
CORCAN
Annex 9.2: Notification of Procurement to Comprehensive Land Claims Agreement Claimant Groups
Annex 9.3: Comprehensive Land Claims Agreements Evaluation Criteria
Annex 9.4: Requirements for the Set-aside Program for Aboriginal Business
Annex 9.5: Procurement Strategy for Aboriginal Business Set-aside Checklist
Annex 9.6: Memorandum of Understanding - Canadian Commercial Corporation / Public Works and
Government Services Canada
Annex A to Memorandum of Understanding 9.6.1: Responsibility Matrix

Annex B to Memorandum of Understanding 9.6.2: Canada-United States Defence Production Sharing
Agreements
Annex C to Memorandum of Understanding 9.6.3: Canada-United States Defence Development Sharing
Agreement
10 Chapter 10 - Cost and Profit
10.1 Cost and profit - General information
10.5 Establishing Costs
10.10 Travel and Living Expenses
10.15 Prices for out of plant services of individuals
10.20 Surplus Materials in Cost Reimbursable Contracts
10.25 Costing of Lease Transactions
10.30 Service Contracts
10.35 Joint Ventures
10.40 Research and Development Contracts with Universities and Colleges
10.45 Non-competitive Contracts with Non-profit Organizations, excluding Universities and Colleges
10.50 Non-competitive Acquisitions of Manufactured Products and Repair and Overhaul Services, from
Agency and Resale Outlets
10.50.1 Non-competitive Requirements of Commercial Goods and/or Services
10.50.5 Non-competitive Requirements of Non-commercial Goods and/or Services
10.50.10 Agency and Resale Outlets - Additional Requirements
10.50.15 Price Analysis
10.55 Transfer Pricing
10.60 Special Production Tooling and Special Test Equipment
10.65 Calculation of profit on negotiated contracts
10.65.1 Return on Capital Employed
10.65.5 Return on Fixed Capital Employed (between $50,000 and $249,999)
10.65.10 Return on Working Capital Employed (between $50,000 and $249,999)
10.65.15 Return on Fixed Capital Employed ($250,000 or more)
10.65.20 Return on Working Capital Employed ($250,000 or more)
10.65.25 General Business Risk
10.65.30 Contractual Risk
10.65.35 Total Profit
10.70 Recovery and Settlement of Contract Claims
10.75 Interim pricing measure
Annex 10.1: Determination of Fixed Capital Employed Applicable to a Contract
Annex 10.1.1: Examples to Determine the Fixed Capital Employed
Annex 10.2: Examples to Determine the Working Capital Employed
Annex 10.3: Examples of Profit Calculations
Annex 10.4: Reasons for the non-applicability of certain costs when utilizing Contract Cost Principles 1031-2
Annex 10.5: Cost Interpretation Bulletins 01 to 19
Annex 10.5.1: Cost Interpretation Bulletin - Number 01 Excess Facilities
Annex 10.5.2: Cost Interpretation Bulletin - Number 02 Depreciation
Annex 10.5.3: Cost Interpretation Bulletin - Number 03 Lease Costs
Annex 10.5.4: Cost Interpretation Bulletin - Number 04 Travel Costs
Annex 10.5.5: Cost Interpretation Bulletin - Number 05 Head Office Expense
Annex 10.5.6: Cost Interpretation Bulletin - Number 06 Pension Costs
Annex 10.5.7: Cost Interpretation Bulletin - Number 07 Research and Development Expenses
Annex 10.5.8: Cost Interpretation Bulletin - Number 08 Bid and Proposal Expenses
Annex 10.5.9: Cost Interpretation Bulletin - Number 09 Selling and Marketing Expenses
Annex 10.5.10: Cost Interpretation Bulletin - Number 10 Severance Payments
Annex 10.5.11: Cost Interpretation Bulletin - Number 11 Pension Plan Refunds
Annex 10.5.12: Cost Interpretation Bulletin - Number 12 Company Funded Costs
Annex 10.5.13: Cost Interpretation Bulletin - Number 13 Executive Compensation
Annex 10.5.14: Cost Interpretation Bulletin - Number 14 Mobile Repair Party Requirements
Annex 10.5.15: Cost Interpretation Bulletin - Number 15 Environmental Costs
Annex 10.5.16: Cost Interpretation Bulletin - Number 16 Take-out Rates
Annex 10.5.17: Cost Interpretation Bulletin - Number 17 Government Supplied Materiel
Annex 10.5.18: Cost Interpretation Bulletin - Number 18 Incentive Remuneration Profit Sharing Plans
Annex 10.5.19: Cost Interpretation Bulletin - Number 19 Purchased Labour -- Personnel Procured From
Outside Sources
Annex 10.6: Cost Notifications 01 to 02
Annex 10.6.1: Cost Notification 01 - Technology Partnership Canada Royalty Amount for Cost Rate
Negotiations
Annex 10.6.2: Cost Notification 02 - Goodwill
1 Supply Manual Glossary
1 Chapter 1 - Public Procurement

(2012-01-18)
1.1 Overview or public procurement

(2015-09-24)
a. The mandate of Public Works and Government Services Canada (PWGSC) is to provide services to all
Canadian federal departments, and is summarized in section 5 of the Department of Public Works and
Government Services Act. This section stipulates that:
"The Department shall operate as a common service agency for the Government of Canada, and its
activities as a common service agency shall be directed mainly toward providing the departments,
boards and agencies of the Government of Canada with services in support of their programs."
b. The role of PWGSC as a common service provider of both mandatory and optional acquisition services
is further elaborated in the Treasury Board (TB) Common Services Policy (http://www.tbs-sct.gc.ca/pol/doc-
eng.aspx?id=12025) .
c. Public procurement by Canada is legislated and guided by a number of international and national trade
agreements, and acts, as well as policies, directives, and guidelines provided by TB, the Treasury Board
Secretariat (TBS) and PWGSC. Certain departments such as Indian and Northern Affairs Canada and
Industry Canada are responsible for programs that have a direct impact on procurement. In addition to
the above, and the content in this Supply Manual, contracting officers must also be cognisant of policy
notifications, relevant communiqués and internal operating procedures.
1.5 About the Supply Manual

(2014-03-13)
a. The Supply Manual with its policies and procedures is written for the use of contracting officers from
PWGSC Acquisitions Branch and regional acquisitions offices to assist them in providing procurement
services as a common service provider. Contracting officers from PWGSC Acquisitions Branch and
regional acquisitions offices may contact the Acquisitions Program Policy Directorate (APPD) for
guidance by email at DPPApublications.APPDpublications@tpsgc-pwgsc.gc.ca. Whenever the term
"contracting officer" is used throughout this manual, it refers to contracting officers within Acquisitions
Branch and the regional acquisitions offices of PWGSC.
b. PWGSC staff undertaking internal contracting activities, and not providing services in PWGSC's role as
a common service provider for procurement under the TB Common Services Policy (http://www.tbs-
sct.gc.ca/pol/doc-eng.aspx?id=12025) , should refer to PWGSC internal procurement policies such as the
PWGSC Departmental Policy (DP) 099 Policy on Procurement and procedures such as the Contract
Management Guide, or refer to the TB policies and directives on procurement. The Supply Manual may
be used as a reference source for such internal procurements, however, it does not supersede the
information contained in the above noted policies, guides, and directives.
c. Other government departments and agencies are encouraged to use this Supply Manual as reference
material for general procurement knowledge. However, for guidance on their own procurement
practices, they should refer to their own organizations' policy and guidance procedures as well as
Treasury Board contracting policies and directives. Other government departments and agencies should
seek advice from their own internal policy group as some Supply Manual policies and procedures are
applicable only to PWGSC Acquisitions Branch and the regional acquisitions offices.
d. The Supply Manual describes the acquisitions-related activities of PWGSC's Acquisitions Branch and
regional acquisitions offices. It references laws, regulations, government and departmental policies,
directives, and procedures that have an impact on the contracting and procurement activities of the
Acquisitions Branch and the regional acquisitions offices.
e. Contracting officers should be aware that this manual and the contracting policies referenced may be
read by and referred to by a number of parties interested in procurement activities such as clients,
suppliers, the general public, and the media.
f. Canadian government procurement is carried out in a decentralized manner. Individual departments

award contracts under their own authorities for services, and under certain authorities for goods and
construction as delegated by the Minister of PWGSC. They make a considerable number of lower dollar
value purchases through the use of these authorities and make purchases of varying values through their
authorized use of procurement instruments put in place by PWGSC.
g. The Supply Manual is to be read in conjunction with other government policies and directives, in
particular those released by TB and TBS. Acquisition policies are regularly updated by Policy
Notifications as well as by TB Contracting Policy Notices. The Standard Acquisition Clauses and
Conditions Manual must be read as a complementary document to the Supply Manual.
1.5.1 Organization of the Manual

(2011-06-29)
The Manual generally follows the sequence of a typical procurement process. The structure is as follows:
a. Chapter 1, Public Procurement, provides an overview of the context and the legal framework relating to
public procurement for the acquisition of goods or services, including construction.
b. Chapter 2, Defining the Requirement and Requisition Receipt, is about defining the requirement for the
bid solicitation. While this is often the responsibility of the client department, PWGSC involvement is
still important.
c. Chapter 3, Procurement Strategy, describes what the procurement strategy is. This determines how the
request will be satisfied.
d. Chapter 4, Solicitation Process, outlines the actual bid solicitation preparation and process. Most of the
various methods of solicitation and items that need to be included in the bid solicitation are found in this
chapter.
e. Chapter 5, Evaluation and Selecting the Contractor, explains how to evaluate and select the contractor
based on the solicitations.
f. Chapter 6, Approvals and Authorities, provides the details of the approvals that need to be obtained
before awarding a contract.
g. Chapter 7, Award of Contracts and Issuance of Standing Offers and Supply Arrangements, relates to the
award of contracts, issuance of standing offers and supply arrangements, debriefings, notification to
unsuccessful bidders, and other matters surrounding contract award and the issuance of standing offers
and supply arrangements.
h. Chapter 8, Contract Management, offers information regarding contract management during the
contract. Non-exhaustive examples of this information are contract performance, progress payments,
subcontracting, warranty work, disputes, terminations and the Vendor Performance Corrective Measure
Policy.
i. Chapter 9, Special Procurements, details procurements where PWGSC has implemented special
procedures applicable to identified commodities, clients or projects.
j. Chapter 10, Cost and Profit, is generally used when a contract is to be awarded on a non-competitive
basis for non-commercial goods or services, or in the case of a competitive process for such goods or
services, only one compliant bid is received, so price negotiations with this bidder may be required.
k. The Glossary includes words, concepts, titles, etc., used throughout the Manual.
1.5.5 Supply Manual Format

(2010-01-11)
a. Each chapter refers to particular subjects by heading, and subsequent sub-heading numbers. Each
chapter also commences with a Table of Contents and concludes with annexes specific to that chapter.
b. Subjects are numbered as they appear in the chapters, i.e. 1.5.5 appears in Chapter 1 and 8.65.5 Release
of Contract Financial Security appears in Chapter 8.
c. Section and subsection numbering includes gaps to provide for future additions to the Supply Manual.
1.10 PWGSC Procurement Process

(2010-01-11)
There is one over-arching principle for all PWGSC procurement activities: Integrity. Subordinate to this are
guiding principles, which provide the framework for PWGSC procurement process. Contracting officers must
always respect these principles, regardless of whether or not the actions are clearly set out in this manual.
1.10.1 Integrity
(2010-01-11)
PWGSC procurement processes will be open, fair and honest.
1.10.5 Guiding Principles

(2010-01-11)
All those involved in the procurement process must apply prudence, probity and transparency at each stage of
the process.
a. Client Service
PWGSC will make every reasonable effort to satisfy the operational requirements of its clients, while
obtaining the best value in each procurement process.
b. National Objectives
PWGSC procurement activities will advance established government policies, within the limits imposed
by international trade obligations.
c. Competition
PWGSC procurement will be competitive, with specific exceptions.
d. Equal Treatment
PWGSC will ensure that all potential bidders of a particular requirement are subject to the same
conditions.
e. Accountability
PWGSC is accountable for the integrity of the contracting process. Clients are responsible for ensuring
that all information relating to their requirements, which is provided to PWGSC, is complete and
accurate. (See Annex 1.1: Matrix of Responsibilities between PWGSC and Client Departments for the
Procurement of Goods and Services (Generic).)
1.10.10 Procurement best practices

(2017-11-28)
a. Ensure Integrity
Contracting officers must ensure the integrity of the procurement process. If there is any doubt that what
is being done (or asked by the client to be done) might bring the integrity of the process into question,
the contracting officer should consider suspending the procurement process until the issue is resolved.
Issues that cannot be resolved satisfactorily at the contracting officer level must be referred to a higher
authority within PWGSC.
b. Get Involved Early

The procurement process can be facilitated by advance work being done with clients. This includes
helping with needs identification and requirement definition, procurement strategy development, and
drafting of solicitation documents before a requisition is actually received. This can be accomplished
through ongoing liaison with the client or a review of procurement patterns. These methods can be
initiated by a client request for assistance, or by a more formal process of regular consultation.
c. Consult with Peers

Contracting officers should consult with colleagues, particularly when working with an unfamiliar
situation, such as a new commodity. Their experience and advice may help to arrive at a sound decision.
Referring to previous files can also be instructive, particularly for estimating things like business
volume under a new contract where there is a current contract covering substantially the same activities.
d. Liaise with the Client

The contracting officer should keep clients informed and involved, and in order to develop responsive,
creative and flexible procurement strategies, their departmental needs must be understood, as well as
their specific technical requirement. When consulting the client, make the purpose plain, so that if there
is a problem with a proposed approach a solution that achieves the purpose can be developed. The
contracting officer must work with the client towards their operational objectives.
e. Use Specialists
The contracting officer should seek advice from the following specialists: Legal Services, policy
advisors, Access to Information and Privacy officers, quality control officers, cost analysts and risk
management advisors. Specialists are available to provide guidance and recommendations in their areas
of expertise. The mandatory or discretionary use of cost and price analysis specialists is detailed in the
Acquisitions Program Policy Suite (http://www.gcpedia.gc.ca/wiki/Acquisitions_Program_Policy_Suite) .
f. Communicate Effectively
Contracting officers should be very clear in communications. Written instructions accompanying each
bid solicitation, for example, should be clear with no ambiguity, and be easily understood by all parties.
g. Maintain Confidentiality
The contracting officer must treat all information of a confidential or personal nature, including bid
information, in a secure and confidential manner. This ensures the integrity of the contracting process,
and protects the interests of suppliers and clients.
h. Obtain Confirmation
The contracting officer should obtain written confirmation of significant information, agreements and
discussions, such as confirmation of an unusually low price, or extension of a bid validity period by the
bidder.
i. Select the Appropriate Contracting Method
i. Depending on which commodity is being procured, the appropriate contracting method may be a
standing offer, a supply arrangement, a government-wide or multi-departmental contract, or a
normal contract. See 3.15 Non-competitive Contracting Process for details on the usage of the
different methods.
ii. Some commodities are available via mandatory standing offers, and these must be used unless
there is a valid reason to deviate.
j. Commodity Knowledge
Contracting officers should develop their understanding of their commodity's industry, the market
conditions, and the pertinent factors of each commodity, which then affects the choices made by
contracting officers in determining, for example, such things as the basis of payment and the selection
methodology. Clients should also use their understanding of the commodity when defining their
technical requirements and scope.
Contracting officers should also keep themselves informed about such things as the proposed
contractor's performance history, financial situation and practices, before recommending a contract
award. It also means keeping up to date with a contractor during the performance of a contract.
k. Life Cycle Management of Assets

Life Cycle Management of Assets (LCMA) is an integrated approach to materiel management that looks
at the process as a complete system rather than separate activities. While this process is primarily the
responsibility of materiel managers within client departments, procurement and disposal are a part of
this process so contracting officers should discuss with the client the implications of the life cycle
management process for each procurement.
l. Maintain Records
Contracting officers should keep files up to date for reasons of good management, access to information
requests as well as for audit purposes. Current files should be kept up to date for anyone who may have
to consult the file or assume responsibility for it at a later date. See Annex 8.1: Guidelines on File
Organization and Make-up for further details.
m. Use Standard Documents

For every solicitation process (with the exception of construction and architecture and engineering
services), whether for competitive or non-competitive requirements, contracting officers must only use
the departmental standard procurement templates and the clauses of the Standard Acquisition Clauses
and Conditions (SACC) Manual. Contracting officers should obtain from their supervisor the most
current standard documents that have been developed in accordance with these templates within their
respective areas. Directorates requiring assistance in developing documents based on these templates
should contact the Procurement Policy and Tools Division of the Policy, Risk, Integrity and Strategic
Management Sector by e-mail at outilsapprov.proctools@tpsgc-pwgsc.gc.ca. For more information, see
section 4.15.1 Departmental Standard Procurement Templates.
1.15 The Legal Framework of Contracting

(2010-01-11)
The legal framework is comprised of:
a. statutes and regulations;
b. agreements;
c. policies, directives, procedures and guidelines; and,
d. challenge process.
See sections 1.20 Statutes and Regulations to 1.35 Challenge Process for a description.
1.20 Statutes and Regulations

(2010-01-11)
a. PWGSC procurement activities are principally carried out pursuant to the following major statutes:
i. Department of Public Works and Government Services Act;

ii. Financial Administration Act and the Government Contracts Regulations;
iii. Defence Production Act;
iv. Federal Accountability Act;
v. Government Contracts Regulations.
b. No legal interpretation should be attempted on the basis of the following sections which summarize the
acts. An electronic copy of the acts may be viewed on the Department of Justice Web site.
1.20.1 Department of Public Works and Government Services Act

(2010-01-11)
a. The Department of Public Works and Government Services Act came into force on July 12, 1996, to
give legislative sanction to the amalgamation of the former department of Public Works and the former
Department of Supply and Services together with the Translation Bureau and the Telecommunication
Services for government. The legal name of the Department is "Department of Public Works and
Government Services"; while "Public Works and Government Services Canada" or " PWGSC" is the
common usage name. The legal name of the Department must be used for the preparation and execution
of legal documents.
b. The Act:
i. constitutes the Department;
ii. provides for the appointment of a minister who has the management and direction of the
Department;
iii. provides for the appointment of a deputy minister as deputy head of the Department;
iv. provides that the Minister is the Receiver General for Canada and the Deputy Minister is the
Deputy Receiver General;
v. sets out the powers, duties and functions of the Minister which extends to and includes all matters
over which Parliament has jurisdiction, not by law assigned to any other department, board or
agency of the Government of Canada.
c. Sections 6 and 7 outline in detail the powers, duties and functions of the Minister. With respect to
acquisitions, the following services are specifically identified in Section 6:
i. acquisition and provision of articles, supplies, machinery, equipment and other materiel for
departments;
ii. acquisition and provision of services for departments;
iii. planning and organizing of the provision of materiel and services required by departments;
iv. acquisition and provision of printing and publishing services for departments; and
v. construction, maintenance and repair of public works, federal real property and federal
immovable.
d. Section 8 allows the Minister to delegate any of the Minister's powers, duties or functions under the Act
to an appropriate minister, within the meaning of the Financial Administration Act, for any period and
under any terms and conditions that the Minister considers suitable. Section 8 also provides the Minister
of PWGSC with the power to authorize other Ministers, to whom he or she has delegated powers under
the Act, to sub delegate those powers to the "chief executive" of the relevant department. Subsection
8(3) empowers a minister receiving the authority to sub-delegate to the officials who are in charge of the
departments in that minister's portfolio and subsection 8(4) empowers those officials in turn, to sub-
delegate to departmental officials under their jurisdiction.
e. Section 9 gives the Minister the exclusive authority for the acquisition of goods. All ministers have
inherent power to contract; however, the authority given to the Minister in section 9 supplants the
authority of each department to contract for goods. That authority may be restored to the extent
determined by the Minister of PWGSC through a delegation, in accordance with section 8, from the
Minister of PWGSC to the Minister responsible. Departments may enter into contracts for services
under their own authorities, up to the limits contained in Appendix C - Treasury Board Contracts
Directive (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text#appC) ; however, they may still choose
to have these contracts for services done by PWGSC.
f. Section 16 empowers the "Minister to do anything for or on behalf of:
i. any department, board or agency of the Government of Canada or Crown Corporation, or
ii. with the approval of the Governor in Council, any government, body or person in Canada or
elsewhere that requests the Minister to do that thing, where the Minister is authorized to do that
thing under this or any other Act of Parliament for or on behalf of any department, board or
agency of the Government of Canada."
g. Sections 20 and 21 provide the necessary contracting powers of the Minister, including the power to fix
terms and conditions of contracts, and instructions, terms and conditions with respect to other
documents relating to contracts and their formation. Section 22 gives the Minister the power to
incorporate contractual clauses by reference.
1.20.5 Financial Administration Act and the Government Contracts Regulations

(2010-01-11)
a. The Financial Administration Act provides the legal framework for the collection and expenditure of
public funds, including the contracting practices of PWGSC and its clients. Sections 32, 33, 34, 37, 40
and 41 are of direct interest to contracting officers.
b. Section 32 provides that no contract providing for a payment can be entered into unless there is
sufficient funding available to discharge any debt that under the contract will be incurred during the
fiscal year in which the contract is entered into. Section 33 requires that no charge can be made against
an appropriation except on the requisition of the appropriate Minister of the department for which the
appropriation was made or of a person authorized in writing by that Minister.
c. Pursuant to section 34, no payment can be made unless the deputy of the appropriate Minister, or
another person authorized by the Minister certifies, in the case of a payment for the performance of
work, the supply of goods or the rendering of services, that the work has been performed, the goods
supplied or the service rendered and that the price charged is in accordance with the contract, or if not
specified in the contract, is reasonable. Under 1.20(a) (ii), payment may be made before completion of
the work (i.e. advance or progress payment) but only if such payment is in accordance with the contract.
d. Sections 37 and 37.1 provide that any unexpended portion of an appropriation lapses at the end of the
fiscal year, except that a debt incurred for work performed, goods received or services rendered before
the end of the fiscal year must be recorded as an expenditure against the appropriation, even though
payment is made during the following fiscal year.
e. Section 40 provides that it is a term of every contract providing for the payment of any money by Her
Majesty under that contract is subject to there being an appropriation for the particular service for the
fiscal year in which any commitment under that contract would come in course of payment.
f. Section 41 provides for regulations with respect to the conditions under which contracts may be entered
into.
g. Sections 61 and 62 restrict the transfer, lease or loan of public property and require each department to
maintain adequate records of its public property. However, pursuant to the Public Property Loan
Regulations, (SOR/92-745), section 61 permits ministers to loan public property, subject to certain
conditions.
h. Sections 66 to 71 describe conditions under which Crown debts may be assigned, and the procedure to
follow.
i. Contracting officers should be familiar with the Government Contracts Regulations (GCR). Part I of the
GCRs deals with conditions of contract entry. Section 4 provides that contracts for legal services are
only entered into by the Minister of Justice. Section 5 sets out the requirement for soliciting bids and
section 6 specifies conditions under which bids need not be solicited. Section 8 and 9 authorize advance
payments and progress payments. Part II deals with bid and contract security.
1.20.10 Defence Production Act

(2010-01-11)
a. The Defence Production Act (DPA) gives the Minister of PWGSC the responsibility to administer the
DPA and the exclusive authority to buy or otherwise acquire defence supplies and construct defence
projects required by the Department of National Defence, subject to exceptions listed at subsection
10(2) of the DPA. All PWGSC contracts for defence supplies or projects are governed by the provisions
of the DPA.
b. The DPA includes the following three parts: (1) Procurement of Defence Supplies; (2) Regulations of
Access to Controlled Goods; and (3) Offence and Punishment.
c. In Part 1, section 11 permits the Minister, if authorized by the Governor in Council, to do or undertake,
on behalf of an associated government, any act or thing that the Minister is empowered to do or
undertake under the Act. Sections 12 to 15 deal with the Minister's mandate to organize and control the
Canadian defence industry. Section 16 provides wide powers to the Minister with respect to the
procurement, production or disposal of defence supplies or defence projects. Sections 21 to 25 deal with
the administration of defence contracts.
d. Part 2 deals with the regulation of access to controlled goods, including requirements for registration,
offences and prohibitions. Part 3 defines offences, continuing offence and factors to consider when
sentencing.
1.20.15 Federal Accountability Act

(2010-08-16)
a. The Federal Accountability Act (FedAA) was granted Royal Assent on December 12, 2006. The Act
provides for conflict of interest rules, measures respecting administrative transparency, oversight and
accountability. The Act enacts two new acts (the Conflict of Interest Act and the Director of Public
Prosecutions Act) and makes a series of amendments to existing legislation such as the Parliament of
Canada Act, the Lobbying Act, the Financial Administration Act, the Criminal Code and the
Department of Public Works and Government Services Act.
b. The FedAA also amends the Department of Public Works and Government Services Act to provide for
the appointment and mandate of a Procurement Ombudsman. See 1.35.5 Procurement Ombudsman for
more details.
1.20.20 Other Acts

(2010-01-11)
In addition to the above statutes, examples of other acts which also apply to contracting for goods and services
are as follows:
a. Conflict of Interest Act;
b. Access to Information Act;
c. Privacy Act;
d. Official Languages Act;
e. Lobbying Act;
f. Criminal Code;
g. Competition Act;
h. Department of Justice Act;
i. Bankruptcy and Insolvency Act.
1.25 Agreements
(2010-01-11)
1.25.1 International and National Trade Agreements

(2017-09-21)
a. Canada is a party to several international trade agreements (ITAs) which include obligations aimed at
reducing trade barriers between the parties in the area of government procurement:
North American Free Trade Agreement (NAFTA);
Canada - European Union Comprehensive Economic and Trade Agreement (CETA)
(http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-
texte/toc-tdm.aspx?lang=eng) ;
World Trade Organization Agreement on Government Procurement (WTO-AGP)

(http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm) ;
Canada - Chile Free Trade Agreement (CCFTA);

Canada - Colombia Free Trade Agreement;
Canada - Honduras Free Trade Agreement;
Canada - Korea Free Trade Agreement;
Canada - Panama Free Trade Agreement; and
Canada - Peru Free Trade Agreement (CPFTA).
As well, Canada is a party to the Canadian Free Trade Agreement (CFTA) with the provinces and
territories. The CFTA replaced the Agreement on Internal Trade (AIT) on July 1, 2017; however, the
AIT continues to apply to procurements commenced before that date.
b. The Canadian International Trade Tribunal is the mechanism by which Canada enforces the
implementation of the procurement obligations in these trade agreements.
c. The procurement provisions of all trade agreements are similarly structured in that if a proposed
contract meets certain criteria it is covered by the agreement; if it does not meet all the stated criteria
then it is not covered. A proposed contract can be, and often is, covered by more than one agreement.
d. Coverage Under Multiple Agreements

For all trade agreements, PWGSC is required to comply with specific procedures when completing
certain procurements. Therefore a decision must be made as to whether or not the requisition is subject
to a particular agreement, or a combination of agreements. To determine coverage under the various
trade agreements, the estimated procurement value (including the estimated amount of the Goods and
Services Tax or the Harmonized Sales Tax), the client, the type of good(s) or service(s) or construction,
and any exceptions or exclusions must be reviewed. Contracting officers should note that when the
procurement is covered by more than one agreement, all agreements must be complied with at the same
time. In order to accomplish this, the procedures to be followed are the procedures that are considered
the most rigorous. For example, for limited tendering reasons, procurements covered by NAFTA,
CETA, WTO-AGP and CFTA, only the limited tendering reasons that are common to all four
agreements are available as options.
e. For assistance with the application of the trade agreements, contracting officers may contact the Trade
Agreement Unit of the Strategic Policy Sector, either by telephone at 819-420-1710, or by e-mail at
natalie.dupont@tpsgc-pwgsc.gc.ca.
1.25.5 North American Free Trade Agreement (NAFTA)

(2017-08-17)
a. The North American Free Trade Agreement Implementation Act (S.C. 1993, c. 44) sets out Canada's
commitment to reduce trade barriers between Canada, the United States of America and the Federal
Republic of Mexico. Chapter 10 of the Agreement focuses on achieving greater competition for, and
transparency in, government procurement, eliminating the protection of domestic products or suppliers
or discrimination among foreign products or suppliers. The "National Treatment" clause and the "Non-
discrimination" clause are similar as those found in the WTO-AGP.
b. The use of measures to improve socioeconomic development (offsets) for procurements covered by
NAFTA is prohibited. See Article 1006: Prohibition of Offsets. Note that set-asides for minority
businesses are permitted as described in paragraph e.v. below.
c. To determine whether NAFTA is applicable, the agreement (Chapter 10) must be consulted. In the
following sections on determining NAFTA coverage, all references to an "Annex" are to the annexes of
Chapter 10 of NAFTA.
d. For purposes of determining coverage, a requisition is considered to be one for:
i. goods;
ii. services; or
iii. construction services;
based on the one that represents more than 50 percent of the estimated value of the requisition.
e. To determine if a procurement is subject to NAFTA, refer to the following:
i. Determine the value of the requisition. See Article 1001: Scope and Coverage, Article 1002:
Valuation of Contracts, and Annex 1001.2c Country-Specific Thresholds of NAFTA. The
thresholds in NAFTA are presented in U.S. dollars. The values in Canadian dollars are based upon
conversion factors, as agreed upon in the Agreement, and are revised every two years. They are
published in Treasury Board Contracting Policy Notice 2015-3. The conversions below are in
effect until December 31, 2017.
ii. A procurement may be subject to NAFTA if the requisition value, in Canadian dollars, is as
follows:
A. for goods being procured by departments and agencies (including some Commissions and
Boards): $28,900. See subparagraph 1001(1)(c)(i);
B. for services being procured by departments and agencies: $89,600. See subparagraph
1001(1)(c)(i);
C. for construction services being procured by departments and agencies: $11,600,000. See
subparagraph 1001(1)(c)(i).
iii. Determine the coverage by client. See Annex 1001.1a-1 Federal Government Entities and Annex
1001.1a-2 Government Enterprises.
iv. Determine the coverage by type of requirement:
A. goods – See Annex 1001.1b-1 Goods; or
B. services – See Annex 1001.1b-2 Services; or
C. construction services – See Annex 1001.1b-3 Construction Services.
v. Determine if an exception, such as the one for national security, should be invoked for the
requirement. Article 1018: Exceptions provides the complete list of exceptions. See Supply
Manual section 3.105 National Security Exceptions for more information on National Security
Exceptions.
vi. Determine if the requirement is excluded from the Agreement. Annex 1001.2b General Notes
provides the complete list of types of requirements that are excluded from NAFTA, for example,
paragraph 1.(d) provides for set-asides for minority businesses. Therefore, procurements that are
set aside (i.e. reserved) for either CLCA beneficiaries, or for aboriginal businesses under the
Procurement Strategy for Aboriginal Business (PSAB), are excluded from the Agreement, making
the obligations of NAFTA) no longer applicable. For more information on when procurements
can be reserved for CLCA beneficiaries, see 9.35 Comprehensive Land Claims Agreements
(CLCAs). For more information on PSAB, see 9.40 Procurement Strategy for Aboriginal
Business.
1.25.10 World Trade Organization Agreement on Government Procurement (WTO-AGP)

(2014-03-01)
a. World Trade Organization Agreement on Government Procurement (WTO-AGP)

(http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm) is an agreement, which aims to secure greater
international competition for government procurement. It provides procurement procedures, which
Canada abided to.
b. The Agreement also contains provisions of national treatment and non-discrimination that Canada must
respect (Article III). National treatment means that
"…each Party shall provide immediately and unconditionally to the products, services and suppliers of
other Parties offering products or services of the Parties, treatment no less favorable than:
i. that accorded to domestic products, services and suppliers; and

ii. that accorded to products, services and suppliers of any other Party."
c. Non-discrimination means that
"…each Party shall ensure:
i. that its entities shall not treat a locally-established supplier less favorably than another locally-
established supplier on the basis of degree of foreign affiliation or ownership; and
ii. that its entities shall not discriminate against locally-established suppliers on the basis of the
country of production of the good or service being supplied, provided that the country of
production is a Party to the Agreement in accordance with the provisions of Article IV."
d. The use of measures to improve socioeconomic development (offsets) for procurements covered by
WTO-AGP is generally prohibited. See Article XVI: Offsets (http://www.wto.org/english/docs_e/legal_e/gpr-
94_02_e.htm#articleXVI) . Note that set-asides for minority businesses are permitted as described in
paragraph h.vi. below.
e. To fully determine whether the WTO-AGP is applicable, the Agreement must be consulted. In the
following Sections on determining WTO-AGP coverage, all references to an "Annex" are to the annexes
to the WTO-AGP.
f. Each Party to the WTO-AGP has an Appendix, which includes five Annexes defining the coverage of
that Party's obligations.
g. A procurement is covered by the WTO-AGP if:
i. its value is equal to or greater than the relevant threshold;
ii. if the type of requirement (e.g. plumbing supplies) is covered;
iii. if the entity for which the procurement is being done is covered, and
iv. if there is no specific exception applicable (e.g. shipbuilding) or invoked (e.g. national security).
All four criteria must be met in order for the procurement to be covered by the WTO-AGP. See
below for how to determine if these criteria are met.
h. To determine if a procurement is subject to the WTO-AGP, refer to the following:
i. Determine the value of the requisition. See Article I: Scope and Coverage
(http://www.wto.org/english/docs_e/legal_e/gpr-94_01_e.htm#articleI) ; Article II: Valuation of Contracts
(http://www.wto.org/english/docs_e/legal_e/gpr-94_01_e.htm#articleII) , and Appendix I, Annex 1 Federal
Government Entities (DOC Version 66 KB) (http://www.wto.org/english/tratop_e/gproc_e/can1e.doc) - (Help
on File Formats) of WTO-AGP. The thresholds in the WTO-AGP are presented in the Special
Drawing Rights, the unit of account of the International Monetary Fund. The threshold is
converted to Canadian dollars and published in a Treasury Board Contracting Policy Notice,
which is reviewed every two years.
A procurement may be subject to WTO-AGP if the requisition value in Canadian dollars
(including taxes) is as follows for the period January 1, 2012, to December 31, 2013:
A. For goods and services being procured by a federal government entity, including
departments, and some Commissions and Boards: $200,900. See Appendix I, Annex 1
Federal Government Entities (DOC Version 66 KB)
(http://www.wto.org/english/tratop_e/gproc_e/can1e.doc) ; and
B. For construction for federal government entities: $7,700,000. See Appendix I, Annex 1
Federal Government Entities (DOC Version 66 KB)
(http://www.wto.org/english/tratop_e/gproc_e/can1e.doc) .
ii. Determine whether the client department is covered by determining if they are listed in Canada's
Annex 1 Federal Government Entities (DOC Version 66 KB)
(http://www.wto.org/english/tratop_e/gproc_e/can1e.doc) .
iii. Determine the coverage by the client. See Appendix I, Annex 1 Federal Government Entities
(DOC Version 66 KB) (http://www.wto.org/english/tratop_e/gproc_e/can1e.doc) .
iv. Determine the coverage by type of requirement:
A. goods – See Appendix I, Annex 1 Federal Government Entities (DOC Version 66 KB)
(http://www.wto.org/english/tratop_e/gproc_e/can1e.doc) , or
B. services – See Appendix I, Annex 1 Federal Government Entities (DOC Version 66 KB)
(http://www.wto.org/english/tratop_e/gproc_e/can1e.doc) and Annex 4 Services (DOC Version 57 KB)
(http://www.wto.org/english/tratop_e/gproc_e/can4e.doc) . The WTO-AGP identifies services
coverage, according to the United Nations Central Product Classification system of
classification.
C. construction services – See Appendix 1, Annex 1 Federal Government Entities (DOC

Version 66 KB) (http://www.wto.org/english/tratop_e/gproc_e/can1e.doc) and Annex 5 Construction
Services (DOC Version 36 KB) (http://www.wto.org/english/tratop_e/gproc_e/can5e.doc) .
v. Determine if an exception, such as the one for national security, should be invoked for the
requirement. Article XXIII: Exceptions to the Agreement (http://www.wto.org/english/docs_e/legal_e/gpr-
94_02_e.htm#articleXXIII) provides the complete list of exceptions. See Supply Manual section 3.105
National Security Exceptions for more information on National Security Exceptions.
vi. Determine if the requirement is excluded from the Agreement. Canada’s General Notes
(http://www.wto.org/english/tratop_e/gproc_e/appendices_e.htm#generalnotes) in Annex 5 to Appendix I provide
the complete list of types of requirements that are excluded from WTO-AGP, for example, Article
1.(d) provides for set-asides for minority businesses. Therefore, procurements that are set aside
(i.e. reserved) for either CLCA beneficiaries, or for aboriginal businesses under the Procurement
Strategy for Aboriginal Business (PSAB), are excluded from the Agreement, making the
obligations of the WTO-AGP no longer applicable. For more information on when procurements
can be reserved for CLCA beneficiaries, see 9.35 Comprehensive Land Claims Agreements
(CLCAs). For more information on PSAB, see 9.40 Procurement Strategy for Aboriginal
Business.
1.25.11 Canada-European Union Comprehensive Economic and Trade Agreement (CETA)

(2017-09-21)
a. The Canada-European Union Comprehensive Economic and Trade Agreement (CETA)

(http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/toc-
tdm.aspx?lang=eng) is an agreement, which aims to build on the WTO-AGP and secure greater market
access opportunities for Canadian suppliers. Chapter 19 (http://www.international.gc.ca/trade-commerce/trade-
agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/19.aspx?lang=eng) of CETA sets out the procedural rules
and market access commitments that both Canada and EU members must abide by.
i. The format and obligations, including the "non-discrimination" and "national treatment" clauses
as set out in CETA, are similar to that of the WTO-AGP, to which Canada and the EU are both
party.
b. CETA does not contain an exception for small and minority owned businesses set asides; however, it
contains an exception for any measures adopted or maintained with respect to Aboriginal peoples,
including set asides for Aboriginal businesses, as described in paragraph f.vi below.
c. To determine whether CETA is applicable, the Agreement (Chapter 19 (http://www.international.gc.ca/trade-

commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/19.aspx?lang=eng) ) must be consulted. In
the following sections on determining CETA coverage, all references to an "Annex" are to the annexes
of CETA Chapter 19.
d. Each Party to CETA has an Appendix, which includes eight annexes defining the coverage of that
Party's obligations.
e. A procurement is covered by CETA if:
i. its value is equal to or greater than the relevant threshold;
ii. if the type of requirement (e.g. plumbing supplies) is covered;
iii. if the entity for which the procurement is being done is covered, and
iv. if there is no specific exception applicable (e.g. shipbuilding) or invoked (e.g. national security).
All four criteria must be met in order for the procurement to be covered by CETA. See below for how to
determine if these criteria are met.
f. To determine if a procurement is subject to CETA, refer to the following:
i. Determine the value of the requisition. See Article I9.2: Scope and Coverage
texte/19.aspx?lang=eng) , which includes the valuation of contracts (Articles 19.2.6-19.2.8), and

Annex 19-1 Central Government Entities (http://www.international.gc.ca/trade-commerce/trade-agreements-
accords-commerciaux/agr-acc/ceta-aecg/text-texte/19-A.aspx?lang=eng#a1) . The thresholds in CETA are
expressed in Special Drawing Rights, the unit of account of the International Monetary Fund. The
thresholds are converted to Canadian dollars and published in a Treasury Board Contracting
Policy Notice, which will be reviewed every two years, commencing January 1, 2018.
A procurement may be subject to CETA, if the requisition value in Canadian dollars (including
taxes) is as follows (valid until December 31, 2017):
A. For goods and services being procured by a federal government entity, including
departments, and some Commissions and Boards: $221,400. See Annex 19-1 Central
Government Entities (http://www.international.gc.ca/trade-commerce/trade-agreements-accords-
commerciaux/agr-acc/ceta-aecg/text-texte/19-A.aspx?lang=eng#a1) ;
B. For construction services for federal government entities: $8,500,000. See Annex 19-1
Central Government Entities (http://www.international.gc.ca/trade-commerce/trade-agreements-accords-
commerciaux/agr-acc/ceta-aecg/text-texte/19-A.aspx?lang=eng#a1) ;
C. For goods and services being procured by a federal Crown Corporation: $604,700. See
Annex 19-3: Other Entities (http://www.international.gc.ca/trade-commerce/trade-agreements-accords-
commerciaux/agr-acc/ceta-aecg/text-texte/19-A.aspx?lang=eng#a3) ; and
D. For construction services for federal Crown Corporations: $8,500,000. See Annex 19-3:
Other Entities (http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-
acc/ceta-aecg/text-texte/19-A.aspx?lang=eng#a3) .
ii. Determine whether the client department is covered by determining if they are listed in Canada's
Annex 19-1 Central Government Entities (http://www.international.gc.ca/trade-commerce/trade-agreements-
accords-commerciaux/agr-acc/ceta-aecg/text-texte/19-A.aspx?lang=eng#a1) or Annex 19-3: Other Entities
(http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/19-
A.aspx?lang=eng#a3) .
iii. Determine the coverage by type of requirement:
A. Goods: Annex 19-4 (http://www.international.gc.ca/trade-commerce/trade-agreements-accords-

commerciaux/agr-acc/ceta-aecg/text-texte/19-A.aspx?lang=eng#a4) : All goods are covered, with
exceptions for DND, the RCMP, the Department of Fisheries and Oceans for the Canadian
Coast Guard, and the Canadian Air Transport Security Authority;
B. Services: Annex 19-5 (http://www.international.gc.ca/trade-commerce/trade-agreements-accords-

commerciaux/agr-acc/ceta-aecg/text-texte/19-A.aspx?lang=eng#a5) : Only those services listed are
covered. CETA identifies services coverage, according to the United Nations Central
Product Classification (CPC) system of classification; or
C. Construction Services: Annex 19-6 (http://www.international.gc.ca/trade-commerce/trade-agreements-

accords-commerciaux/agr-acc/ceta-aecg/text-texte/19-A.aspx?lang=eng#a6) : All construction services are
covered. Note that dredging services are covered by CETA (as described in paragraph v.
below).
iv. Determine if an exception, such as the one for national security, should be invoked for the
requirement. Article 19.3: Security and General Exceptions (http://www.international.gc.ca/trade-
commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/19.aspx?lang=eng) provides the
complete list of exceptions. See Supply Manual, section 3.105 National Security Exceptions for
more information on National Security Exceptions.
v. For central government entities in Annex 19-1 (http://www.international.gc.ca/trade-commerce/trade-

agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/19-A.aspx?lang=eng#a1) , this Annex includes
dredging services subject to the following requirements where the estimated value of the
procurement is $8,500,000 or more:
A. the vessel or other floating plant equipment used in the supply of the dredging services:
a. is of Canadian or European Union make or manufacture; or
b. has been predominantly modified in Canada or the European Union and has been
owned by a person located in Canada or the European Union for at least a year prior
to the submission of the tender by the bidder; and
B. the vessel must be registered in:
a. Canada; or
b. a Member State of the European Union and have been granted a temporary licence
under the Coasting Trade Act, S.C. 1992, c. 31. The temporary licence will be
granted to the European Union vessel, subject to applicable non-discretionary
requirements. The requirement that a temporary licence will only be issued if there is
no Canadian duty or non-duty paid vessel available will not be applied to the
application for that temporary licence.
vi. Determine if the requirement is excluded from the Agreement. Canada's General Notes in Annex
19-7 (http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-
texte/19-A.aspx?lang=eng#a7) provides the complete list of types of requirements that are excluded
from CETA, for example, paragraph 2(a) provides that the Chapter does not apply to set asides for
aboriginal businesses. Therefore, procurements that are set aside (i.e. reserved) for either CLCA
beneficiaries, or for Aboriginal businesses under the Procurement Strategy for Aboriginal
Business (PSAB), are excluded from the Agreement, making the obligations of CETA no longer
applicable. For more information on when procurements can be reserved for CLCA beneficiaries,
see 9.35 Comprehensive Land Claims Agreements (CLCAs). For more information on PSAB, see
9.40 Procurement Strategy for Aboriginal Business.
1.25.14 Canadian Free Trade Agreement (CFTA)

(2017-07-01)
a. The Canadian Free Trade Agreement (CFTA) is a comprehensive agreement on Canadian internal trade
which commits governments to a comprehensive set of rules that will help to achieve a modern and
competitive economic union for all Canadians.
b. The CFTA replaces the Agreement on Internal Trade (AIT) on July 1, 2017. The CFTA applies only to
procurements commenced on or after July 1, 2017. The AIT will continue to apply to procurements
commenced before July 1, 2017, until those procurements are complete. The procurement process
commences after an entity has decided on its requirement.
c. Chapter Five – Government Procurement of the CFTA is intended to "establish a transparent and
efficient framework to ensure fair and open access to government procurement opportunities for all
Canadian suppliers”.
d. In the following sections on determining CFTA coverage, all references to an "Annex" are to the
annexes to Chapter Five - Government Procurement of the CFTA.
e. If all of the following CFTA criteria are met, the procurement is subject to CFTA:
i. Determine when the procurement process commenced. If the procurement process was
commenced on or after July 1, 2017, it may be subject to the CFTA. The procurement process
commences after an entity has decided on its requirement (see Article 1210: Entry into Force and
Article 1211: Termination of the Agreement on Internal Trade).
ii. Determine the value of the requisition. See Article 504: Scope and Coverage, Annex 505:
Valuation, and Annex 504.4: Inflation Adjustment. The thresholds of the CFTA will be adjusted
for inflation every two years. The current thresholds are published in Treasury Board Contracting
Policy Notice 2015-3. The thresholds below are in effect until December 31, 2017.
iii. A procurement may be subject to the CFTA if the requisition value is:
A. $25,000 or greater for goods, if the largest portion of the procurement is for goods
B. $100,000 or greater for services, excluding construction, if the largest portion of the
procurement is for services; or
C. $100,000 or greater in the case of construction
iv. Determine the coverage by client. All federal departments, agencies and Crown corporations are
subject to the CFTA procurement procedures, except those listed in the Schedule of Canada in
Annex 520.1 Party-Specific Exceptions.
v. Determine the coverage by the type of requirement. All goods, services, and construction services
are covered by the CFTA Procurement Chapter unless specified in the Schedule of Canada in
Annex 520.1: Party-Specific Exceptions.
vi. Determine if a general exception applies. See Article 504: Scope and Coverage and Chapter 8:
General Exceptions.
f. Under Article 800: Aboriginal Peoples, the CFTA does not apply to any measure adopted or maintained
by a Party with respect to Aboriginal peoples.
i. There are two ways in which Comprehensive Land Claims Agreements (CLCAs) and the CFTA
interact:
A. If a procurement is reserved for CLCA beneficiaries because of a right of first refusal under
that CLCA, then the contracting authority must indicate in the solicitation document and
any tender notice that the procurement is set aside from the CFTA. In this case, the entire
procurement process is not subject to CFTA, and the procurement no longer falls under the
jurisdiction of the Canadian International Trade Tribunal (CITT). This situation does not
eliminate the requirement to comply with the Government Contracts Regulations. For more
information on CLCAs, see 9.35 Comprehensive Land Claims Agreements (CLCAs).
B. For a procurement that is subject to the CFTA but not to any international trade agreements,
any measure for Aboriginal peoples, including CLCA evaluation criteria, is not subject to
CITT review, although the rest of the procurement process, unless set aside for Aboriginal
business, must be conducted in compliance with the CFTA provisions and is reviewable by
the CITT.
ii. When the procurement has been set aside for Aboriginal business under the Procurement Strategy
for Aboriginal Business (PSAB), the entire procurement process is not subject to CFTA and the
procurement no longer falls under the jurisdiction of the CITT. For more information on PSAB,
see 9.40 Procurement Strategy for Aboriginal Business.
1.25.15 Agreement on Internal Trade (AIT)

(2017-07-01)
a. The Agreement on Internal Trade (AIT) is a comprehensive agreement on Canadian internal trade in
recognition of the need to reduce barriers to trade within Canada. The AIT is in the process of being
phased out.
b. The AIT is being replaced with the Canadian Free Trade Agreement (CFTA) on July 1, 2017. The
CFTA applies to procurements commenced on or after July 1, 2017. The AIT will continue to apply
after July 1, 2017 to any procurement commenced before that date, until those procurements are
complete. The procurement process commences after an entity has decided on its requirement.
c. Chapter Five - Procurement (http://www.ic.gc.ca/eic/site/ait-aci.nsf/eng/il00006.html) of the AIT is intended to

"establish a framework that will ensure equal access to procurement for all Canadian suppliers in order
to contribute to a reduction in purchasing costs and the development of a strong economy, in a context
of transparency and efficiency".
d. In the following sections on determining AIT coverage, all references to an "Annex" are to the annexes
to Chapter Five - Procurement, of the AIT.
e. If all of the following AIT criteria are met, the procurement is subject to AIT:
i. Determine when the procurement process commenced. If the procurement process was
commenced before July 1, 2017, it may be subject to the AIT. The procurement process
commences after an entity has decided on its requirement (see Article 1210: Entry into Force and
Article 1211: Termination of the Agreement on Internal Trade of the CFTA).
ii. Determine the value of the requisition. A procurement may be subject to AIT if the requisition
value is:
A. $25,000 or greater, in cases where the largest portion of the procurement is for goods;
B. $100,000 or greater, in cases where the largest portion of the procurement is for services,
except those services excluded by Annex 502.1B Services Covered by Chapter Five; or
C. $100,000 or greater, in the case of construction.
iii. Determine the coverage by client. Entities listed in Annex 502.1A Government Entities Covered
by Chapter Five, are subject to the AIT procurement procedures. Entities listed in Annex 502.2A
are excluded from Chapter Five of the AIT.
iv. Determine the coverage by the type of requirement:
A. all requirements for the purchase, lease or rental of goods are covered;
B. all services are covered except for those listed in Annex 502.1B Services Covered by
Chapter Five; and
C. all construction procurement is covered.
v. Determine if an exception should be invoked for the requirement or if the requirement is excluded
from the agreement. See Article 507: Non-Application; Article 1802: Aboriginal Peoples; Article
1803: Culture; and Article 1804: National Security.
f. Under Article 1802: Aboriginal Peoples, the AIT does not apply to any measure adopted or maintained
with respect to Aboriginal peoples.
i. There are two ways in which Comprehensive Land Claims Agreements (CLCAs) and AIT
interact:
A. If a procurement is reserved for CLCA beneficiaries because of a right of first refusal under
that CLCA, then the contracting authority must indicate in the solicitation document and
any tender notice that the procurement is set aside from AIT. In this case, the entire
procurement process is not subject to AIT, and the procurement no longer falls under the
jurisdiction of the Canadian International Trade Tribunal (CITT). This situation does not
eliminate the requirement to comply with the Government Contracts Regulations. For more
information on CLCAs, see 9.35 Comprehensive Land Claims Agreements (CLCAs).
B. For a procurement that is subject to AIT but not to any international trade agreements, any
measure for Aboriginals, including CLCA evaluation criteria, is not subject to CITT review,
although the rest of the procurement process must be conducted in compliance with the AIT
provisions and is reviewable by CITT.
ii. When the procurement has been set aside for Aboriginal business under the Procurement Strategy
for Aboriginal Business (PSAB), the entire procurement process is not subject to AIT and the
procurement no longer falls under the jurisdiction of CITT. For more information on PSAB, see
9.40 Procurement Strategy for Aboriginal Business.
1.25.16 Bilateral Free Trade Agreements

(2017-08-17)
a. It is a government priority to expand Canada's trade by negotiating a number of bilateral trade

agreements in the coming years. The Canada - Chile Free Trade Agreement (CCFTA) Part Three this-
Government Procurement portion came into effect on September 5, 2008. The Canada - Peru Free Trade
Agreement (CPFTA) came into effect on July 1, 2009. Chapter 14 of the CPFTA covers procurement.
b. Neither the CCFTA nor the CPFTA have any reporting requirements.
c. In general, the Supply Manual refers only to NAFTA and the WTO-AGP, as procedural requirements of
the other international trade agreements will be fulfilled following compliance to the procedural
requirements of NAFTA and the WTO-AGP.
1.25.20 Comprehensive Land Claims Agreements

(2013-11-06)
a. The federal government, represented by Aboriginal Affairs and Northern Development Canada
(AANDC), has negotiated a number of Comprehensive Land Claims Agreements (CLCAs) with
Aboriginal peoples. CLCAs are modern treaties that are based on the concept of continued Aboriginal
rights and title to lands traditionally used and occupied by an Aboriginal group, which have not been
dealt with by treaty or other legal means.
b. CLCAs are law. The CLCA obligations are legally binding because they are contained in agreements
signed by Canada and backed by legislation. Furthermore, the Aboriginal rights detailed within them are
constitutionally protected under Section 35 of the Constitution Act 1982.
c. Most CLCAs include measures dealing with procurement, and although these measures are not always
identical in the various agreements, they are all aimed at enhancing economic opportunities of the
Aboriginal group benefiting from the agreement, usually through increased possibilities of competing
successfully for contracts in their settlement areas or of participating in employment, training or
subcontracting opportunities.
d. To determine whether CLCAs apply to a procurement, and to learn how to address the CLCA
obligations during the procurement process, refer to 9.35 Comprehensive Land Claims Agreements
(CLCAs).
1.25.25 Other Agreements

(2010-01-11)
Contracting officers should also be aware that a number of National Park Agreements and Department of
National Defence Co-operation Agreements have been signed between individual departments and certain
aboriginal groups. Reference to these agreements can be found in sections 7 to 10 of Treasury Board Secretariat
Contracting Policy Notice 1997-8 (http://www.tbs-sct.gc.ca/Pubs_pol/dcgpubs/ContPolNotices/97-8-eng.asp) .
1.30 Policies, Directives and Guidelines

(2010-01-11)
1.30.1 Treasury Board

(2010-01-11)
a. The Treasury Board (TB) is a Cabinet committee of the Queen's Privy Council of Canada. TB is
responsible for accountability and ethics, financial, personnel and administrative management,
comptrollership, approving regulations and most orders-in-council.
b. As the administrative arm of TB, the Treasury Board of Canada Secretariat (TBS) has a dual mandate to
support TB as a committee of ministers and to fulfill the statutory responsibilities of a central
government agency. TBS provides advice and support to TB ministers in their role of ensuring value-
for-money and provides oversight of the financial management functions in departments and agencies.
TBS makes recommendations and provides advice to the TB on policies, directives, regulations, and
program expenditure proposals with respect to the management of the government's resources.
1.30.5 Treasury Board Contracting Policy

(2017-09-21)
a. The Treasury Board Contracting Policy, established under s. 7(1) of the Financial Administration Act
(FAA), sets out the policy objective for government contracting as being that to acquire goods and
services and to carry out construction in a manner that enhances access, competition and fairness and
results in best value or, if appropriate, the optimal balance of overall benefits to Canada and the
Canadian people. It provides that:
b. Government contracting must be conducted in a manner that will:
i. Stand the test of public scrutiny in matters of prudence and honesty, facilitate access, encourage
competition and reflect fairness in the spending of public funds.
ii. Ensure the pre-eminence of operational requirements.
iii. Support long-term industrial and regional development and other appropriate national objectives,
including aboriginal economic development.
iv. Comply with the government's obligations under NAFTA, WTO-AGP, CETA CFTA and AIT.
1.30.10 Treasury Board Common Services Policy

(2010-01-11)
The objective of the Common Services Policy (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12025) is to ensure that

departments and agencies can acquire responsive, cost-effective support for their program delivery. It further
provides that client service organizations will offer services to client departments in a manner that is most
supportive of timely, effective and economical delivery of programs to the public. PWGSC is identified both as
a provider of mandatory common services under Appendix E - Mandatory Services (http://www.tbs-sct.gc.ca/pol/doc-
eng.aspx?id=12025&section=text#appE) of the policy, and of optional common services under Appendix F - Optional
Services (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12025&section=text#appF) of the policy.
1.30.15 Treasury Board Contracts Directive

(2010-01-11)
The Appendix C - Treasury Board Contracts Directive (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?

id=14494&section=text#appC) , issued pursuant to section 10 and paragraph 41(1)(a) of the FAA, sets basic
contracting limits for contracting authorities, and provides specific contracting limits for specific ministers. The
TB Contracts Directive sets out the limits above which departments must obtain TB approval. The application
of the Directive to PWGSC is set out in Chapter 6 Approvals and Authorities.
1.30.20 Treasury Board Procurement Review Policy

(2014-03-13)
The objective of the Procurement Review Policy (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12074) is to enhance the

use of procurement in support of industrial and regional development and other national objectives in a manner
that is fully consistent with the government's approved procurement objectives, and with Canada's international
commitments within the General Agreement on Tariffs and Trade, NAFTA or other trade rights and obligations.
See 3.70 Procurement Review for further details.
1.30.25 Code of Conduct for Procurement

(2016-04-04)
The Code of Conduct for Procurement (http://www.tpsgc-pwgsc.gc.ca/app-acq/cndt-cndct/contexte-context-eng.html)

consolidates the government's existing legal, regulatory and policy requirements into a concise and transparent
statement of the expectations that the government has of its employees and its suppliers. It ensures that public
servants and suppliers are working from the same statement of expectations and commitments that clearly
outline what is acceptable conduct when contracting with the government. The Code applies to all procurements
done by Public Works and Government Services Canada (PWGSC) (for PWGSC and/or on behalf of client
departments) and it requires that PWGSC abide by the legislation and policies outlined in the Code. It is a single
point of reference to key responsibilities and obligations of public servants and suppliers.
1.35 Challenge Process

(2010-01-11)
1.35.1 Canadian International Trade Tribunal

(2017-11-28)
a. The trade agreements require that each party have a bid challenge mechanism in place. The Canadian
International Trade Tribunal (CITT) (http://www.citt-tcce.gc.ca/en) is the bid challenge authority for Canada
for the North American Free Trade Agreement (NAFTA) (http://www.international.gc.ca/trade-agreements-accords-
commerciaux/agr-acc/nafta-alena/index.aspx?view=d) , Canada-European Union Comprehensive Economic and
Trade Agreement (CETA) (http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-
acc/ceta-aecg/text-texte/toc-tdm.aspx?lang=eng) , World Trade Organization Agreement on Government
Procurement (WTO-AGP) (http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm) , Canada - Chile Free Trade
Agreement (CCFTA), Canada - Peru Free Trade Agreement (CPFTA), Canadian Free Trade Agreement
and Agreement on Internal Trade (AIT) (http://www.ic.gc.ca/eic/site/ait-aci.nsf/eng/home) . A potential supplier
may file a complaint concerning a procurement action to the CITT, on the grounds that any aspect of the
procurement process relating to a requirement covered by these agreements is unfair or discriminatory.
Under the CFTA, Canadian provinces and territories must also establish or designate an independent
administrative or judicial authority to receive and review bid challenges.
b. CITT is authorized to receive complaints pertaining to any aspect of the procurement process up to and
including contract award, and also to conduct inquiries and make determinations. In dealing with a
complaint, CITT must determine whether the government institution responsible for the procurement
under review has complied with the requirements of the trade agreements and such other procedural
requirements, as prescribed in the Canadian International Trade Tribunal Procurement Inquiry
Regulations.
c. Contracting officers may contact the PWGSC CITT expert advisor, either by telephone at 819-420-2069
or by email at TPSGC.BCRPA-CAPRO.PWGSC@tpsgc-pwgsc.gc.ca, for assistance with respect to an
actual or potential CITT action. Contracting officers should encourage suppliers to resolve issues
directly with PWGSC before making a complaint to the CITT. Any matter brought to the attention of
the contracting officer should be handled with a minimum of delay, while exercising due care and
judgment. Experience demonstrates that there are often minor errors, omissions, or other inadvertent
actions, which can quickly be clarified or corrected to the satisfaction of all concerned, thus removing
the basis of many problems and concerns at the outset.
d. All PWGSC actions in response to a complaint filed with the CITT are coordinated through the PWGSC
Coordination of Acquisitions Program Response Office. All requests, decisions, reports, letters, etc, to
the CITT will be coordinated by CAPRO in consultation with Legal Services and the procurement
organization. The procurement organization is responsible for preparing a chronology of events that will
form the "backbone" of the Government Institution Report (GIR). Legal Services will produce the
remaining sections, with input from the procurement organization, other departmental specialists, and
the client department, as required. The procurement organization's management remains responsible to
review and approve the GIR, before the sign-off.
e. Contracting officers must ensure that complete documentation and records dealing with the complaint,
including a dated record of all communications with suppliers, are maintained in order to substantiate
that the procurement process was carried out in accordance with the obligations of the trade agreements.
Throughout the complaint process, PWGSC will keep the client informed of actions taken in response to
the complaint, as well as any notices, decisions, information, etc. received from the CITT.
f. The Assistant Deputy Minister, Acquisitions Branch, is the signing authority for requests for the
rescission of Postponement of Award Orders.
g. Details about the CITT, including its complaint and inquiry process, are in the publication Procurement
Review Process: A Descriptive Guide (http://www.citt.gc.ca/en/Procurement_Review_Process_e) . The CITT
Determinations (http://www.citt.gc.ca/en/procurement/determinations) , Notices
(http://www.citt.gc.ca/en/procurement/notices) and Orders (http://www.citt.gc.ca/en/procurement/orders-and-reasons-
procedural-and-others) can also be viewed on the CITT Web site.
1.35.5 Procurement Ombudsman

(2017-11-28)
a. Sections 306 and 307 of the Federal Accountability Act (FedAA) amend the Department of Public
Works and Government Services Act to provide for the appointment and mandate of a procurement
ombudsman. The Procurement Ombudsman has four primary functions, which are to:
i. review the practices of departments for acquiring materiel and services to assess their fairness,
openness and transparency and make any appropriate recommendations to the relevant
department for the improvement of those practices;
ii. review any complaint respecting the award of a contract for the acquisition of goods below the
value of $25,000 and services below the value of $100,000;
iii. review any complaint respecting the administration of a contract for the acquisition of materiel or
services by a department, regardless of dollar value;
iv. ensure that an alternative dispute resolution process is provided, if both parties agree to
participate;
v. a possible fifth function is that the Federal Accountability Act also specifies that the Procurement
Ombudsman can also perform any other duty or function respecting the practices of departments
for acquiring materiel and services that may be assigned to the Procurement Ombudsman by order
of the Governor in Council or the Minister of Public Works and Government Services Canada.
b. The Office of the Procurement Ombudsman (OPO) performs its duties and functions as set out in the
Procurement Ombudsman Regulations.
c. The role of coordinating supplier complaints to OPO as well as OPO reviews of those procurement
practices performed by Acquisitions Branch on behalf of clients has been assigned to the Coordination
of Acquisitions Program Response Office.
d. For assistance with respect to OPO related activities or potential complaints, contracting officers may
contact the PWGSC Coordination of Acquisitions Program Response Office, by telephone at 819-420-
2069 or by email at TPSGC.BCRPA-CAPRO.PWGSC@tpsgc-pwgsc.gc.ca.
1.40 Departmental Delegation of Authority

(2010-01-11)
1.40.1 Use of Judgment and Knowledge

(2010-01-11)
a. The individual requirements of a particular procurement may suggest that a course of action other than
one set out in this Manual should be followed. Wherever there is no instruction on a particular subject,
contracting officers must use their judgement and knowledge following the guiding principles at
subsection 1.10.5 Guiding Principles.
b. PWGSC may be required to defend publicly a contracting officer's actions, and the contracting officer
will be required to substantiate those actions. In the event that there is a need to deviate from an
established policy or procedure, the process to be followed can only be presented in general terms:
i. Any deviation must be identified in advance and must be carefully assessed and justified
(including the reason for the deviation and the consequences of not deviating) for approval by the
director general.
ii. The director general must determine whether more senior officials must become involved in the
decision to deviate.
1.40.5 Contract Approval and Signing Authorities

(2010-01-11)
Contracting officers are delegated authorities from the Minister of Public Works and Government Services
Canada (PWGSC) to provide procurement and acquisitions-related services to departments and agencies. See
Chapter 6 Approvals and Authorities for further details.
1.45 Division of Responsibilities between PWGSC and Client Departments

(2014-11-27)
a. The matrix at Annex 1.1: Matrix of Responsibilities between PWGSC and Client Departments for the
Procurement of Goods and Services (Generic) provides a generic division of anticipated types of
responsibilities between PWGSC and client departments. It forms the basis for an effective and efficient
partnering relationship for those who are responsible for activities within the procurement process.
b. The division of responsibilities, as shown in the matrix, represents a standard way of doing business.
However, as every procurement and associated contract differs, alternate divisions of roles and
responsibilities can be established in advance by way of a written agreement between PWGSC and the
client. Such client-specific or procurement-specific arrangements or matrices will take precedence over
this generic matrix. Legislation, regulations and policy will also take precedence over this matrix.
Annex 1.1.2: Specific Division of Responsibilities Agreements contains two client-specific agreements
with the Department of National Defence.
c. A Memorandum of Understanding (MOU) has been signed with the Canadian Commercial Corporation.
Details for these special procurement processes are described in Chapter 9 - Special Procurements.
d. The Client Engagement Sector (CES) maintains copies of separate MOUs signed for individual business
requirements, which may be obtained by contacting this sector.
e. All Major Crown Projects (MCPs) have MOUs signed between the project and the contracting
authorities to delineate project management responsibilities between the two departments. Copies of
these MOUs may also be obtained from the CES or appropriate MCP office.
1.45.1 Litigation Costs

(2015-02-25)
If a procurement conducted by Public Works and Government Services Canada on behalf of the client
department is subject to any litigation proceedings (including a complaint to the Canadian International Trade
Tribunal or to the Office of the Procurement Ombudsman, or other alternative dispute resolution process), the
client will cover all of the costs (including legal costs, departmental administrative costs, any damages and any
amounts required to be paid to third parties) associated with such proceedings.
1.50 Fairness monitoring

(2015-09-24)
a. PWGSC's fairness monitoring process provides independent assurance that specific PWGSC
procurements are conducted in a fair, open and transparent manner.
b. A fairness monitor is an independent third party whose role is to observe all or part of a procurement
process, to provide related feedback on fairness issues to the project team and to PWGSC's
Departmental Oversight Branch, and to provide an unbiased and impartial opinion on the fairness of the
observed procurement process.
c. The involvement of a fairness monitor in a procurement process in no way diminishes or absolves any
PWGSC official of their accountabilities or responsibilities. (See 3.135 Fairness Monitors for more
details.)
1.55 Commodity Management

(2010-01-11)
Commodity management is defined by a framework of governance and processes used to review, plan, acquire
and control the total life cycle activities of a distinct group of goods and/or services. Use of the commodity
management framework results in the award of Pre-competed Procurement Instrument(s), which should meet
operational requirements of government departments while providing the optimal cost of ownership and
disposal and achieving the best value for Canada. This is in keeping with Canada's commitment to deliver
services smarter, faster and at a reduced cost.
1.55.1 Overview of commodity management

(2015-09-24)
Commodity management provides the following:
a. A government-wide approach to managing commonly used goods and services that meet the operational
requirements of client departments and support their program and service objectives.
b. An effective "best practices" combination of:
i. market and demand/spend analysis,
ii. total life cycle and risk analysis,
iii. governance and consultation,
iv. strategic sourcing and procurement practices to achieve the best value and reduce total cost to
government through:
A. volume optimization,
B. purchase specification standardization and improvement,
C. supply base optimization,
D. purchasing process improvements and technology integration,
E. demand, maintenance and spares management,
F. best value evaluation,
v. change management and training to improve client procurement process management,
vi. contract management including performance measurement and tracking.
c. Attention to these elements is done in the context of current procurement values and ethics of
transparency, equity and openness as well as government socio-economic, sustainable development and
environmental "green" improvement objective.
1.55.5 Goals and Benefits of Commodity Management

(2010-01-11)
a. Some of the goals of commodity management are:
i. to establish performance measures, to assess what, how and at what cost the government procures
goods and services, thereby facilitating a successful continuous improvement program;
ii. to identify risk factors to government operations and mitigation strategies to manage those risks
(e.g. strengths, weaknesses, opportunities and threats);
iii. to collaborate with client departments through inter-departmental commodity teams, resulting in
the commitment to use government-wide procurement instruments, and
iv. to achieve best value for Canada, including lowest overall cost and ability to support socio-
economic objectives, sustainable development and aboriginal objectives.
b. Some of the benefits of commodity management are:
i. improved transparency, accountability and responsibility for procurement across the federal
government;
ii. a simplified process that ensures efficient delivery of goods and services;
iii. ability to better understand, define and meet operational requirements for a full range of
government programs, through close collaboration with client departments;
iv. stronger relationships with the supplier community and the use of procurement processes, leading
to the selection of top-performing contractors and to obtain high-quality goods and/or services at
best value, and
v. more effective and pro-active contract management strategies and implementation plans.
1.55.10 Pre-competed Procurement Instruments

(2010-01-11)
a. Pre-competed Procurement Instruments (PCPIs), also known as Consolidated Procurements

Instruments, can result in, but are not limited to, standing offers, supply arrangements, task
authorization contracts, or government-wide contracts resulting from the commodity management
processes and are put in place between Canada and one or more suppliers for the provision of a specific
commodity over a specified period of time.
b. Departments and agencies should always consider use of these procurement instruments as the first
method of supply of goods and services. There are both mandatory and non-mandatory PCPIs. In 2005,
Treasury Board distributed a letter to departments and agencies for mandatory use of standing offers and
supply arrangements for 10 ARCHIVED - commodity categories (http://www.tbs-
sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/2005/04-eng.asp) . Further details on the different methods of supply can
be found in Chapter 3 Procurement Strategy and Chapter 4 Solicitation Process.

(2012-01-18)
1.60.1 Green Procurement Policy

(2013-09-25)
a. The Policy on Green Procurement (http://www.tpsgc-pwgsc.gc.ca/ecologisation-greening/achats-procurement/politique-

policy-eng.html) was introduced through the ARCHIVED - TB Contracting Policy Notice 2006-1
(http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/ContPolNotices/2006/01_e.asp) , and came into effect on April 1, 2006.
The objective of the policy is to advance the protection of the environment and to support sustainable
development by integrating environmental performance considerations into the procurement decision-
making process.
b. The Policy is set within the context of "value for money" and a life cycle management approach. The
Policy requires that departments integrate environmental performance considerations, as a key factor in
procurement decisions that occur throughout the life cycle of assets and acquired services. Departments
are also required to establish green procurement targets and monitor and report on their green
procurement performance through the annual Report on Plans and Priorities and the Departmental
Performance Report; or, if applicable, in the Sustainable Development Strategy section of the
ARCHIVED - Departmental Performance Report (http://www.tbs-sct.gc.ca/dpr-rmr/2010-2011/index-eng.asp?
acr=1908) . This Policy applies to all departments and agencies.
c. The Policy is described in further detail in 2.20 Green Procurement and Defining the Requirement and
3.65 Green Procurement Strategy.
d. The implementation of the Policy in Acquisitions Branch is managed by the Green Procurement Team,
within the Procurement Strategy and Performance Management Directorate (PSPMD). Contracting
officers can contact the Green Procurement team by visiting the Contact Green Procurement page.
e. Contracting officers are required to:
i. take the on-line course Green Procurement (C215) (http://www.csps-

efpc.gc.ca/forlearners/coursesandprograms/CourseDetail-eng.aspx?courseno=c215e) available through the Canada
School of Public Service;
ii. incorporate environmental considerations into the commodity management process for all
procurement instruments, if applicable;
iii. advise all clients of the Green Procurement Policy and support them, using the information, tools
and guidance available, to meet both the client needs and policy requirements; and
iv. record in procurement files and in contract approval documents that environmentally preferable
goods or services have been considered.
1.60.5 Office of Greening Government Operations

(2010-01-11)
The Office of Greening Government Operations (http://www.tpsgc-pwgsc.gc.ca/ecologisation-greening/index-eng.html)

(OGGO) was created in April 2005 within Public Works and Government Services Canada (PWGSC). OGGO's
mandate is to accelerate the greening of the government's operations by working with other federal departments,
particularly Treasury Board Secretariat and Environment Canada. OGGO works in conjunction with the Green
Procurement Team in Acquisitions Branch (AB), to establish procedures to enhance green procurement within
AB and throughout the government.
1.65 Policy on government security

(2017-04-27)
a. The objective of the Policy on Government Security (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=16578) , as it

pertains to contracting, is to ensure that sensitive information and assets of the government are properly
protected when entrusted to industry. The role of Public Works and Government Services Canada
(PWGSC) in this process is to ensure that individuals and organizations that will have access to or will
possess sensitive information and assets have first received the necessary security screening or clearance
through the Canadian Industrial Security Directorate (CISD), PWGSC.
b. PWGSC's Industrial Security Sector (ISS) is the lead in the public service to administer the Contract
Security Program (CSP). The CSP is intended to ensure protection of Canadian and foreign government
sensitive assets/information entrusted to industry for contracts administered by PWGSC and, on request,
for contracts administered by other government departments. PWGSC’s CISD is responsible to security
screen private sector organizations and personnel requiring access to sensitive government information
and assets. The Program also identifies the appropriate security terms and conditions to be included in
each contract and ensures that contractors comply with the security requirements provided by the client
department for safeguarding, disclosing, destroying, removing, modifying and interruption of
government sensitive information/assets.
c. As of April 1, 2011, the CSP is under a cost recovery regime. It will cost recover from federal
departments and agencies for contract-related security services it provides.
d. The current approved charging model is an allocation model based on the proportion of all contracts
with security provisions accounted for by each client organization. An historic rolling average is
calculated over a two-year period commencing three years prior to the year for which they are being
charged (e.g. for the fiscal year 2012-2013, the reference period is 2010-2011 and 2011-2012). A
weighting factor is used to equalize contract complexity.
e. The total CSP budgeted costs are then allocated to the client organizations based on their pro-rated share
as calculated above. The result is that a client department’s current year charge is based on the rolling
average of the last 2 fiscal years contract activity for that client department. There is a Memorandum of
Understanding (MOU) in place between PWGSC and each of the client departments describing the
services to be provided.
f. The project authority and the departmental security officer are responsible for ensuring that their
department adheres to the Policy and that provisions are made for any suppliers used to provide goods
or services to ensure that they also meet the applicable security requirements.
g. CISD is responsible for the following services:
i. provide the appropriate security clauses to be inserted into solicitation and contractual documents,
as required, when a Security Requirements Check List (SRCL) has been used to identify the
needs;
ii. provide appropriate security clearance to any companies that are awarded sensitive contracts in
order to meet the security requirements and ensure that they maintain their security clearance
during the period of the contract;
iii. ensure that inspections are undertaken and regularly renewed at the company facilities if required;
and
iv. carry out the security screening of the contractor's personnel as required by the provisions of the
contract.
Note that contracts may still have a security requirement, even though the contractual documents
themselves are not designated as PROTECTED/CLASSIFIED.
h. Upon request, CISD also handles the security requirements of contracts awarded by other government
departments under their own contracting authority;
i. The Policy is issued by Treasury Board under the authority derived from government decision and
section 7 of the Financial Administration Act.
j. Each federal department is responsible for protecting sensitive information and assets under its control
not only in its own operations but also throughout the bidding, negotiating, awarding, carrying out, and
terminating of any contracts it manages. In contracting, the SRCL is used by PWGSC and client
departments to define their security requirements in a contract. See 2.50 Industrial Security
Requirements, 3.55 Industrial Security Requirements (Personnel or Organization)and 7.55 Industrial
Security Requirements for more information on security.
Note: The Canadian Industrial Security Directorate will not do a risk assessment; it will provide the
results of their screening to the contracting officers/client departments, which will make the proper
decision concerning the contracts. CISD will not approve/disapprove the decision. It is not its role.
1.70 Privacy in Contracting

(2010-08-16)
a. Effective April 1, 2008, TB released a Policy on Privacy Protection (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?

id=12510&section=text) . Canadians value their privacy and the protection of their personal information.
They expect government institutions to respect the spirit and requirements of the Privacy Act. This
policy must be read in conjunction with the Policy Framework for Information and Technology
(http://www.tbs-sct.gc.ca/pubs_pol/ciopubs/TB_IT/pfit-csit_e.asp) and the Policy on Access to Information
(http://www.tbs-sct.gc.ca/pubs_pol/gospubs/TBM_121/CHAP1_1_e.asp) . Additional mandatory privacy-related
requirements are set out in the ARCHIVED - Privacy Impact Assessment Policy (http://www.tbs-
sct.gc.ca/pubs_pol/ciopubs/pia-pefr/paip-pefr_e.asp) .
b. The Policy on Privacy Protection applies to government institutions as defined in section 3 of the
Privacy Act (the Act), including parent Crown corporations and any wholly owned subsidiary of these
corporations. It does not apply to the Bank of Canada and to the information excluded under the Act.
c. The Government of Canada is committed to protecting the privacy of individuals with respect to the
personal information that is under the control of government institutions. The government recognizes
that this protection is an essential element in maintaining public trust in government. The Supreme
Court of Canada has characterized the Act as "quasi-constitutional" because of the role privacy plays in
the preservation of a free and democratic society.
d. Privacy protection in this sense means limiting government interventions into the private lives of
Canadians to lawful and necessary purposes. It also means that government must ensure a high standard
of care for personal information under the control of government institutions. The government also has
to respond to requests for access to personal information. Sound information management plays a key
role in facilitating the exercise of access rights under the Act and ensuring privacy protection.
e. Through government contracts, contracting authorities, clients and other departmental organizations are
privy to individual and company private information. It is imperative that precautions are taken in
contracting to safeguard this information. Some examples include such things as individual resumes that
contain very personal information and secondly company private information that in the wrong hands
may provide competing companies technical advantages, trade secrets or financial information.
f. PWGSC must ensure safeguards are put in place to protect individual and company private information
by ensuring information is stored securely and that information is handled through limited distribution
and provided only as necessary. Under no circumstances should a company's private information or an
individual's personal information be shared with competitors or placed in the public domain without the
written authorization of the originator of the information.
g. Contracting officers should review the Guidance Document: Taking Privacy Into Account Before
Making Contacting Decisions (http://www.tbs-sct.gc.ca/pubs_pol/gospubs/TBM_128/gd-do/gd-do-eng.asp) whenever
personal information about Canadians is to be handled or accessed by private sector suppliers or
agencies under contract.
Annex 1.1: Matrix of Responsibilities

(2012-04-13)
Annex 1.1.1: Matrix of responsibilities between Public Works and Government Services
Canada and client departments for the procurement of goods and services (generic)
(2017-04-27)
INTRODUCTION
1. The following matrix provides a generic division of anticipated types of responsibilities between Public
Works and Government Services Canada (PWGSC) and client departments. It forms the basis for an
effective and efficient partnering relationship for those who are responsible for activities within the
contracting process.
2. The division of responsibilities as shown in the matrix represents a standard way of doing business.
However, as every procurement and associated contract differs, alternate divisions of roles and
responsibilities can be established in advance by way of a written agreement between PWGSC and the
client department. Such client department or procurement-specific arrangements or matrices will take
precedence over this generic matrix. Legislation, regulations and policy will also take precedence over
this matrix.
3. Regular communication between PWGSC and the client department is considered essential to success in
all activities, even for those activities where no contributing role is indicated within the matrix.
Note: The matrix does not represent a delegation of procurement authority by the Minister of PWGSC, and it
does not remove from contracting officers their overall contracting responsibilities.
L: Lead
C: Contributing
S: Shared
Generic matrix of responsibilities between PWGSC and client departments for the procurement of
goods and services
Responsibility
No. Activities
Client PWGSC
1 - Requirements Definition
1.1 Define client's operational requirements:

1.1.1 Define essential characteristics (i.e., Statement of Requirements) L C
1.1.2 Consider all feasible solutions to meet client's operational needs L C
1.1.3 Develop preliminary project cost estimates and schedule L
1.1.4 Conduct cost benefit analysis of alternatives (including life cycle costing L C
analysis)
1.1.5 Determine the total resource requirements and implications; for example, L
training, priority of allocation amongst operational needs and security
requirements
1.1.6 Obtain approval-in-principle to continue with project L
1.1.7 Develop Total Project Plan, including substantive cost estimates and L
schedules, special project management needs, project phasing, maintenance
support requirements, etc.
1.2 Define client's technical requirements:
1.2.1 Develop Statement of Work (SOW) and/or performance specifications or L
standards, as appropriate, for the goods/services required in order to meet the
operational needs.
1.2.2 Define the technical requirements for quality assurance, acceptance, L
warranty, training, documentation, packaging, transportation, initial
provisioning, etc.
1.3 Raise the requisition (form PWGSC-TPSGC 9200):
1.3.1 Prepare the funded requisition for goods/services to be forwarded to L C
PWGSC. Include the Security Requirements Check List (SRCL), with the
security clauses provided by CISD, and the Request for Private Sector
Organization Screening (PSOS) form, if applicable. Information on how to
obtain the PSOS form can be found in section 4.30.10 Industrial Security in
Contracts.
*It is important to note that the Canadian Border Services Agency has
unique security screening requirements. Refer to Annex 1.3: Canadian
Border Services Agency (CBSA) - Security Requirements when Public
Works and Government Services Canada (PWGSC) does the procurement.
2 - PWGSC Procurement Plan
2.1 Assess potential sources of supply (Canadian vs. offshore, etc.) C L

2.2 Identify applicable major contracting policy issues/ considerations, which C L
must be resolved to accomplish the procurement.
2.3 Examine potential problems in relation to patents, licencing, royalties and C L
technology transfer.
2.4 Develop Procurement Plan including:
2.4.1 Delivery schedule and acceptance requirement L C
2.4.2 Contracting approach (including sourcing strategy) C L
2.4.3 Target cost and cash flow plan C L
2.4.4 Statement of appropriate quality and inspection system standards and L C

qualification approvals
2.4.5 Communications strategy C L
2.4.6 Contractual risk management C L
2.4.7 Evaluation methodology and selection method C L
2.4.8 Industrial Benefits (IBs), where appropriate C L
2.4.9 Interdepartmental and international agreements related to procurement plan L C
2.5 Obtain Procurement Plan approval. L
3 - Contracting Process
3.1 Prepare the translation of procurement documents (the client is responsible C L

for the translation of the SOW and/or performance specifications or
standards and technical evaluation criteria)
3.2 Prepare and distribute/post procurement notice on GETS (Government L
Electronic Tendering Service) and the bid solicitation package.
3.3 Prepare and distribute technical data packages, as required. L C
3.4 Receipt of bids on bid closing. L
3.5 Evaluate technical elements of bids. L C
3.6 Evaluate time, cost and other contractual elements of bids. L
3.7 Prepare consolidated evaluation and selection of the bidder. C L
3.8 Negotiate the contract, where applicable. C L
3.9 Obtain the contract approval. C L
3.10 Prepare and issue the contract. L
3.11 Debrief unsuccessful bidders. C L
4 - Contract Administration
4.1 General:
4.1.1 Monitor work of the contractor; and receive the contract deliverables. L C
4.1.2 Monitor the cash flow. L C
4.1.3 Report any problems to the contracting authority. L
4.1.4 Resolve any contractual problems. C L
4.1.5 Monitor compliance with the terms and conditions of the contract. S S
4.1.6 Determine that goods and services received are in accordance with the L C
requirement.
4.1.7 Determine that goods and services received are in accordance with the C L
contract.
4.1.8 Process the claims for payment. L C

4.2 Contract Amendements:
4.2.1 Identify the need for additional work or revisions; confirm the funding. L
4.2.2 Confirm that the contract amendment is the appropriate vehicle. L
4.2.3 Negotiate the contract amendment. C L
4.2.4 Obtain an approval for amendment/change order. L
4.2.5 Prepare and issue the contract amendment. L
5 - Contract Close-out
5.1 Settle the outstanding claims for payment. C L

5.2 Issue the contract closing amendment. L
5.3 Finalize the disposition of Crown assets. L
Annex 1.1.2: Specific Division of Responsibilities Agreements

(2010-01-11)
Section A 1.1.2.1: Division of Responsibilities between Public Works and Government

Services Canada (PWGSC) and Department of National Defence (DND) for the
Acquisition of Goods and Services
(2010-01-11)
1. This matrix is an assigned division of responsibility, agreed by the Ministers of the Department of
National Defence (DND) and Public Works and Government Services Canada (PWGSC)1. It forms the
foundation for an efficient and effective partnering relationship for those who are responsible for
activities within the procurement process.
2. This matrix is to be used for all DND goods and services procured by PWGSC. An "X" represents the
assignment of each activity to a "Lead" and "Participatory" department. An "M" represents the norm for
major crown projects (MCP) and like projects.
3. The assignment of each activity to a "Lead" and "Participatory" department as indicated in this matrix is
to be considered the normal way of doing business. However, as every procurement and associated
contract differs with respect to complexity, risk, value and availability of skilled resources, deviations
can be agreed jointly in advance as long as justifications are formally filed in an agreement between the
two departments, which consider reasons why the norm cannot be applicable in specific areas.
4. In all activities, it is incumbent upon each "Lead" department to always consider as prudent, continuous
communication with the procurement representatives of the other department, even if this "Lead"
department is identified as the sole "X". Finally, it is important to note that this matrix of assigned
responsibilities is not necessarily sequential.
5. Effective communications between DND and PWGSC must be worked out on a project-by-project
basis. The matrix below sets out anticipated DND internal responsibilities. For any individual project,
DND requests that communications be through the procurement functional contact, the applicable DND
Procurement Manager/Officer, unless otherwise discussed and agreed to with that procurement
functional contact.
DND/PWGSC Responsibility Matrix
DETAIL RESPONSIBILITY
PO (Procurement Officer)
PM (Project Manager)
TA (Technical Authority - includes
LCMM)
CODE PD (Project Director) PWGSC DND
M (denotes for MCP or MCP-like PWGSC DND Normally Normally
projects where role is defined in the Participates Participates
PMP)
PM/TA - usually the PM for Capital/NP
project procurement and the TA for in-
service procurement
1 - DEFINE DND OPERATIONAL REQUIREMENTS
1.1 Define essential characteristics - PD

Statement of Capability Deficiency or
Statement of Requirement
1.2 Seek procurement input/ advice from PO
DND procurement authority
1.3 Delineate all feasible solutions, within PD M
government policy, to meet operational
needs (ROM costs)
1.4 Identify Total ROM project cost and PO
schedule estimates for SSID
1.5 Obtain operational approval to continue PD
with project (SSID)
1.6 Preparation of cost benefit analysis PD
including life cycle costing analysis of
alternatives and uncertainties
1.7 Determine requirement for cooperation & PD
involvement of other
Departments/Countries (excluding 3.5.9)
1.8 Determine national and international PD
obligations applicable to operational need
1.9 Determine requirement for phased cycles PM X
for project implementation

1.10 Determine maintenance and support PM/TA X
requirements
1.11 Determine total resource requirement for PM X
the project
1.12 Identify Total Project cost (substantive)
and schedule estimates
1.12.1 Obtain and collate cost and schedule PD/PO X
information
1.12.2 Develop Total Project cost and schedule PO
estimates
1.13 Initiate a PMP (formerly PIP) for project PM X
(Responsibility Assignment Matrix)
1.14 Develop DND's Procurement Master Plan PO
1.15 Obtain approval (SRB and PRC/SPAC) PM X
1.16 Prepare project submission and obtain PD/PM
approval (PMB, SS PPA and SS EPA, and & PO
Project Briefs)
1.17 Prepare Memorandum to Cabinet (for M M
MCP's only)
1.18 Execute DND's Procurement Master Plan PO
2 - DEFINE TECHNICAL REQUIREMENTS AND RAISE PROCUREMENT INSTRUMENT
2.1 Establish team (formal or informal as PO X

appropriate) for an individual
procurement instrument, including
required stakeholder
2.2 Identify appropriate DND authorities in PO
the PI (e.g. requisition, technical, QA)
2.3 Statement of Work (SOW)
2.3.1 Define SOW and/or Performance PM/TA
Specifications in support of the
operational need
2.3.2 Identify Earned Value requirements (for M
MCP's or MCP-like projects)
2.3.3 Review and Refine SOW PO X
2.4 Define Government Furnished Resources PM/TA
(e.g. tools, test equipment)
2.5 Define Quality Assurance and PM/TA
Acceptance requirements
2.6 Define other technical requirements (e.g. PM/TA

warranty, training, documentation, Initial
Provisioning, etc.)
2.7 Define Technical Evaluation Criteria PM/TA
2.8 Prepare Procurement Instrument and
Associated Documents
2.8.1 Validate cost estimate and secure funding PO
for this PI
2.8.2 Develop Technical Bid Evaluation Plan PM/TA X
2.8.3 Establish Technical Bid Evaluation Team PM/TA X
2.8.4 Develop proposed procurement schedule PM/TA
(activities and timeline) for this PI
2.8.5 Identify and mitigate DND risks PO
associated with this PI
2.8.6 Develop Content of Procurement PO
Instrument
2.8.7 Review Draft Procurement Instrument PO X
2.9 Approve Procurement Instrument PO
(Requisition)
3 - DEVELOP PWGSC PROCUREMENT PLAN (*based on DND Procurement Instrument)
3.1 Assess the industrial capability* X

3.2 Identify applicable major contracting X
policy which must be considered to
accomplish procurement*
3.3 Review applicable CITT cases and X PO
Federal Court Rulings of Procurement
3.4 Examine potential problems in relation to X PM/TA
patents, licensing, royalties, and
technology transfer
3.5 Develop Procurement Plan including:
3.5.1 Delivery schedule and acceptance PO X
requirement
3.5.2 Contracting approach* X
3.5.3 Target cost and cash flow plan PO
3.5.4 Stating of appropriate quality control and PM/TA
inspection system standards and
qualification approvals
3.5.5 Communications Strategy (e.g. press X PM/TA
release, etc.)
3.5.6 Risk Management* X

3.5.7 Evaluation Methodology* X
3.5.8 Industrial and Regional Benefits X PM/TA
3.5.9 Interdepartmental and international PM/TA X
agreements related to Procurement Plan
(excluding DND/ PWGSC)
3.6 Obtain approval of procurement plan X
4 - CONTRACTING PROCESS
4.1 Review requisition or procurement X PO

instrument
4.2 Review SOW and Technical Evaluation X PO
Criteria for its contractibility
4.3 Prepare Solicitation Bid Package
4.3.1 Identify Applicable Terms and Conditions X PO
(including Basis of Payment)
4.3.2 Develop Contractual Evaluation Criteria X PO
(time, finance incl. transition, contractual
& consolidated evaluation plan)
4.3.3 State appropriate authorities (e.g. X
requisition, technical, contract, quality,
etc., as applicable)
4.4 Dispatch "Solicitation - Bid" (RFP/ITT) X
documentation to Industry and DND
4.5 Distribute technical data packages to PM/TA X
suppliers as required and as applicable
4.6 If competitive (RFP, ITT or equivalent
process), Evaluate Bids and Recommend
Supplier
4.6.1 Carry out Technical evaluation (SOW and PM/TA X
associated t's & c's) in accordance with
the Evaluation Plan
4.6.2 Carry out Contractual evaluation X M
(including contract t's & c's) in
accordance with the Evaluation Plan
4.6.3 Consolidate evaluation and recommend X PO
supplier
4.7 If sole-source, Negotiate contract X PO&PM/TA
4.8 Review draft contract documentation PO
4.9 Obtain TB or Departmental contract X M
approval, as required
5 - CONTRACT ADMINISTRATION
5.1 Initiate Contract Administration

5.1.1 Implement Tools and Processes for X PO
Administration
5.1.2 Kick-Off Meetings with Parties, X PO&PM/TA
Stakeholders
5.2 Provide Government Furnished PO X
Resources (GFR) in Support of Contract
Work
5.3 Ascertain Contract Performance
5.3.1 Technical and Quality of the Deliverables PM/TA
5.3.2 Contractor's Engineering, Production and PM/TA
Quality Systems
5.3.3 Contractor's Financial and Management X
Systems
5.3.4 Contract Cash Phasing/ Cash Flow
5.3.4.1 Cash Flow Actual versus Contracted Cash X M
Flow
5.3.4.2 Cash Flow Actual versus DND Planned PO
Cash Flow for Financial Forecast
5.3.4.3 Earned Value (monitor progress of work X M
versus planned work and associated cost)
for MCP's
5.3.5 Delivery
5.3.5.1 Monitor materiel and services delivery PO
date
5.3.5.2 Acceptance Trials and Tests PM/TA
5.3.5.3 Schedule compliance X M
5.3.6 Progress Review Meetings
5.3.6.1 Requirements/Technical Work Group PM/TA X
Meetings
5.3.6.2 Contract Progress Review Meetings with X PO&PM/TA
Contractor
5.4 Apply Contract Provisions and Processes
5.4.1 Interpretation and Notifications X
5.4.2 Change Control
5.4.2.1 Technical (Engineering Change PM/TA

Notices/Proposals)
5.4.2.2 Contract Amendments X PO
5.4.3 Warranty Provisions
5.4.3.1 Invoke Warranty PM/TA
5.4.3.2 Enforce Warranty X
5.4.4 Contractual Issues
5.4.4.1 Identify contractual issues X PO
5.4.4.2 Enforce contractual issues X
5.4.5 Accept Contract Deliverables PM/TA
5.4.6 Certify and Process Payments X PO
5.5 Close Out Contract
5.5.1 Crown Asset Disposition PO X
5.5.2 Final Contract Audit X
5.5.3 Final Payment and Amendment X PO
List of Acronyms:
CITT
Canadian International Trade Tribunal
DND
Department of National Defence
GFR
Government Furnished Resources
ITT
Invitation to Tender
LCMM
Life Cycle Material Manager
MCP
Major Crown Project
NP
National Procurement
PI
Procurement Instrument
PIP
Project Implementation Plan
PMB
Program Management Board
PMP
Project Management Plan
PRC
Procurement Review Committee
PWGSC
Public Works and Government Services Canada
RFP
Request for Proposal
ROM
Rough Order of Magnitude
SOW
Statement of Work
SPAC
Senior Project Advisory Committee
SRB
Senior Review Board
SS(ID)
Synopsis Sheet (Identification)
SS(EPA)
Synopsis Sheet (Effective Project Approval)
SS(PPA)
Synopsis Sheet (Preliminary Project Assessment)
TB
Treasury Board
Section B 1.1.2.2: Division of Responsibilities between PWGSC and DND for the Quality
Assurance of Materiel and Services
(2010-01-11)
1. Public Works and Government Services Canada (PWGSC) and the Department of National Defence
(DND) agreed in principle to a division of responsibilities between the two departments for the quality
assurance of materiel and services acquired on behalf of DND. This agreement will be amended, if and
when required, only with the consent of both departments.
2. This agreement identifies the division of responsibilities as agreed by each department for the quality
assurance of materiel and services, as it applies to military specifications, acquired on behalf of DND.
It does not deal with materiel and services to non-military specifications (see Section A: Division of
Responsibilities between PWGSC and DND for the Acquisition of Goods and Services) or with the
division of responsibilities for materiel and services managed by an interdepartmental project
management office, which are the subject of a separate agreement.
Materiel and services to military specifications: Includes all materiel and services, including repair and
overhaul, as well as research and development for which a military or other DND specification or
requirement is included in procurement documents. Also included in this category are materiel and
services which are not covered by DND or military specifications but which are of sufficiently
significant concern to DND as to require the division of responsibilities annotated under this heading.
3. PWGSC will also participate with DND in identifying the application and use of quality assurance
techniques at the earliest possible stage in the product life cycle and the development and
implementation of cost-effective quality assurance support programs.
4. DND will be solely responsible for the designation of materiel and services as "Military" or "Non-
Military" in technical and procurement documentation.
5. The division of responsibilities identified for a subactivity does not mean exclusive involvement by one
department. Close participation and coordination by both departments is essential throughout the
various phases of the procurement program.
Where participation by the other department is indicated, the responsible department is expected to
initiate the consultation. However, it does not preclude either department from requesting participation
in, or consultation on, any given subactivity relative to an established program.
Materiel and Services for Military Specifications
Sub-activity Description
A. Definition of Requirements- DND assigned overall responsibility
Quality assurance services which support achievement of the quality of design, its practicality for
manufacture and the means by which conformance will be demonstrated. The tasks involve participation
in:
A.1
The evaluation with DND of technical data for completeness, clarity, freedom from irrational or
excessive tolerances, contradictions, over stipulation of quality requirements, ability to meet
interface requirement, etc.
A.2
Review of design to determine completeness of definition, the methods for demonstrating
conformance and analysis of system effectiveness of such major elements as:
a. Safety
b. Maintainability
c. Reliability
d. Performance
e. Human Engineering
f. Interchangeability
g. Configuration Control.
A.3
Establishment and definition of test methods with respect to practicality, suitability and cost as
related to:
a. Qualification Approval
b. Design Approval Model (Prototype)
c. Production Unit Conformance
d. Acceptance Trials.
Responsibility for Sub-activity- DND

Normally Participates in Sub-activity- PWGSC
A.4
Applicability of technical data to current programs of maintenance, repair and overhaul and
reprovisioning.
A.5
Selection of parts, components or process, with avoidance of those which are difficult to control,
subject to excessive variation or high failure rate, etc.
A.6
Classification of quality characteristics with respect to their importance to design objectives.
A.7
Designation of quality control and inspection system standards.
A.8
Definition of preferred warranty requirements.
A.9
Establishment of requirements for technical reports from suppliers.
B. Quality Assurance Support Programs- DND assigned overall responsibility

Develop, support and maintain programs conducive to efficient procurement and quality assurance
which includes such tasks as:
B.1
Development as appropriate of contractor quality system standards/specifications for contract
use.
B.2
Maintenance of qualified/approved product programs.
B.3
Evaluation of the acceptability of suppliers' quality control/inspection systems, commercial test,
laboratory and calibration facilities.
B.4
Selection of suppliers with acceptable quality control/inspection systems, commercial test,
laboratory and calibration facilities.
Responsibility for Sub-activity- PWGSC

Normally Participates in Sub-activity- DND
C. Requisitioning- DND assigned overall responsibility

Quality assurance tasks associated with requisitioning (contract demands, local purchase orders).
C.1
Review of the requisition with DND for applicability of the technical data.
C.2
Development of Quality Assurance Plan.
C.3
Assurance that workmanship standards are established.
C.4
Determine which contractor quality control/inspection requirements are applicable.
C.5
a. Designation of the Quality Assurance Authority, and

b. Designation of government quality assurance at source or inspection at destination.
C.6
Develop and include special clauses of significance to the assurance of quality.
D. Preparation of Bid Solicitation- PWGSC assigned overall responsibility

Quality assurance tasks associated with the preparation of bid solicitations.
D.1
Review of quality requirements on the requisition for completeness and clarity.
D.2
Establishment of criteria for the evaluation of bids/proposals for compliance with quality
requirements.
D.3
Review of past performance of potential bidders in respect of their quality history, to determine
potential suppliers.
D.4
Explanation of quality requirements at the prebidders' conference.
E. Bid Evaluation and Supplier Selection -PWGSC assigned overall responsibility

Quality assurance tasks associated with evaluation and supplier selection in relation to:
E.1
Evaluation of bidders' quality capabilities based upon their quality history and pre-award survey
of their quality control/inspection systems.
E.2
Evaluation with DND of the quality/quality assurance implications of selecting alternative
products.
E.3
Trade-off analysis of performance cost and schedule.
F. Contract Preparation and Final Award- PWGSC assigned overall responsibility

Quality assurance tasks associated with contract preparation and final award in relation to:
F.1
Resolution of negotiations with contractor on quality-cost matter not finalized at the bid
evaluation stages and review of contract quality requirements to ensure mutual understanding
F.2
Verification with DND that the contract includes the required quality system requirements.
G. Contract Administration- PWGSC assigned overall responsibility

Performance of the following activities in support of PWGSC contract administration throughout the
duration of the contract, as applicable:
G.1
Quality Assurance Verification of the continuing effectiveness of the contractor's methods for
controlling his product quality. These elements are:
a. Management control system review

b. Planning
c. Quality Assurance documentation
d. Corrective action
e. Design, development, control and engineering features
f. Documentation control and change

g. Control of inspection, measuring and test equipment
h. Control of contractor purchased materiel
i. Manufacturing and process control
j. Purchased and/or supplied materiel standards and specifications
k. In-process and final inspection and test
l. Sampling procedures
m. Control of non-conforming materiel
n. Inspection status
o. Handling, storage and packing.
G.2
a. Verification of the conformance of preproduction or first-off unit.

b. Periodic sampling as appropriate during production to ascertain conformance to
specifications.
c. Timely reporting to PWGSC in the event of deviations from specifications.
d. Verify acceptability of product and authorize release to consignee.
G.3
Quality assurance action in technical change procedures such as initiation, and recommendation.
G.4
Review of contract quality requirement with contractor to ensure mutual understanding.
H. Contract Close out and Clean-up- PWGSC assigned overall responsibility

Quality assurance tasks performed during contract close-out and clean-up:
H.1
Verification from DND of the condition and disposition of Crown-owned production tooling,
inspection and test equipment
H.2
Verification from DND of the completeness, suitability and proper disposition of technical data
and documentation.
I. Post-delivery Appraisals- DND assigned overall responsibility

Quality assurance tasks arising during the life of the product in relation to:
I.1
Quality History
a. Accumulation and assessment of quality assurance histories for the purpose of

recommending need for modification of product technical data, quality assurance
standards, or quality assurance plans for the product, based on quality data acquired from
the following:
i. Product Qualification
ii. Supplier Evaluation
iii. Bid Evaluation
iv. Product Quality Assurance
v. Post-delivery Appraisal.
I.2
Unsatisfactory Condition Report/Complaints
a. Review of failure reports where the complaint has been associated with quality defects.
b. Analysis and identification of cause.
c. Seeking of corrective action with contractor or through PWGSC. In all instances, DND
should notify PWGSC immediately in writing.

Normally Participates in Sub-activity - PWGSC
J. Disposal- DND assigned overall responsibility

Quality assurance tasks related to the disposal of equipment and data.
K. Warehousing and Distribution- DND assigned overall responsibility

Quality assurance tasks associated with the development of a quality program which, will assure
product quality on receipt, during storage and on issue, including such elements as:
K.1 Preparation of Inspection Plans, including inspection on receipt, during storage, on issue
and after repair.
K.2 Control of technical data.
K.3 Control of adequacy of inspection equipment.
K.4 Incoming inspection.
K.5 Identification of defective material.
K.6 Procedures for material handling.
K.7 Packaging and shipping.
K.8 Inspection records.
K.9 Quality audit.
K.10 Corrective action.

Responsibility for Sub-activity– DND
1 The matrix does not represent delegation of procurement authority by the Minister of PWGSC, and does not
affect the responsibility of the contracting officer as defined in Treasury Board Contracting Policy.
Legislation, regulations and policy will take precedence over this matrix in the case of any ambiguity.
Annex 1.2: Memorandum of understanding between the Royal Canadian Mounted Police
and the Canadian Industrial Security Directorate
(2017-04-27)
The Memorandum of Understanding between the Royal Canadian Mounted Police and the Canadian Industrial
Security Directorate has expired and was removed from the Supply Manual.
For reference purpose only, Annex 1.2 is available in the Supply Manual Archive
(http://www.gcpedia.gc.ca/wiki/Supply_Manual_Archive) , Version 2016-2.
Annex 1.3: Canadian Border Services Agency (CBSA) - Security Requirements when
Public Works and Government Services Canada (PWGSC) does the procurement
(2013-01-28)
a. IMPORTANT: CBSA has its own unique security requirements. The client will conduct its own
personnel Reliability Status assessment on the proposed contractor and its personnel** as per the
Treasury Board Secretariat of Canada’s (TBS) Security and Contracting Management Standard
(http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12332) and the ARCHIVED - Policy on Government Security –
Personnel Security Standard (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12330) , irrespective of whether such
assessment has already been conducted under any such policies. The Reliability Status assessment
conducted by the CBSA will include a credit check performed by an authorized security official with the
CBSA’s Personnel Security Screening Section (PSSS), which is independent of PWGSC's Canadian
Industrial Security Directorate (CISD) and the International Industrial Security Directorate (IISD).
**In some instances, "contractor and its personnel" can include landlords, property management
employees and principles of companies when the latter have access to the premises where the CBSA
designated or classified information/assets are kept.
b. For each proposed resource, the bidder must submit a completed signed original TBS/SCT 330-23E –
Personnel Screening Consent and Authorization Form upon request of the contracting authority prior to
contract award.
c. PWGSC Acquisitions Branch can use the following clauses when provided to them by CBSA. CISD
recognizes and is aware of the requirement to insert CBSA clauses, however, the usual CISD process
still applies for CBSA requirements which include the provision of a Security Requirements Check List
(SRCL) and CISD clauses. CISD will issue the organizational, personnel, and any necessary physical
security clearances required pursuant to the SRCL. Prior to contract award, assurance must continue to
be obtained from CISD.
Clause 1: Until the credit check and all other security screening processes required by this
Request for Proposal have been completed and the Contractor and its personnel is considered
suitable by the CBSA, no contract will be awarded and the recommended Contractor / Offeror
(specifically the Contractor / Offeror personnel) shall not be permitted access to Protected /
Classified information or assets, and further, shall not be permitted to enter sites where such
information or assets are kept.
Clause 2: In the event the Contractor / Offeror (specifically the Contractor / Offeror personnel)
does not pass the security screening process required by the CBSA, the said Contractor’s
proposal will be considered non-responsive and the next ranked bidder will be contacted. If only
one bid was obtained and the proposed bidder does not meet the security requirement, then, the
contracting officer will determine the next steps in order to ensure all requirements are met.
2 Chapter 2 - Defining the Requirement and Requisition Receipt

(2012-01-18)
2.1 Requirements Definition

(2014-09-25)
a. Defining the requirements of a procurement is the cornerstone of a successful procurement process. The
contracting officer must understand completely what he/she is about to procure. There are many aspects
to consider.
b. When defining the requirement, client departments must keep in mind not only the goods and services
needed, but also the legal framework regulating the goods and services being procured (see 1.15 The
Legal Framework of Contracting). Client departments can save significant time and money if there is a
clear and well-prepared description of what is required. Early involvement of Public Works and
Government Services Canada (PWGSC) contracting officers in the process can help achieve this.
c. Identifying the needs and carefully developing the requirements at the earliest stages of requirements
definition are the greatest contribution in obtaining the right good or service and best price, and can
minimize the need for changes later.
d. Requirements are best defined in a manner that allows competition and ensures best value. Contracting
officers may be able to suggest wording, which defines requirements in terms of operational
requirements rather than using brand names or proprietary technical specifications.
e. PWGSC can help client departments identify special requirements related to green procurement,
security, progress reports, special packaging, transportation, bonding, etc. that suppliers may need to
address in their bids.
f. The contracting officer and the client department must work together to ensure that all concerns are
addressed from the beginning of the process to receipt of the final deliverable.
g. Writing clear and concise contractual documents, using the right words and plain language, is the best
method to adopt, to obtain satisfaction and avoid disputes.
h. For more information on the requirements definition, consult the Statement of Work Guide (available on
GCpedia - Acquisitions Program Policy Suite - Procurement Process (http://www.gcpedia.gc.ca/wiki/AP_-
_Procurement_Process) ).
2.5 Project Approvals

(2010-08-16)
Government departments and agencies are guided in the management of projects by Treasury Board (TB)
Policies and Guidelines addressing ARCHIVED - Project Approval Policy (http://www.tbs-
sct.gc.ca/pubs_pol/dcgpubs/TBM_122/chap2-1_e.asp) and ARCHIVED - Project Management Policy (http://www.tbs-

sct.gc.ca/pubs_pol/dcgpubs/TBM_122/CHAPT2-2_e.asp) . For projects that require TB approval, consideration should be
given to requesting advance approval to enter into contract, along with the applicable project approval
submissions. Working closely with the client at the program development stage, advance approvals may be
possible, saving time and effort.
2.10 Special procurements

(2016-01-28)
A number of special procurements require a different approach when handling the requirement. On receipt of a
requisition relating to any of the following programs, the contracting officer should review Chapter 9 - Special
Procurements before proceeding further.
a. Real Property Contracting;
b. Purchases from CORCAN;
c. United States Foreign Military Sales;
d. Co-operative Logistics (COLOG) and Blanket Order Cases with the United States Department of
Defence;
e. Use of the Defence Production Revolving Fund and Loan Account;
f. Canadian Commercial Corporation;
g. Major Crown Projects;
h. Procurement Strategy for Aboriginal Business;
i. Comprehensive Land Claims Agreements;
j. Public – Private Partnership (P3) procurements.
2.15 Agreement with Other Governments Departments or Agencies

(2010-01-11)
It is the mandate of Public Works and Government Services Canada (PWGSC) to provide services to
departments, boards and agencies of the Government of Canada or to Crown Corporations. Section 16 of the
Public Works and Government Services Canada Act further allows PWGSC to make its services available with
the approval of the Governor in Council to any government, body or person in Canada, or elsewhere, if so
requested by them. This means that the Act permits PWGSC to obtain an order in council to allow it to provide
services, such as the procurement of goods and services, to entities that are not part of the Government of
Canada. Contracting officers must consult Legal Services when they receive such a request. An agreement must
be established between the entity, PWGSC and Legal Services to help with the preparation of the required order
in council.

(2012-07-16)
a. Canada has contractual, statutory and common-law obligations to consult and, where appropriate
accommodate, when Canada contemplates conduct that might adversely impact potential or established
aboriginal and treaty rights.
b. The common law duty to consult is based on judicial interpretation of Canada’s obligations in the
context of existing aboriginal and treaty rights, recognized and affirmed in section 35 of the Constitution
Act 1982.
c. All federal departments and agencies are required to comply with the legal duty to consult.
d. Whenever a procurement may impact on potential or established aboriginal and treaty rights:
i. It is the clients’ responsibility to comply with the legal duty to consult and, where appropriate,
accommodate when the proposed activity, to which the procurement relates, may adversely
impact on potential or established aboriginal or treaty rights. Proposed activities could be
approvals of natural resource development projects, land transactions, road construction, pipeline
routes, etc.
ii. Accommodation measures may include a range of possibilities, such as: adjusting an activity;
placing terms and conditions on approvals or authorizations; financial compensation; inclusion of
Aboriginal benefits as part of the procurement strategy, etc.
iii. The consultation process should take place prior to the client sending the requisition to Public
Works and Government Services Canada (PWGSC), as consultation and accommodation may
impact the procurement strategy as a whole, including the statement of work, procurement
process timeline, funding, approval level required and even the decision to proceed with the
proposed activity.
iv. The contracting officer should remind the client of its obligation to consult and accommodate and
encourage the client to undertake consultation with Aboriginal groups, where required.
v. If the client asks the contracting officer to be present during the consultation process, the
contracting officer may do so as an observer, or by limiting its role to providing information on
the proposed procurement process. The contracting officer should not get involved in any
negotiation of the procurement strategy.
e. For further information on consultation and accommodation, clients should refer to the Government of
Canada Updated Guidelines for Federal Officials to Fulfill the Duty to Consult (http://www.aadnc-
aandc.gc.ca/eng/1100100014664) .
f. Consultation-related queries can be sent to Aboriginal Affairs and Northern Development Canada at
cau-uca@aandc-aadnc.gc.ca.
g. Clients can also find more information by consulting the Aboriginal and Treaty Rights Information
System on the Aboriginal Affairs and Northern Development Canada’s website.
2.20 Green Procurement and Defining the Requirement

(2010-01-11)
a. The Government of Canada is committed to implementing the Policy on Green Procurement

(http://www.tpsgc-pwgsc.gc.ca/ecologisation-greening/achats-procurement/politique-policy-eng.html) . This is to ensure that
the government cost effectively procures, operates and disposes of its assets in a manner that protects
the environment and supports sustainable development objectives. This policy is all encompassing and
it applies across all four stages of the procurement process, from planning and acquisition through use
and disposal.
b. The contracting officer, in assisting a client with the needs definition process, should analyze with the
client what opportunities may exist to support their obligations, as well as their departmental targets
related to green procurement. A key consideration is whether it is actually necessary to make the new
purchase. Ultimately, avoiding a purchase will be the most environmentally preferable and economical
option.
c. Some key considerations in defining the requirement are to:
i. evaluate the need, utilization and scale of the procurement, and reduce the need if possible;
ii. determine that the quantity requested is appropriate and definitely will be used (the feasibility of
short term leasing, renting or sharing of the good should be investigated);
iii. inquire as to whether or not the requirement could be satisfied internally, through a different
division or section of the organization or through government surplus supplies;
iv. combine the requirement, if appropriate, with one or several other departments to take advantage
of economies of scale, to reduce packaging and to save other resources.
d. See Annex 2.2: Green Procurement: Environmental Factors and Evaluation Indicators for factors and
indicators that will aid the client in managing the resource, from planning to disposal.
e. More information can be found in the Environmental Awareness Tool Kit under the Green Procurement
Considerations in the Planning Phase, and in section 2, Planning and Identifying Requirements of the
Guideline for Integration of Environmental Performance Considerations in Federal Government
Procurement.
f. Planning and Identifying Requirements will provide help in terms of planning and identifying
environmental requirements to reduce or eliminate impacts on the environment.
g. The Green Procurement Tools Web site includes valuable information such as the Completed Green
Procurement Plans and the related templates, a list of green standing offers (SO), supply arrangements
(SA) and contracts and a repertoire of existing contracting language related to green procurement.
h. For commodities under the Commodity Management Policy, contracting officers must develop a green
procurement plan (http://www.tpsgc-pwgsc.gc.ca/app-acq/ae-gp/index-eng.html) , and procurements must be
conducted in accordance with this plan.
2.25 Requisitions subject to Comprehensive Land Claims Agreements

(2015-09-24)
Contracting officers who receive a requisition that may be subject to Comprehensive Land Claims Agreements
(CLCAs) must refer to 9.35 Comprehensive Land Claims Agreements (CLCAs) for information on the CLCA
obligations that have to be addressed during the procurement process.
2.26 Early Engagement with Clients, Suppliers and Public Works and Government
Services Canada (PWGSC) Contracting Officers
(2014-09-25)
Client departments are invited to engage with PWGSC contracting officers early in the process. This
engagement may focus on different topics and may include various levels of engagement. It may be long before
a signed requisition is received within PWGSC.
The early engagement with industry may also take many forms, such as issuing Letters of Interest (LOIs),
Requests for Information (RFIs), one-on-one consultations with suppliers, the holding of industry days, etc. By
engaging clients and suppliers through early and ongoing consultation and dialogue, contracting officers are
better situated to identify the various complexities and risks associated with a client’s requirement, enabling the
development of mitigation strategies. Acquiring the knowledge of the requirement and its related complexities
and risk better positions all stakeholders for a successful procurement that meets the client’s needs.
Various tools are available to facilitate this early engagement. Some are listed below:
The Acquisitions Program Policy Suite, which provides policy instruments on topics such as
engagement and communications, governance, socio-economic objectives, risk management, etc.
located on GCpedia on the Acquisitions Program Policy Suite
(http://www.gcpedia.gc.ca/wiki/Acquisitions_Program_Policy_Suite) page.
The Procurement Library, which includes the Complexity Assessment tools as well as copies of Risk
Assessments for Complexity Levels 1 through 3 inclusive in PDF format. The Procurement Library is
available to PWGSC Acquisitions Branch employees only, and is available on the shared drive.
The Procurement Nuggets, which provide quick references on various procurement issues, located on
GCpedia on the Procurement Information Nuggets
(http://www.gcpedia.gc.ca/wiki/Procurement_Information_Nuggets_-_APPD) tab of the Acquisitions Program Policy
Directorate (APPD) page.
2.30 Requisition Receipt

(2011-10-04)
a. Client departments must complete the Requisition for Goods and Services and Construction form
PWGSC-TPSGC 9200 , and submit it to a PWGSC Allocation Unit (AU). The client Requisition
Checklist PWGSC-TPSGC 195 is a tool that can assist client departments in completing the
requisition and in determining the required supporting documents.
b. Client departments must submit completed requisitions to the AU by e-mail, fax or mail, although e-
mail is the preferred format. Contracting officers who receive a requisition directly from the client must
forward it to the AU and inform the client department of the procedures to follow. The AU will
acknowledge receipt of a requisition to the client department within one business day for electronically
(e-mail) submitted requisitions, and within two business days for hard copy (fax/mail) submitted
requisitions. While processing the requisition, the AU will vet the requisition received against the
mandatory requirements and contact the client for any missing information as detailed in Requisition
Checklist PWGSC-TPSGC 195 . Only when all mandatory information is received, will the AU
allocate the requisition to the appropriate contracting area.
c. Within five business days of an acquisitions office's receipt of a requisition from an allocations unit, the
responsible contracting officer must advise the client department that he/she has been allocated the
requisition and provide the client department with his/her contact information.
2.30.1 Funding
(2010-08-16)
a. Clients are responsible for submitting accurate requisitions and are accountable for the estimate on the
requisition. The requisition approval must be in accordance with the client department's internal
delegation of authority. Requisitions must be funded in Canadian currency, including Goods and
Services Tax/Harmonized Sales Tax (GST/HST), and provide the information required on the PWGSC-
TPSGC 9200 form. (Note: Only government employees have access to this form). This includes
procurements to be made by PWGSC organizations located outside Canada.
b. The authorized requisitioning authority must sign the mandatory signature blocks on the requisition.
One signature block signifies that the funding is provided in accordance with Section 32 of the
Financial Administration Act. A procurement cannot be completed until proper funding has been
provided through the requisition approval process. The other mandatory signature block signifies that
the requisition is approved, the necessary approvals have been obtained, and the client request PWGSC
to acquire and provide the goods, and/or services, or construction as describe in the requisition.
2.30.5 Requisition Allocation within Public Works and Government Services Canada
(2011-05-16)
a. Client departments may direct their requisitions and price and availability (P&A) enquiries directly to
the Public Works and Government Services Canada ( PWGSC) office of their choice (Canada only).
b. When the client stipulates the PWGSC Allocations Unit of choice on the requisition, it will normally be
allocated to that office. The major exceptions are:
i. Restricted Commodities:
Restricted Commodities include: advertising, public opinion research, production of audio visual,
bulk buys for fuel and vehicles and United States Foreign Military Sales (U.S. FMS). Requisitions
will be allocated as follows:
A. when a requisition is for a Restricted Commodity, the requisition will be allocated to the
headquarters ( HQ) division/section responsible for that NATO Stock Number (NSN)
Goods and Services Identification Number (GSIN);
B. when there is more than one line item of a Restricted Commodity, the requisition will be
allocated to the HQ division/section responsible for the Restricted Commodity line item
with the highest value;
C. when the monetary value of the line items cannot be determined, the requisition will be
allocated to the HQ division/section responsible for the GSIN code of the first line item,
which represents a Restricted Commodity; and
D. when a requirement will be sole-sourced under the U.S. FMS Program, see Chapter 9 -
Special Procurements.
ii. Commodity Managers

Where a requisition relates to a specific commodity (i.e. monitors or printers) or to a specific
geographical client (i.e. Northwest Territories), PWGSC will customarily inform the client that
the requisition is being forwarded to the specific commodity management office that is able to
satisfy their request.
iii. Major Projects

If the requisition is part of a major project, it will be allocated to the office responsible for that
project.
c. When a client does not specify a preference, the following rules apply:
i. when there is only one consignee point, the requisition will be allocated to the PWGSC office
closest to the consignee within the same regional sector. If the closest PWGSC office is HQ, it
will be allocated in accordance with PWGSC HQ procedures;
ii. when a requisition originates in a region with more than one consignee in the same regional
sector, it will be allocated to an office designated by the regional director Acquisitions;
iii. when there are multiple consignee points within the same regional sector, and the consignee
points are not close to one PWGSC office, then the requisition will be allocated to an office
designated by the Regional Director, Acquisitions. When the multiple consignee points are all
close to the same PWGSC office, then the requisition will be allocated to that office;
iv. when consignees in two or more regional sectors appear on a single requisition, it will be
allocated to the PWGSC office closest to the originator of the requisition;
v. when there are multiple consignees where the closest PWGSC offices are in two or more regional
sectors, then the requisition will be allocated to the PWGSC office closest to the originator of the
requisition, based on the requisition number of the ordering office. If the closest PWGSC office is
HQ, then it will be allocated in accordance with PWGSC HQ procedures;
vi. requisitions sent to HQ will be allocated to the section responsible for the greatest value of line
items based on the line item NSN or GSIN; and
vii. if the value of the line items are equal, or otherwise cannot be determined, then the requisition
will be allocated to the office or division/section responsible for the GSIN code for the first line
item on the requisition (clients should be encouraged to enter NSN or GSIN by line item on their
requisition).
2.30.10 Allocation of Work by Complexity

(2014-09-25)
a. Each requisition undergoes an assessment to determine the Complexity Level of the procurement in
order to direct the requirement into the appropriate process stream (Complexity Level 1, 2, 3, 4 or 5)
and to allocate it to a contracting officer with the necessary skill set to handle the procurement.
b. The manager (or whomever assigns the work) is responsible for determining the complexity of a
requirement. Once this determination has been made, the selected Complexity Level must be
documented on file (dated and signed) and entered into the Automated Buyer Environment (ABE).
c. Should a requirement’s Complexity Level change during the course of the procurement, the decision to
change the Complexity Level must be discussed with the manager and annotated on file, explaining why
the change was necessary. Any change to the Complexity Level must also be updated within ABE.
d. The definitions of the various complexities can be found in the Glossary, and the characteristics of each
level are identified in Annex 2.4 Characteristics of Acquisitions Program Procurement Complexity
Levels.
2.30.15 Complexity Code

(2014-09-25)
a. The Workload Management function within the Automated Buyer Environment (ABE) must be used to
enter the complexity code when allocating the requisition to a contracting officer. This information is
used for reporting, making it essential that the complexity information be captured.
b. If the complexity code changes, the modification must be updated in ABE. The contracting officer must
allocate the file back to the workload manager, who then enters the appropriate code.
c. See Annex 2.5 Entering Complexity Code into the Automated Buyer Environment for further
instructions on how to assign or amend a complexity code in ABE and for examples of various
scenarios and how to code them.
2.30.20 Changes to the Complexity Level

(2011-10-04)
a. If, at anytime during the procurement process, the contracting officer believes that the procurement has
been streamed incorrectly or if new factors arise that affect the complexity level, the Manager, or
whomever assigned the work, is to be consulted to determine the appropriate level.
b. If it is determined that the procurement has been streamed incorrectly, the contracting officer is to send
the electronic file back to the Workload Manager where the Manager (or whomever assigns the work)
will re-assign the file using the revised Complexity Code. The procurement must then follow the new
process in accordance with the new complexity level.
2.35 Extract Files

(2010-08-16)
a. At times it is necessary to separate a client's requirement as it will be procured by two different

procurement groups. In this instance, the main contracting officer will create an extract file.
b. The main file holder (the original contracting officer) must:
i. procure items not extracted;
ii. control requisition funds;
iii. act as the coordinator for client enquiries;
iv. ensure that all procurement actions under extracted files are completed;
v. record commitments on extracted items;
vi. request additional funds from the client, if required;
vii. process all invoices for payment by the client, and
viii. close the file once the procurement is complete.
c. The extract file holder (the contracting officer who received the extract file) must:
i. procure the assigned items;
ii. request funds from the main file holder after the total funding requirement has been identified;
iii. ensure that funds have been allotted before contract award;
iv. obtain the contract number from the main file holder before contract award, if the procurement is
done outside of ABE, and
v. forward to the main file holder copies of all contracts and amendments issued against an extract
file, if the procurement is done outside of ABE.
2.35.1 Part Files

(2010-01-11)
When there is a need to prepare and issue more then one solicitation on a requisition main file or on an extract
file, then part files may be created for each solicitation required. When part files are created under an extract
file, the extract file will be treated, for record purposes, as though it were a main file.
2.40 Price and Availability Enquiries

(2010-01-11)
a. A price and availability ( P&A) enquiry is generally received from the client and handled in the same
manner as any requisition. A P&A enquiry is prepared and sent to suppliers to obtain information
concerning approximate prices and availability of specific goods or services. It is used when such
information is needed by PWGSC or by a client for program planning or budgetary purposes. A P&A
enquiry could be made directly to selected suppliers or it may be publicly posted on the Government
Electronic Tendering Service (GETS).
b. P&A enquiries sent to suppliers, or posted on the Government Electronic Tendering Service, must
clearly indicate that the request is not a bid solicitation and that there are no commitments with respect
to future purchases or contracts.
2.45 Requests for Information and Letters of Interest

(2010-01-11)
Clients may request or the contracting officer may propose that a Request for Information (RFI) or a Letter of
Interest (LOI) be issued to obtain feedback from industry, before finalizing the requirements definition or
procurement strategy. Additional information on the RFI/LOI process may be found in 4.5.5 Request for
Information or Letter of Interest.

(2013-01-28)
2.50.1 Security and requisitions

(2017-04-27)
a. All requisitions and requisition amendments for contracts, standing offers or supply arrangements that
contain a security requirement must include a Security Requirements Check List (SRCL) (form
TBS/SCT 350-103) (http://www.tbs-sct.gc.ca/tbsf-fsct/350-103-eng.asp) and associated security guides/documents
with the security clauses provided to the client by the Canadian Industrial Security Directorate (CISD).
Some clients have an agreement with CISD with separate instruction. Please refer to Annex 1.3
Canadian Border Services Agency (CBSA) - Security Requirements when Public Works and
Government Services Canada (PWGSC) does the procurement for requirements from CBSA.
b. The security section of all requisitions received by PWGSC on form PWGSC-TPSGC 9200 must be
completed by the client to indicate whether or not security provisions are included in the requirement.
c. Note that the financial systems of some departments are not yet equipped to print this section. In such a
case, contracting officers can accept the previous version of the requisition form PWGSC-TPSGC 9200
from clients as long as certification against the wording of the new security section is provided,
either by replicating the new security wording (see below) in the "Special Instructions" section of the
requisition, or by providing it as a separate document.
"Requisition No. __
Security: __
Does this requisition include security provisions?
( ) No ( ) Yes
If yes, is a Security Requirement Check List (SRCL) required?
( ) No ( ) Yes
If an SRCL is required, attach the properly completed and signed SRCL to this requisition. If an SRCL
is not required, but the requisition does include security provisions, explain why in the requisition.
The Undersigned certifies that this requisition, including any attached SRCL, accurately details the
security provisions of this requirement.
Signature (mandatory) __
Date __"
d. The contracting officer must ensure that the completed security certification is included on each
procurement file when the requisition lacks a properly completed security block.
2.50.5 Security Requirements Check List (SRCL)

(2017-11-28)
a. The client department may complete the SRCL, either electronically via the online security
requirements checklist (SRCL) service or in hard copy using the form Security Requirements Check
List (SRCL) (form TBS/SCT 350-103) (http://www.tbs-sct.gc.ca/tbsf-fsct/350-103-nf.pdf) (PDF, 383 KB) - (Help
on File Formats). To use the online service register online or contact the Contract Security Program
(http://www.tpsgc-pwgsc.gc.ca/esc-src/communiquer-contact-eng.html) .
b. The online service provided by the Canadian Industrial Security Directorate (CISD) allows client
departments to complete the SRCL form on the Internet in a secure environment using a Smart form,
which eliminates errors. With the online service, CISD can provide the security clauses to be included in
the solicitation documents before receiving the signed hard copy of the SRCL, which expedites the
process. Once CISD receives the E- SRCL, its turnaround time to provide the security clauses is
2 working days as opposed to 15 working days for the hard copy. The electronic process results in the
reduction or elimination of errors, in this way, it enables the production of clauses in a more timely
manner.
c. For further information, see 1.65 Policy on Government Security, 3.55 Industrial Security Requirements
(Personnel or Organization) and 4.30.10 Industrial Security in Contracts or contact CISD (http://www.tpsgc-
pwgsc.gc.ca/esc-src/index-eng.html) , being the organization responsible for security screenings and clearances
for PWGSC procurements.
d. Upon receiving the SRCL, which must be attached to any requisition submitted to PWGSC, CISD will
provide the client department with the appropriate security clauses to be used in the solicitation. In all
cases where clarification is required, CISD will contact the client department and the departmental
security officer as required. Security clauses provided for a similar solicitation should never be used
without the prior authorization of CISD.
2.55 Employer-Employee Relationships

(2010-08-16)
a. When contracting for the services of individuals, including temporary help, contracting officers should
carefully review the circumstances in order to avoid establishing an employer-employee relationship
which would be contrary to or in conflict with the Public Service Employment Act and common law
principles dealing with employer-employee relationships.
b. As per sections 4.1.9(e) (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text#sec4.1) and 16.3

Employer-employee relationships (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text#sec16.3) of the
Treasury Board Contracting Policy, contracting officers must ensure that an employer-employee
relationship will not result when contracting for the services of individuals.
c. Criteria for assessing an employer-employee relationship have been established by the Canada Revenue
Agency (CRA) and pertinent court rulings. For guidance, seek legal advice or consult the CRA
publication RC 4110, Employee or Self-Employed? (http://www.cra-arc.gc.ca/E/pub/tg/rc4110/) . If there is any
uncertainty, the contract should be signed at a level higher than the individual who would normally
approve the initial entry into the contract.
d. Legal advice should be sought where it is not feasible for contracting officers to determine whether a
contract is a contract for services or a contract of employment (i.e. employment status is not easily
identifiable). It is ultimately the responsibility of the contracting officer to ensure that contracts do not
create employer-employee relationships.
2.60 Requisition Review

(2011-10-04)
a. Contracting officers must review all requisitions for completeness in accordance with Annex 2.1
Requisition Review before procurement action can proceed.
b. Issues must be resolved through consultation between the client and the contracting officer. Example of
issues are as follows:
i. if a requirement is not clearly defined, then the client must be encouraged and helped to define the
objectives and the performance criteria to be met. The client must be encouraged to use generic or
performance specifications;
ii. any unreasonable delivery requirements or unrealistic delivery dates should be discussed;
iii. if the sole source justification provided by the client is inadequate, then the contracting officer
should seek further justification. If the request cannot be substantiated to the satisfaction of the
contracting officer, then the contracting officer must advise the client that the procurement will be
competed, and
iv. for justified sole source requirements, the contracting officer should work with the client to
develop responses to Annex 3.1 Treasury Board Questions for Sole Source. For more information
on this process, see 3.15 Non-competitive Contracting Process.

(2010-01-11)
Public Works and Government Services (PWGSC) is sometimes asked to process requirements when the
procurement process was initiated by client departments (e.g. sourcing, bidding, evaluation, selection). The
client department remains responsible for all of their actions, which may or may not be in compliance with TB
or PWGSC policies or applicable legislation. PWGSC will attempt to mitigate risks associated with such a
requirement; however, the client department will remain responsible even if PWGSC agrees to continue or
restart the procurement process. To reduce the risk of complaints and challenges associated with these
procurements, the following procedures must be followed:
a. Upon receipt of a requisition for a contract or contract amendment, where the client has already taken
certain steps in the procurement process, the contracting officer must alert the manager to the situation.
b. The contracting officer will review the procurement process already initiated by the client, to identify
any deviations from standard practice or policy. The contracting officer must develop a clear
understanding of all procurement-related activities that have been completed, including whether a
contract has been awarded or the supplier has been given the go-ahead to commence work. Where a
contract has been awarded, or the supplier authorized to proceed with the work, 2.75 Confirming Orders
and Contracts Involving Pre-contractual Work will apply.
c. In the event that some of the actions of the procurement process initiated by client departments do not
adhere to the established supply policy guidelines, PWGSC may have to restart the procurement
process. Whenever a contracting officer must act in a way not clearly set out in this Manual, integrity
and its supporting principles provide necessary guidance (see 1.10.5 Guiding Principles).
2.70 Ratification by Treasury Board

(2011-10-04)
For information on ratification by Treasury Board, please refer to section 6.30.1 Ratification by Treasury Board.
2.75 Confirming Orders

(2011-10-04)
a. PWGSC does not normally place contracts to confirm the actions of departments or agencies. The
practice of providing such service to client departments should be discouraged to the maximum extent
practical. However, it may be necessary for PWGSC to become involved because of its exclusive goods
procurement authority. PWGSC may have some value to add in processing confirming orders when the
work is complete.
b. Requests for confirming orders must be evaluated and processed on the basis of the circumstances
surrounding each instance. Where the request is the result of attempts to circumvent normal
procurement procedures, return of the request to the client department should be a prime consideration.
c. When the work has been completed, Legal Services will prepare a confirming order that will contain
only the information necessary to document the transaction, which includes the parties, the work
performed, the dates, the amount, a release and, if required, a transfer of intellectual property rights. The
appropriate director or higher authority, as determined by the contract value and non-competitive
contract approval authority limits, must approve the confirming orders processed by PWGSC.
d. The client department will remain liable for any complaints resulting from their actions.
e. For information on attaining approval for contracts involving pre-contractual work, see 6.30.10
Confirming Orders and Contracts Involving Pre-contractual Work.
Annex 2.1: Requisition Review

(2013-11-06)
1. Has the requisition been properly directed or allocated to the appropriate office?
2. Has the current version of the requisition form been used? (If the previous version is used, then the
proper security certification must be included.)
3. Is the requisition authorized properly, and does it contain the mandatory signatures in all signature
blocks on the requisition? The client must certify that:
a. pursuant to subsection 32(1) of the Financial Administration Act (FAA), funds are available;
b. the requisition is approved, the necessary approvals have been obtained, and the client requests
Public Works and Government Services Canada ( PWGSC) to acquire and provide the goods
and/or services, including construction, described; and
c. the requisition, including any attached Security Requirements Check List (SRCL) for which
clauses have already been provided to the client by the Canadian Industrial Security Directorate
(CISD), and, if applicable, the Request for Private Sector Organization Screening (PSOS) form,
accurately details the security provisions of the requirement. Information on how to obtain the
PSOS form can be found in section 4.30.10 Industrial Security in Contracts.
Note: Requisitions received via e-Purchasing or via the Universal ABE Interface (U ABE I)
electronic interfaces are deemed to have been properly authorized with all signatures pursuant to
the Financial Administration Act (FAA).
4. Does the estimated funding seem adequate?
5. Are the destination/consignee codes specified?
6. Have environmental performance considerations been addressed?
7. Is this requirement subject to the provisions of a Comprehensive Land Claims Agreement (see 9.35
Comprehensive Land Claims Agreements (CLCAs))?
8. Are invoicing instructions provided?
9. Are the financial codes identified?
10. Has the client indicated whether the requisition includes security provisions and whether a Security
Requirements Check List (SRCL) (http://www.tbs-sct.gc.ca/tbsf-fsct/350-103-eng.asp) is required? If no SRCL is
required but security provisions are included, this must be explained.
11. Is there support for a sole source or no-substitute request? Has the client provided responses to Annex
3.1: Treasury Board Questions for Sole Source?
12. Are delivery lead times and schedules realistic, or will special action be required to meet delivery
objectives?
13. What could be the consequences resulting from a late delivery, and is there a need for liquidated
damages provisions or other performance incentives?
14. Is the good or service adequately defined in the requisition, attached technical documentation or
statement of work?
15. Have appropriate standards, specifications or purchase descriptions been included? If not, can an
existing one be used; or
a. is there a need for the development of a new standard, specification or purchase description?
b. is the NATO Stock Number (http://www.nato.int/STRUCTUR/AC/135/ncs_guide/english/e_1-6-5.htm) or the

Goods and Services Identification Number (http://www.contractscanada.gc.ca/en/gsin-codes-e.html) ( GSIN)
of the products shown?
Note: Although clients must detail the GSIN in the requisition, due to trade agreement
implications, the contracting officer must ensure the GSIN is accurate as per the commodity codes
published on the Buy and Sell site.
16. Is a design change/deviation procedure specified?
17. Is the extent of required product quality management and assurance specified?
18. Is the inspection or quality assurance authority specified?
19. Does the requisition or attachments contain any clauses or conditions that conflict with any PWGSC or
government contracting policies and procedures (i.e. Standard Acquisition Clauses and Conditions
Manual (SACC) and Supply Manual)?
20. Does the nature of the work include work to Canadian specifications?
21. Does the requisition contain any form of predefined types of pricing basis?
22. Are evaluation criteria specified and are the mandatory requirements clear?
23. Is special production tooling or special test equipment required?
24. Is government-furnished equipment or government-supplied materiel specified?
25. Are there unrestricted rights to the use of technical data or are royalty payments involved?
26. Is a trade-in specified?
27. If radio-transmitting equipment must be acquired, has the client obtained radio frequency equipment
clearance from Industry Canada? Are there other special considerations of a similar nature?
28. If there are multiple items on the requisition, should any of these items be grouped together, or put in a
part or extract file?
29. Could repetitive items be bought on an annual basis through standing offers, supply arrangements,
phased delivery, task authorization, contracts with a call-up feature, or be included as contract options
for additional quantities?
30. Are items required available on a standing offer or a supply arrangement (or a mandatory standing
offer)?
31. Has the client department included instructions concerning the treatment of any intellectual property
that may result from the procurement?
32. Has the client department claimed and substantiated exemption from taxes or duties, by referring to a
certificate of exemption, or remission or drawback order in council?
33. Are controlled goods identified?
34. Has the client department identified the requirement as a "defence contract"as defined in the Defence
Production Act
35. Is the GSIN shown and accurate?
36. Is the block "Current Funding"completed? Does it include the Goods and Services Tax or the
Harmonized Sales Tax?
37. Does the requirement involve contractor's access to personal records?
38. Has the procurement been set aside under the Procurement Strategy for Aboriginal Business?
39. Are option/extension period(s) specified/needed?
40. Is the sole source directed to a former public servant?
41. Is this procurement a renewal of an existing contractual arrangement for the same services, or have the
services been procured before? If yes:
i. Who is the incumbent contractor?

ii. What is the previous contract number?
iii. When does it expire?
iv. Was it procured by PWGSC or the client?
v. Did the previous contract have special pricing or terms and conditions?
Annex 2.2: Green Procurement: Environmental Factors and Evaluation Indicators

(2016-01-28)
Client departments, with the assistance of Public Works and Government Services Canada (PWGSC), are
responsible for all four stages of the procurement process, from planning and acquisition through use and
disposal. The following lists are an example of aspects to be considered:
1. Environmental Factors and Related Cost Elements

Examples of environmental factors that should be taken into consideration in assessing value for money
are provided below. These are expressed in terms of cost elements that client departments may take into
consideration in the evaluation of bids. These include but are not limited to:
a. operation costs, such as energy or water consumed by the good over its life;
b. indirect costs (e.g. less energy efficient information technology equipment will produce more heat
causing the building's air conditioning system to work harder, and increase electricity costs);
c. administrative costs, such as complying to the Workplace Hazardous Materials Information

System (WHMIS);
d. investing up front to save costs later, such as specifying higher levels of insulation where the extra
expenditure can be recovered from lower energy costs;
e. use of refurbished parts or products, where possible;
f. Recyclability: This is thought to be the key since purchasers can create markets for their own
waste, such as paper, toner cartridges, etc., through the transformation and sale of products
containing recycled materials;
g. cost of disposal arrangements;
h. establishing minimum environmental performance standards for commodities where there is a

sufficient supplier base to support competition;
i. where the supplier base is limited, include incentives for meeting extra environmental
performance criteria; and
j. use of contractual terms, to define environmental obligations, such as packaging take-back, use of
certified recyclers for e-waste.
2. Environmental Evaluation Indicators

Examples of indicators that should be examined to develop evaluation criteria are as follows:
a. Environmental Certification
i. Has the good/service been certified through an independent program, such as the
Environmental Choice Program or Energy Star?
ii. Have studies of the environmental attributes of the good been completed?
b. Energy and Resource Efficiency
i. Do you purchase used, remanufactured, rebuilt or refurbished goods and/or materials?
ii. Does this good make efficient use of resources and energy throughout its life cycle?
iii. Does this good reduce waste?
iv. Suppliers should be instructed to indicate if the good has any energy, water or fuel saving
features, such as Power Down Mode.
v. Are there measures to extend the useful life of the good; for example, re-use, refill,
recharge, recondition?
c. Recycled Content
i. Does the good include post-consumer recycled content?
ii. What type and what percentage are recycled materials?
d. Hazardous Replacement
i. Does the supplier offer a non-hazardous replacement or alternative for this good?
ii. Does the good require Safety Data Sheets (SDS)?
e. Performance Testing
i. Is it possible to test the good/service, prior to purchase?
ii. Does the good meet the performance specifications?
iii. Is there any documented past performance? (For example, annual reports, environmental
performance reports).
f. Packaging
i. Is packaging reduced to the bare minimum required to ensure that the good is delivered in
perfect working condition?
ii. Can the good be acquired in bulk or concentrated form?
iii. Will the supplier remove the packaging from the site following installation?
iv. Is the packaging reusable, contain reusable parts or is it recyclable?
v. Does the packaging material contain post-consumer recycled materials?
g. On Site Waste Management
i. During the project, will all waste be source separated on site and recycled?
ii. Request information and reward environmentally sound stewardship and use of certified
haulers/sites.
iii. Is the good or service designed to minimize waste (for example, catering service using
dishes that are made of china rather than Styrofoam)?
h. Return for Disassembly and Recycling
i. Does the good include a return for recycling policy?
ii. Can the good be recycled in your area?
iii. Will consumables (such as toner cartridges) be accepted for recycling?
iv. Is the good easily disassembled?
i. Warranties
i. What is the expected useful life span of the good?
ii. How long is the warranty, and should you purchase an extended warranty?
j. Maintenance
i. Is the good designed for easy maintenance and repair?
ii. Are maintenance and replacement parts readily available and reasonably priced?
iii. Is the good easy and cost effective to upgrade?
k. Environmental Attributes of the Supplier
1. Does the supplier have a certification or registration (for example, ISO 14001 registration)?
2. Has the supplier received any regulatory environmental violations within the past five
years?
Annex 2.3: List of Public Works and Government Services Canada allocations units
(2017-11-28)
Headquarters
Fax
Mailing address Email address
number
Central Allocations 819-956- RCNAttributionsCentralisees.NCRCentralAllocations@tpsgc-

Unit 7827 pwgsc.gc.ca
0A1, Portage III
11 Laurier Street
Gatineau, Quebec
K1A 0S5
Atlantic Region
Fax
number
PWGSC, Acquisitions 902-566- PWGSC.ARRequisitionsNBPEI-

3 Queen Street 7514 RADemandesNBIPE.TPSGC@PWGSC-TPSGC.GC.CA
Charlottetown, PEI
C1A 7M8
PWGSC, Acquisitions 902-496- ATL.NSRequisitions@pwgsc-tpsgc.gc.ca
P.O. Box 2247 5016
Halifax, NS B3J 3C9
PWGSC, Acquisitions 506-851- PWGSC.ARRequisitionsNBPEI-
1045 Main Street, 3rd 6759 RADemandesNBIPE.TPSGC@PWGSC-TPSGC.GC.CA
Floor
Moncton, NB E1C 1H1
PWGSC, Acquisition 506-636- PWGSC.ARRequisitionsNBPEI-
Room 421, 189 Prince 4376 RADemandesNBIPE.TPSGC@PWGSC-TPSGC.GC.CA
William St.
Saint John, NB
E2L 2B9
PWGSC, Acquisitions 709-772- Rhonda.Manning@pwgsc-tpsgc.ca
P.O. Box 4600 2932
St.John's, NL A1C 5T2
Ontario Region
Fax
number
PWGSC Acquisitions 905-615- ONT9200Requisitions.ONT9200Requisitions@pwgsc-

33 City Centre Drive, Suite 2060 tpsgc.gc.ca
480C
Mississauga, ON. L5B 2N5
PWGSC Acquisitions 613-545- ONT9200Requisitions.ONT9200Requisitions@pwgsc-
86 Clarence Street, 2nd Floor 8067 tpsgc.gc.ca
Kingston, ON K7L 1X3
PWGSC, Acquisitions 416-512- ONT9200Requisitions.ONT9200Requisitions@pwgsc-
Real Property Contracting 5862 tpsgc.gc.ca
4900 Yonge Street, 12th
Floor
Toronto, ON M2N 6A6
PWGSC Acquisitions 613-687- ONT9200PET@PWGSC-TPSGC.GC.CA
PWGSC Building S-111, 6656
C114,
CFB Petawawa
Petawawa, ON K8H 2X3
Quebec Region
Fax
number
Place Bonaventure, 1st 514-496- QueRequisitionsMontreal.QueMontrealRequisitions@pwgsc-

Floor 3822 tpsgc.gc.ca
800 de la Gauchetière
West, Suite 1110
Montréal, QC, H5A 1L6
1550, D'Estimauville 418-648- QueRequisitionsQuebec.QueQuebecRequisitions@pwgsc-
Avenue 2209 tpsgc.gc.ca
Québec, QC G1J 5E9
Western Region
Mailing address Fax number Email address
PWGSC, Acquisitions 403 292 5786 WST-ALLOCATION@pwgsc-tpsgc.gc.ca

Requisition Receipt and Allocations
1650, 635 - 8th Ave SW
Calgary, AB T2P 3M3
Pacific Region
Fax
number
Marine Procurement including purchase, construction, refit or repair of 250- Pac.Marine@pwgsc-

vessels for boats of all size, and other associated marine equipment: 363- tpsgc.gc.ca
3960
PWGSC
401 - 1230 Government Street
Victoria, BC V8W 3X4
Commercially available goods or services including professional 250- Pac.Vicca@pwgsc-

services and R&Ds on Vancouver Island or in the Yukon Territory: 363- tpsgc.gc.ca
PWGSC 0395
401 - 1230 Government Street
Victoria, BC V8W 3X4
Commercially available goods or services including professional 604- Pac.Vanca@pwgsc-

services and R&D on the BC Mainland: 775- tpsgc.gc.ca
PWGSC 7548
641 - 800 Burrrard Street
Vancouver, BC V6Z 2V8
For requisitions related to Real Property: Contracting {construction, 604- Pac.Rpc@pwgsc-

maintenance and Architectural & engineering services}: 775- tpsgc.gc.ca
PWGSC 3366
641 - 800 Burrard Street
Vancouver, BC V6Z 2V8
Annex 2.4: Characteristics of Acquisitions Program Procurement Complexity Levels

(2014-09-25)
1. Complexity Level 1
Complexity Level 1 Procurements include or involve one or more of the following and do not include
or involve any of the criteria of Complexity Levels 2, 3, 4 and 5.
A call-up against a standing offer;
A commercially available good that is readily available in the marketplace, which may include
manufacturer-supplied customizable options. Includes Commercial Off-The-Shelf (COTS) or
Military Off-The-Shelf (MOTS);
A common service that is readily available in the marketplace, which may include supplier
customized options;
Procurement methodologies that are tried and proven using existing conventions;
Departmental Standard Procurement Templates or legally approved templates;
Contractor selection methodology that is based on price and delivery alone, or where all criteria
determining the successful bidder are objective (e.g. grid) and do not require subjective
judgement.
or involve any of the criteria of Complexity Levels 3, 4 and 5.
Government-specified performance requirements to commercially available goods;
A requirement which uses existing technology/processes to achieve an innovative solution;
Services with subjective results (e.g. consultations, recommendations);
Departmental Standard or Sector procurement templates which have been modified, that
introduce new custom clause(s), or that use terms and conditions other than those in the
Standard Acquisition Clauses and Conditions (SACC) Manual;
One or more evaluation criteria to determine the successful bidder that require subjective
judgment;
Industrial Regional Benefits (IRBs) and/or Value Propositions;
Vendor pre-qualification (includes establishment of Supply Arrangements);
Advance payments.
or involve any of the criteria of Complexity Levels 4 and 5.
A requirement which uses new, or a combination of new and existing, technology/processes to
achieve an innovative solution and may be developmental in nature;
A requirement and/or procurement that is highly unpredictable due to a high level of

uncertainty;
Untested procurement strategy.
Complexity Level 4 Procurements involve transformational requirements that are enterprise-wide
(across government) and include or involve one or more of the following elements:
High level of uncertainty;
May involve partnerships with clients and multiple stakeholders within various federal
government departments, where decision-making is shared;
Contract administration is detailed and extensive and its success is unpredictable;
More than one tier of government (i.e. federal, provincial, municipal) or multiple clients/
stakeholders with decision-making authority.
Complexity Level 4 Procurements do not include or involve any of the criteria of Complexity Level 5.
Complexity Level 5 Procurements involve transformational requirements that affect public policy or
culture (external to government) and include or involve one or more of the following elements:
High level of uncertainty;
Partnerships with clients, multiple stakeholders (internal and external to the federal government)
and elected officials, to reshape public policy or introduce new public policies;
Decision making is shared;
Contract administration is detailed, extensive and highly unpredictable;
Ultimate success is determined by the public at large.
Annex 2.5: Entering Complexity Code into the Automated Buyer Environment
(2014-09-25)
The following chart lists the codes that must be entered into the Automated Buyer Environment (ABE) to
indicate the Complexity Level of the procurement. It also lists the codes that must be entered if the Complexity
Level changes.
List of Procurement Complexity Levels and the Corresponding Codes for use in ABE
Code in ABE’s Workload Management text

Procurement Complexity Level
field
Complexity Level 1 "1"

Changing from Complexity Level 1 to Complexity "1,2"
Level 2
Level 3
Level 4
Level 5
Level 1
Level 3
Level 4
Level 5
Level 1
Level 2
Level 4
Level 5
Level 1
Level 2
Level 3
Level 5
Level 1
Level 2
Level 3
Level 4
3 Chapter 3 - Procurement Strategy

(2012-01-18)
3.1 Procurement strategy - Introduction

(2015-09-24)
a. A procurement strategy defines in general terms how a good, service, or construction will be procured,
and will include, at the highest level, the determination to proceed competitively or non-competitively
and applicable details in support of industrial and regional benefits or other national objectives. The
strategy could be quite straightforward, such as the decision to use a standing offer, or could be more
detailed, which would be used for major projects.
b. The development of a procurement strategy begins with the first meeting between Public Works and
Government Services Canada and the client, and often even before this point. It is the most important
step in the procurement process as it influences the scope of the requirement and determines the extent
of competition.
c. In developing the procurement strategy, the guiding principles described in 1.10.5 Guiding Principles
must be taken into consideration. Specifically, the procurement strategy must satisfy the client's
operational requirements and comply with legal requirements, while achieving best value, and
advancing national objectives.
3.1.1 Planning the Procurement

(2011-10-04)
a. A non-exhaustive list of some of the factors that the client and the contracting officer can take into
account when developing the procurement strategy are listed as follows:
i. the method of supply;
ii. total estimated cost including all options, as well as maintenance and storage costs, as applicable;
iii. contract period;
iv. delivery requirements;
v. the procurement schedule;
vi. evaluation procedures and method of selection;
vii. environmental factors;
viii. commercial products versus customized solutions;
ix. risk factors;
x. possible use of a fairness monitor;
xi. the participation of small and medium enterprises;
xii. aboriginal considerations;
xiii. other national objectives;
xiv. compatibility with existing solutions,
xv. the opportunity to consolidate requirements;
xvi. disposal of the product, if applicable, and
xvii. renewal (procurement of a replacement good or service and all transfer costs).
b. The approval authority must be given the opportunity to approve or reject the proposed procurement
strategy as early as possible in the process, to avoid the situation where a contracting officer has done
significant work following a strategy which may not be approved.
c. The procurement strategy must identify any deviations to contracting policies.
d. If events during the procurement process result in a significant change in the procurement strategy, a
revised procurement plan must be approved before implementation or completion of the procurement
process.
e. For related information, see 6.5 Procurement Approval Documents.
3.1.5 Procurement Risk Assessments for Complexity Level 1, 2 and 3 Procurements

(2014-09-25)
a. As soon as the key elements of the procurement strategy have been determined, or when it is determined
that Treasury Board approval is required, the contracting officer must complete a procurement risk
assessment (PRA), prior to preparing an approval document. For further instructions on completing the
approval documents refer to section 6.5 Procurement Approval Documents.
b. The procurement risk assessment process is applied in order to determine the level of risk the
Government of Canada is exposed to when entering into contracts. The assessment process also
provides the foundation for risk response strategies that will be employed to mitigate procurement risks
and provide guidance to the contracting officer when high risks are identified.
c. The PRA process places an emphasis on:
i. The early assessment of contract risk factors that may put a procurement at risk;
ii. Recording the risks and identifying the response strategies in the approval documents;
iii. Communicating these risks to management and clients, as necessary; and
iv. Ensuring that risks are re-assessed in the procurement when circumstances dictate, as part of
monitoring and continuous improvement.
d. At any time during the procurement process, there may be a requirement to re-assess the complexity of
the procurement or risk in the procurement because of changing factors in the procurement or its
environment. If this occurs, a revised procurement risk assessment must be prepared to determine if any
of the risk factors have changed.
e. For Complexity Levels 1 through 3 inclusive, the procurement risk assessments are available on the
Procurement Corner page on The Source, Public Works and Government Services Canada’s intranet
site (available internally only).
f. For Complexity Levels 4 and 5 inclusive, due to the high level of risk and uncertainty associated with
these Complexity Levels, the contracting officer must contact the Risk Management Advisory Services
(RMAS) who will work with the contracting officer in completing a custom risk assessment specific to
the complexities of a Level 4 or 5 procurement.
g. For procurements that fall under Schedule 3 of PWGSC’s Common Services Acquisitions
Authorities (i.e., within Departmental Authority), contracting officers must identify the risks and the
associated risk response measures for those risks identified as medium-high and high. Contracting
officers are encouraged to discuss the issues associated with these risks with their supervisor, manager,
or RMAS.
h. For procurements that require the approval of Treasury Board, contracting officers must consult
RMAS and work collaboratively to ensure that all relevant medium, medium-high and high risks are
identified appropriately within the Treasury Board submission document. For more information on
seeking Treasury Board approval, refer to section 6.5.15.1 Procurement requiring a Treasury Board
Submission.
i. When approval is required to issue an amendment, a Procurement Risk Assessment for Amendments
(PRAA) must be completed. See Annex 6.4.6 Contract Amendment Approval Instructions for more
detail.
j. For more information on the Risk Assessment Framework, see the Acquisition Program Risk
Assessment Framework .
3.1.10 Addressing Identified Risks in the Approval Document

(2014-09-25)
a. The approval document should contain the following elements:
i. Risk Statement: This statement describes what risk may occur, the harm it may cause, the
likelihood of the harm occurring and the extent (or severity) of its impact.
ii. Risk Response: This describes the action that can be taken to reduce the level of risk. Risk
response measures can take the form of risk reduction so that the impact of the risk is lowered.
Alternatively, avoidance and prevention measures can also reduce the likelihood of occurrence.
iii. Residual Risk: The residual risk is what remains after risk response measures have been applied.
In theory, no risk can be completely eliminated, and so there must be a description of the
remaining level of risk involved in the procurement. The level of the residual risk can be a critical
factor in determining how to proceed with the procurement because the residual may be at an
unacceptable level.
b. A copy of the completed Procurement Risk Assessment (PRA) (see 3.1.5 Procurement Risk
Assessments for Complexity Level 1, 2 and 3 Procurements) must accompany the approval document
and be kept on file.
c. The approval authority may direct the contracting officer to review the procurement strategy or risk
factors; to seek review by Legal Services, Cost Analysts or other subject matter experts; or to repeat the
complexity assessment or risk assessment.
d. In cases where the PRA is revised, a copy must be attached to the approval document indicating which
version it is and the reason for the revised PRA.
3.1.15 Complex Procurement

(2014-09-25)
With the promulgation PN105R1 - Procurement Complexity Levels, Risk Assessment and Approval Authorities,
the content of this section was reviewed and incorporated in sections 3.1.5 Procurement Risk Assessments for
Complexity Level 1, 2 and 3 Procurements and 6.5.15.1 Complex Procurements requiring a Treasury Board
Submission.
For reference purposes, section 3.1.15 is available in the Supply Manual Archive
3.5 Existing Procurement Instruments

(2011-10-04)
a. Before determining a new method of supply for the requirement, the contracting officer should first
ensure that the good or service is not already available from an existing procurement instrument. Clients
should be encouraged to use mandatory or non-mandatory standing offers/supply arrangements to
satisfy their requirements, whenever possible. A list of standing offers and other instruments is available
from the Standing Offer Index (SOI) .
b. The Standing Offer Coordination Office provides information associated with the administrative aspects
of standing offers and other procurement instruments, including:
i. facilitate the exchange of information on standing offers and supply arrangements between Public
Works and Governments Services Canada ( PWGSC) and clients;
ii. prepare, update and coordinate the distribution of indices of all National Master Standing Offers
(NMSOs), Departmental Individual Standing Offers (DISOs), Regional Master Standing Offers
(RMSOs) and supply arrangements;
c. Federal government employees who require additional information or assistance with locating standing
offer information can contact the PWGSC Acquisitions Services Support Desk, Business Operations
and Service Management, by phone at 819-956-3325 or 1-866-664-6609.
d. Suppliers requiring additional information on standing offers and supply arrangements can contact the
Office of Small and Medium Enterprises InfoLine at 1-800-811-1148, or by email at: bpmeclient-
osmeclient@tpsgc-pwgsc.gc.ca.
3.5.1 Mandatory Standing Offers and Supply Arrangements

(2014-11-27)
a. Public Works and Government Services Canada (PWGSC) has put in place a number of standing offers
and supply arrangements that must be used before any new procurement is considered in accordance
with the Treasury Board ARCHIVED - Policy Notice: Business Transformation Initiative – The Way
Forward (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/2005/04-eng.asp) .
b. The use of standing offers and supply arrangements for the commodity groups listed below is
mandatory and these mandatory commodities are listed in the Standing Offer Index (SOI) Website .
N84: Clothing, Individual Equipment and Insignia
N58: Communication, Detection, and Coherent Radiation Equipment
N91: Fuels, Lubricants, Oils and Waxes
N71: Furniture
N70: General Purpose Automatic Data Processing Equipment (Including Firmware), Software,
Supplies and Support Equipment
N23: Ground Effect Vehicles, Motor Vehicles, Trailers and Cycles
D3: Information Processing and Related Telecommunication Services
N74: Office Machines, Text Processing Systems and Visible Record Equipment
N75: Office Supplies and Devices
R: Professional, Administrative and Management Support Services

Sub-categories:
RO: Professional Services
R1: Administrative and Management Support Services
R2 : Personnel Recruitment
c. These mandatory standing offer and supply arrangements apply to all departments, as defined in Section
2 of the Financial Administration Act, including the Canadian Forces, and to Crown procurement
contracts subject to the Government Contracts Regulations and the Treasury Board Contracting Policy.
d. Client departments and agencies continue to be able to acquire goods and services as they have in the
past. However, they must first verify whether a mandatory standing offer or supply arrangement exists
that meets their requirements. If one does, clients must use it.
e. On receipt of a requisition for any goods or services within these identified commodity groups,
contracting officers must determine if an existing standing offer or supply arrangement can meet the
requirement. If so, that standing offer or supply arrangement must be utilized.
f. The goods or services should not duplicate those already provided under an existing standing offer or
supply arrangement at the national or regional level. If the required goods or services are similar, or
identical, in nature to goods or services available under existing standing offers or supply arrangements,
a full rationale must be provided to justify using another procurement instrument or method of supply.
For the process on creating a new standing offer or supply arrangement, see 3.205 Review Process for
Creation, Renewal and Extension of Standing Offers and Supply Arrangements.
g. It should be pointed out to clients that when they use a mandatory standing offer or supply arrangement
(with the exception of Departmental Individual Standing Offers), they can receive the goods or services
faster and with less administrative cost than by sending a requisition to PWGSC. The value of the
acquisition will be limited to their Treasury Board Secretariat delegated purchasing authorities.
h. Mandatory procurement instruments, such as standing offers and supply arrangements, must be used by
client departments acting on their own behalf, or by PWGSC handling a requisition, unless one of the
following applies:
i. the good or service available through the mandatory standing offer or supply arrangement does
not meet justifiable operational requirements, including specifications or delivery dates.
ii. the value of the requirement exceeds the call-up limitation of the standing offer or the scope of the
supply arrangement.
iii. an existing contract is in place, which guarantees the work to another supplier.
iv. the requirement is subject to contracting obligations under Comprehensive Land Claims
Agreement(s) (CLCA), and no mandatory standing offer/supply arrangement exists which
addresses the contracting obligations of the applicable CLCA(s);
v. the requirement will be set aside under the Procurement Strategy for Aboriginal Business
(PSAB), and no mandatory procurement instrument exists for PSAB set-asides;
vi. the goods or services will be acquired from CORCAN as a stores transfer order.
i. If PWGSC is handling a requisition, and the contracting officer informs the client that a mandatory
standing offer or supply arrangement exists for the client's requirement, and the client disputes the
opinion, the contracting officer will seek a decision from the appropriate manager or director
responsible for that standing offer or supply arrangement. If the client believes that the decision
rendered is not appropriate, the client may refer the issue to their respective Acquisitions Account
Executive in the Client Engagement Sector. Although, the Account Executives do not make the final
decision, they will carefully assess the issue with the director responsible for that standing offer or
supply arrangement, in order to have a clear and timely resolution.
j. If a client department is handling its own procurement, and does not want to use a mandatory standing
offer or supply arrangement, it must contact the contracting officer responsible for the appropriate
standing offer or supply arrangement (the one that the client department does not want to use), and
explain the reason(s).
k. If the reason(s) are disputed by the contracting offer, the contracting officer will discuss the issue with
his manager and director, as required for a decision. If the client considers that the decision rendered is
not appropriate, the client may refer the issue with their respective Acquisitions Account Executive in
the Client Engagement Sector. Although, the Account Executives do not make the final decision, they
will carefully assess the issue with the director responsible for that standing offer or supply
arrangement, in order to arrive at a clear and timely resolution.
l. The contracting officer should record all procurements where an applicable mandatory standing offer or
supply arrangement was not used, and the associated reason(s).
Note 1: Departments can not put their own standing offers or supply arrangements in place, so as to
avoid having to use PWGSC standing offers or supply arrangements, as this would defeat the long term
benefits and savings of the PWGSC government wide approach.
Note 2: If a lower price is available for an equivalent good or service, by means other than the
mandatory standing offer or supply arrangement, the client department is requested to inform the
PWGSC contracting officer responsible for the appropriate standing offer or supply arrangement (the
one that the client department does not want to use).
3.10 Competitive Contracting Process

(2012-01-11)
a. The Government Contracts Regulations (GCRs) require the solicitation of bids before any contract is
entered into, though the GCRs do provide for exceptions to soliciting of bids.
b. Whenever possible, contractors must be selected using a competitive process. The flexibility to depart
from this approach depends on the procurement framework being followed. The type of competitive
solicitation that may be used will also depend on the procurement framework.
c. It is the contracting officer's responsibility to select the most effective process for notifying suppliers of
an opportunity by taking into consideration the requirements of the trade agreements and the policies set
out in the Supply Manual.
d. For procedures relative to public advertisement and for publication of a Notice of Proposed Procurement
and posting solicitation documents, see 4.75.10 Public Advertisement to 4.75.25 Procedures for Posting
Solicitation Documents on GETS. For procurements not publicly advertised, see 4.75.45 Use of Source
Lists. For more information on trade agreements, see 3.50 Procurements Subject to Trade Agreements.
3.15 Non-competitive contracting process

(2017-09-21)
a. In all instances where bids are not solicited, the legal authority to use an exception to soliciting bids
must be fully justified by the client department with a reference to the applicable exception to
competitive bidding which may apply under the Government Contracts Regulations (GCRs) of the
Financial Administration Act (FAA), and the limited tendering provisions of Canada's national and
international trade agreements. Contracting officers are also reminded to take into account the
procurement provisions under the Comprehensive Land Claims Agreements (CLCAs).
b. The GCRs require the solicitation of bids before any contract is entered into. However, contracts may be
entered into without soliciting bids when:
i. The need is one of pressing emergency in which delay would be injurious to the public interest
(GCRs 6.(a));
Note: A pressing emergency may be an actual or imminent life-threatening situation, a disaster
which endangers the quality of life or has resulted in the loss of life, or one that may result in
significant loss or damage to Crown property. See 3.22 Emergency Requirements (Public Works
and Government Services Canada as Contracting Authority) for further instructions on
Emergency Requirements.
ii. The estimated expenditure does not exceed,
A. $25,000;
B. $100,000 where the contract is for the acquisition of architectural, engineering and other
services required in respect of the planning, design, preparation or supervision of the
construction, repair, renovation or restoration of a work;
C. $100,000 where the contract is to be entered into by the member of the Queen's Privy
Council for Canada responsible for the Canadian International Development Agency and is
for the acquisition of architectural, engineering or other services required in respect of the
planning, design, preparation or supervision of an international development assistance
program or project; GCRs 6.(b))
iii. the nature of the work is such that it would not be in the public interest to solicit bids; or GCRs 6.
(c));
iv. only one person is capable of performing the contract GCRs 6.(d)).
The exception should only be invoked where patents, copyright requirements, or technical compatibility
factors and technological expertise suggest that only one contractor exists.
c. There is a need to provide more rigor when invoking exception 6.(d) of the Government Contracts
Regulations (GCRs) where only one person is capable of performing the contract. When invoking
exception 6.(d) for procurements above $25K, the questions found in Annex 3.1: Treasury Board
Questions for Sole Source must be answered by the contracting officer with the assistance of the client
department. The answers to these questions must be appended to the approval documents and placed on
the procurement file (see 6.5.5.1 CPAA Instructions and Annex 6.2: Contract Request Instructions.
d. With respect to the trade agreements, contracting officers may award a contract without soliciting bids,
only if one or more of the limited tendering reasons stated in each applicable trade agreement can be
applied. The relevant articles are as follows:
i. North American Free Trade Agreement (NAFTA) Article 1016: Limited Tendering Procedures;
ii. Canada-European Union Comprehensive Economic and Trade Agreement (CETA) Article 19.12:
Limited Tendering (http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-
acc/ceta-aecg/text-texte/19.aspx?lang=eng) ;
iii. World Trade Organization Agreement on Government Procurement (WTO-AGP) Article XV:
Limited Tendering (http://www.wto.org/english/docs_e/legal_e/gpr-94_02_e.htm#articleXV) ;
iv. Canadian Free Trade Agreement (CFTA) Article 513: Limited Tendering or Agreement on
Internal Trade (AIT) Article 506: Procedures for Procurement (http://www.ic.gc.ca/eic/site/ait-
aci.nsf/eng/il00006.html#G) , paragraphs 11 and 12.
Note 1: A copy of these limited tendering reasons are provided in Annex 3.2: Limited Tendering
Reasons contained in the Trade Agreements.
Note 2: In general, the Supply Manual refers only to NAFTA and the WTO–AGP, as the procedural
requirements of the other international trade agreements will be fulfilled following compliance to the
procedural requirements of NAFTA and the WTO–AGP. See 1.25.16 Bilateral Free Trade Agreements.
3.15.1 Justification of Non-competitive Process

(2012-01-11)
a. While the client department must provide the rationale for any exception to soliciting bids, it is the
responsibility of the contracting officers to make sure that the rationale can be adequately supported.
Contracting officers are also reminded to take into account the procurement provisions under the
Comprehensive Land Claims Agreements.
b. If there is inadequate or no substantiation, the contracting officer should advise the client of alternative
products or sources, if known, and attempt to reach agreement with the client on the most appropriate
procurement strategy. When agreement cannot be reached by the contracting officer, the next level of
management should be consulted.
c. Use of any of the GCRs exceptions must be fully justified by the contracting officer with appropriate
documentation that sets out the procurement strategy as well as the rationale for the exception used,
placed on the procurement file (see 3.15 Non-competitive Contracting Process and 6.5.1 Procurement
Plan). The trade agreements also contain provisions to document on file the reasons for the use of
limited tendering and the appropriate article must be provided as justification, where applicable. (See
3.15 Non-competitive Contracting Process, paragraph d. and 3.25 Trade Agreements Tendering
Approaches, paragraph b.).
3.15.2 Code of Conduct (Sole Source of Supply)

(2014-03-01)
The content of this section was reviewed and incorporated in sections 3.51 Integrity Overview and 4.21
Integrity Provisions. For reference purposes, section 3.15.2 is available in the Supply Manual Archive
3.15.5 Advance Contract Award Notice

(2013-06-01)
a. An Advance Contract Award Notice (ACAN) is a public notice indicating to the supplier community
that a department or agency intends to award a good, service or construction contract to a pre-identified
supplier, believed to be the only one capable of performing the work, thereby allowing other suppliers to
signal their interest in bidding by submitting a statement of capabilities. If no other supplier submits a
statement of capabilities that meets the requirements set out in the ACAN, the contracting officer may
then proceed with awarding the contract to the pre-identified supplier. It is important to note that an
ACAN is not a "competitive" process. Also of note is that an ACAN process, even if conducted in
accordance with the Policy, does not constitute a "competitive" process for the purposes of the trade
agreements and any Canadian International Trade Tribunal (CITT) challenge. For the purposes of
contract approval authorities only, a contract awarded after posting an ACAN for which no valid
statement of capabilities is submitted within the notice period is a competitive (electronic) contract.
b. The objectives of the ACAN process are to:
i. provide a procurement process that is efficient and cost effective while being fair, open and
transparent;
ii. provide potential suppliers with the opportunity to demonstrate, by way of a statement of
capabilities, that they are capable of satisfying the requirements set out in the ACAN; and
iii. respect the principles of government contracting by enhancing fairness, access and transparency.
c. To provide transparency to the procurement process, an ACAN can be used only when there is sufficient
justification for not soliciting bids in accordance with the exceptions of the Government Contracts
Regulations (GCRs) and, if applicable, in accordance with the limited tendering reasons set out in the
applicable trade agreements. (See 3.15 Non-competitive Contracting Process and 3.15.1 Justification of
Non-competitive Process)
d. The ACAN notice must be published on the Government Electronic Tendering Service (GETS)
provided through the Buyandsell.gc.ca Tenders minisite. However, before initiating the ACAN,
contracting officers must ensure that:
i. the requirement is sufficiently defined so that industry can understand the government's high level
requirements;
ii. a justification is on file to demonstrate compliance with one of the exceptions of the GCRs and, if
applicable, one of the exclusions or limited tendering reasons of the applicable trade agreements;
iii. a procurement plan or Contract Plan and Advance Approval (CPAA), as applicable, is placed on
the procurement file before an ACAN is posted;
iv. the pre-identified supplier meets the same criteria to be used for assessment of other suppliers
who submit statements of capabilities; and
v. the procedures provided in 3.15 Non-competitive Contracting Process to 3.15.5.20 Documenting

the Procurement File are followed.
e. Contracting officers must ensure that Canada is in a position to accept a statement of capabilities before
publishing an ACAN. For more information on the process relative to the statement of capabilities, see
3.15.5.10 Statement of Capabilities (Challenge Process). In circumstances where there is no possibility
of another supplier submitting a statement of capabilities or where Canada cannot, for program or policy
reasons, accept a statement of capabilities from another supplier, an ACAN must not be published.
Accordingly, the use of an ACAN for non-competitive requirements is not mandatory and there is no
requirement to seek approval not to publish an ACAN for a requirement. In such cases where the
ACAN process is not used, the non-competitive approval authorities apply to the procurement strategy
and contract award notices will be issued after contract award. (See 3.15.5.15 Advance Contract Award
Notice Exceptions for ACAN exceptions and 7.30 Procurement Reporting and Posting of Award
Notices for contract award notices).
f. ACANs are not to be used to circumvent electronic bidding or other bidding procedures when it is clear
that more than one supplier exists that can perform the work.
g. ACANs are not to be structured in ways that discourage submissions of statements of capabilities. For
example, the notice should not say: "This is not a competitive solicitation", or "This is a non-
competitive requirement".
3.15.5.1 Advance Contract Award Notice Time Limit

(2012-01-11)
a. Although ACANs are posted for a minimum of 15 calendar days on GETS, the contracting officer
should consider a longer posting period based on the individual circumstances for each procurement. In
determining the ACAN time limit, contracting officers must consider the complexity associated with the
procurement.
b. Furthermore, while for reasons of timeliness and efficiency, contracting officers may enter into
negotiations with the pre-identified supplier before the closing of the ACAN posting period, care should
be exercised to ensure that any such negotiations do not put the pre-identified supplier at an advantage
should a successful challenge take place before contract award. In addition, the pre-identified supplier
must be cautioned not to commence any work or incur any costs before contract award.
3.15.5.5 Procedures for Posting an Advance Contract Award Notice

(2012-01-11)
a. Contracting officers are responsible for preparing an ACAN for publication on GETS.
b. The ACAN notice must follow the model provided in Annex 3.3 Model Advance Contract Award
Notice and include the following information:
i. An explanation of the purpose of the ACAN;
ii. A description of the requirement that is sufficiently defined so that industry can understand the
government's high level requirements;
iii. The criteria against which all suppliers will be evaluated. Statements of capabilities submitted by
potential suppliers will be assessed against these criteria. Information provided must be sufficient
to allow other suppliers to determine if they possess the capabilities required to satisfy the
requirement. The pre-identified supplier must also meet these criteria; Note: In general, the
Supply Manual refers only to NAFTA and the WTO–AGP, as the procedural requirements of the
other international trade agreements will be fulfilled following compliance to the procedural
requirements of NAFTA and the WTO–AGP. See 1.25.16 Bilateral Free Trade Agreements.
iv. The applicability of one or more trade agreements to the procurement for which the ACAN will
be issued;
v. A statement indicating if the procurement is set-aside under the Procurement Strategy for
Aboriginal Business;
vi. A statement indicating if the procurement is subject to one or more of the Comprehensive Land
Claims Agreement;
vii. A justification for the pre-identified supplier;
viii. A statement indicating that the proposed procurement meets one or more exceptions to soliciting
bids under the Government Contracts Regulations (GCRs). (see 3.15 b.);
ix. A statement indicating the exclusion(s) or the limited tendering reason(s) being invoked under the
applicable trade agreement(s). Such exceptions must be fully and clearly justified in writing on
the procurement file;
x. A statement regarding ownership of intellectual property, if applicable;
xi. The period of the proposed contract or the delivery date(s), as applicable;
xii. A cost estimate of the proposed contract, where appropriate, provided that it will not prejudice
negotiations with the pre-identified supplier, or compromise the supplier's competitive position if
a decision is made to proceed with a competitive bidding process;
xiii. The name and address of the pre-identified supplier;
xiv. An explanation of how suppliers may proceed in responding to an ACAN;
xv. The closing date and time for a submission of a statement of capabilities; and
xvi. The name and address of contact for inquiries and submission of statements of capabilities.
c. When significant information not specifically set out in the ACAN becomes available or a significant
clarification is required, it must be provided equally to all interested parties to ensure fairness, openness
and transparency. Such information should be provided in an amended ACAN with an extension to the
closing date or a new ACAN should be issued, as applicable.
3.15.5.10 Statement of Capabilities (Challenge Process)

(2014-09-25)
a. The Advance Contract Award Notice (ACAN) process provides suppliers with an opportunity to submit
a statement of capabilities regarding work identified in an ACAN.
b. Statements of capabilities submitted by suppliers:
i. should be provided in writing within the specified timeframe indicated on the ACAN; and
ii. include documentation demonstrating that the supplier meets the requirements and the criteria as
set out in the ACAN.
c. Despite the timeframe indicated in the ACAN, there may be circumstances when a contracting officer
could consider a statement of capabilities received after the specified date but before the award of the
contract. Contracting officers should discuss this with their management and Legal Services.
d. Following receipt of a statement of capabilities, the process is as follows:
i. All statements of capabilities received by the timeframe indicated in the ACAN are reviewed by
the contracting officer in accordance with the criteria provided in the ACAN. The pre-identified
supplier indicated in the ACAN is also assessed against those same criteria. The assessment must
be kept on file.
ii. When a supplier's statement of capabilities provides sufficient information to indicate that it meets
the requirements set out in the ACAN, the supplier is notified of the decision to compete the
requirement before proceeding to a full bidding process.
iii. If a statement of capabilities is rejected, a separate review of the rejection is conducted at one
level above the approval authority, but no higher than the following:
A. Complexity Level 1: Manager
B. Complexity Level 2: Director/Regional Director
C. Complexity Level 3: Director General/Regional Director General
D. Complexity Level 4 and 5: Assistant Deputy Minister, Acquisitions Branch
iv. With respect to statements of capabilities that are rejected, suppliers should be advised in writing
of the decision to reject a statement of capabilities before a contract is awarded.
v. The reasons for the decision to reject a statement of capabilities are included in the file.
vi. Suppliers that have submitted a statement of capabilities are given the reasons why their statement
of capabilities was rejected.
vii. The request from a supplier to withdraw/cancel its statement of capabilities is documented on file,
and should be provided in writing by the supplier.
e. If the procurement is being set aside under the Procurement Strategy for Aboriginal Business,
statements of capabilities must only be considered from Aboriginal suppliers.
f. If the requirement subject to an ACAN is cancelled, suppliers that submitted statements of capabilities
should be notified in a timely manner.
g. Contracting officers may request additional information from suppliers or third parties, as appropriate,
to ensure that the interested supplier has the capability to meet the requirements set out in the ACAN.
3.15.5.15 Advance Contract Award Notice Exceptions

(2012-01-11)
a. Contracting officers must ensure that Canada is in a position to accept a statement of capabilities before
publishing an ACAN. In circumstances where there is no possibility of another supplier submitting a
statement of capabilities or where Canada cannot, for program or policy reasons, accept a statement of
capabilities from another supplier, then the contract should be awarded on a non-competitive basis with
transparency achieved through a contract award notice. Examples of situations where an ACAN is not to
be published include:
i. when, for reasons of security or public interest, the information contained in an ACAN cannot be
provided to the public;
ii. confirming orders;
iii. Corps of commissionaires, if right of first refusal applies;
iv. government direction, such as Munitions Supply Program;
v. works of art;
vi. where, for reasons of extreme urgency brought about by events unforeseeable by the entity, the
goods or services could not be obtained in time by means of open or selective tendering
procedures;
vii. tobacco products purchased for inmates by Correctional Service Canada;
viii. regulatory body determined non-competitive service contracts (e.g. National Transportation
Agency, Canadian Radio-Television and Telecommunications Commission);
ix. consolidated announcements that advertise a program consisting of several non-competitive

standing offers/contracts (pharmaceutical and medical supplies are the only products currently
eligible for this exclusion); and
x. when an entity needs to procure consulting services regarding matters of a confidential nature, the
disclosure of which could reasonably be expected to compromise government confidences, cause
economic disruption or similarly be contrary to the public interest.
b. In such cases, the rationale underlying the decision not to publish an ACAN should be well documented
on the procurement file.
3.15.5.20 Documenting the Procurement File

(2013-06-01)
When the decision is made to proceed with an ACAN, contracting officers are required to document the
procurement file with the actions taken in each phase of the ACAN process. Procurement files must include
documentation of the following justifications, reasons and associated steps, as a minimum:
a. The rationale for the pre-identified supplier including the relevant exception to soliciting bids under the
GCRs and, as applicable, the limited tendering reasons under the trade agreements (see 3.15 Non-
competitive Contracting Process to 3.15.5 Advance Contract Award Notice).
b. The actions taken to determine if other suppliers may have been capable of performing the work. When
an industry analysis is conducted to identify the possible companies that could perform the work and
one company is identified but there is a doubt (or uncertainty) that there may be additional suppliers for
this requirement, then an ACAN would be published. Justification of the only known supplier based on
the industry analysis along with an approved procurement strategy must be put on the procurement file
before an ACAN is posted; e.g. the identified supplier is the only known source based on the industry
analysis. If an exhaustive industry analysis has been completed and there is no doubt that there is only
one provider capable of performing this work, then a non-competitive process would be more
appropriate and an ACAN would not be posted.
c. When invoking exception 6(d) of the GCRs for procurements above $25K, the responses to the
questions contained in Annex 3.1: Treasury Board Questions for Sole Source must also accompany the
approval document and be on file (see 3.15 d.).
d. The assessment criteria and the assessment of the pre-identified supplier.
e. An approved procurement strategy (see 6.5.1 Procurement Plan).
f. The ACAN notice(s) posted on the Government Electronic Tendering Service (GETS) and, if
applicable, the amended notice.
g. The process followed in either accepting or rejecting a statement of capabilities from another supplier or
suppliers, including the independent review, if required, and the final assessment of the suppliers (see
3.15.5.10 d.).
h. Evidence that all suppliers that submitted a statement of capabilities were notified and were given the
reasons why their statement of capabilities was rejected, if requested (see 3.15.5.10 Statement of
Capabilities (Challenge Process).
i. Details of any resulting competitive process, if conducted.
3.20 Procurement Schedule

(2010-01-11)
a. Early in the process, contracting officers should develop a procurement schedule for the entire
procurement cycle in consultation with the client. The following, as applicable, must be taken into
consideration:
i. review and analysis of the client's requirements;
ii. time for Request for Information process;
iii. the Procurement Review Committee process;
iv. assessment/approval for the use of a fairness monitor;
v. approval of the Procurement Plan or the Contract Planning and Advance Approval;
vi. solicitation documents preparation;
vii. translation requirements;
viii. the time required for the preparation of and the receipt of bids, offers or arrangements, including
site visits and bidders conference, if applicable;
ix. bidding period, and extensions;
x. technical evaluation period;
xi. financial evaluation;
xii. benchmarking or other pre-award testing;
xiii. recommendations from legal and financial reviews;
xiv. the evaluation process;
xv. the requirement for negotiation;
xvi. the obtaining of security clearances;
xvii. the level of approval required;
xviii. approval document preparation;
xix. any other item that might contribute to the time to complete the procurement.
b. In the normal course of events, final draft submissions must be received by the Treasury Board
Secretariat (TBS) seven weeks before being scheduled on a Treasury Board (TB) agenda.
c. Overall, the contracting officer should expect at least 16 weeks process time for a qualified bid, offer or
arrangement to obtain TB approval. The overall procurement process may take as much as six months to
effect a major procurement for the client, assuming there are no challenges during the process. When it
is reasonable to expect that a TB approval will be required, the validity period must be sufficient to
ensure that bids, offers or arrangements are still valid when the TB approval is received.
3.21 Managing Urgent Acquisitions

(2011-05-16)
a. An urgent requirement (acquisition) is one that calls for immediate action and conveys a sense of
urgency. The contracting officer will decide, in consultation with the client and PWGSC management as
required, if the requirement is to be treated as an urgent acquisition. Defining an acquisition as urgent
will depend on the current client department's priorities as well as government priorities as a whole. For
example, an urgent requirement may be defined as those acquisitions where an undue delay could have
a significant economic impact, an effect on health and safety programs, or a risk of not meeting an
important project/program milestone.
b. In most cases, it is important that PWGSC be engaged early in the process, respecting roles and
responsibilities, to ensure that a comprehensive procurement strategy is developed to meet the client's
operational objectives.
c. When the requirement has been identified as urgent, the following strategies may be utilized:
i. PWGSC and the client should use an integrated team approach with dedicated personnel working
closely with the client's project team. Where there are multiple urgent requirements, consideration
should be given to having a single point of contact in each department to coordinate all of the
acquisitions.
ii. early development of sound communication channels is crucial, involving all stakeholders. Urgent
requirements will be given priority attention, and concurrent review processes should be
established and used whenever possible.
iii. contracting officers should provide information to the industry as early as possible in the process,
using such pre-solicitation tools as Request for Information (RFI), Solicitation of Interest and
Qualification (SOIQ), and Price and Availability Enquiries (P&A), where appropriate. For more
information on the use of these tools, see 4.5.
iv. in cases where Treasury Board project approval is required but has not yet been obtained by the
client, consideration must be given to developing a joint TB submission signed by both ministers
that will seek (advance) contract approval at the same time. The TBS program sector analyst
should always be contacted during the development of the TB submission for advice and
guidance in regards to the content and on the approval process.
3.22 Emergency Requirements (Public Works and Government Services Canada as

Contracting Authority)
(2016-01-28)
a. A pressing emergency is defined in accordance with the Treasury Board notice CPN 2007-4 - Non-
Competitive Contracting (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/2007/0920-eng.asp) and includes:
i. an actual/imminent life-threatening situation;
ii. a disaster endangering quality of life or safety of Canadians;
iii. a disaster resulting in the loss of life; or
iv. a disaster resulting in significant loss/damage to Crown Property.
b. Part III Emergency Contracting Limits of the Treasury Board Contracts Directive (http://www.tbs-
sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text#appC) allows that any department or agency may enter into and
amend a contract up to a total value of $1 million (including amendments and all applicable taxes
including GST or HST) in response to a pressing emergency requirement. The most senior official
available should approve such contracts. It is important to verify each department’s internal delegation
and implementation policies before applying these instructions.
c. Additionally, Part III of the Treasury Board Contracts Directive (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?

id=14494&section=text#appC) contains an exceptional emergency contracting authority, which allows that the
Minister of Public Works and Government Services Canada (as a contracting authority) may enter into a
non-competitive contract up to a total value of $15 million without Treasury Board approval in response
to pressing emergencies by departments where there is significant human and/or financial risks. Note:
The Minister of Public Works and Government Services Canada (PWGSC) has delegated this authority
to the Assistant Deputy Minister, Acquisitions Branch and the Associate Assistant Deputy Minister,
Acquisitions Branch.
d. PWGSC’s Acquisitions Branch emergency contracting authority for client departments can be used only
if all of the following criteria are met:
i. the National Security Exception or extreme urgency provision of each applicable trade agreement
has been invoked;
ii. the requirement cannot be satisfied by normal contracting procedures due to the urgency of the
situation; and
iii. the applicable client department provides their Minister’s approval of the initiation of the
emergency requirement by PWGSC to the Minister of PWGSC.
e. Contracts for emergency requirements must be approved by the most senior official available. PWGSC
contracting officers must provide a procurement plan or a briefing note describing the reasons for
requesting the emergency requirement, and identifying the extreme urgency provision of the applicable
trade agreements being invoked and the proposed procurement strategy.
f. In some emergency cases, Canada may have to consider limiting a contractor’s liability or may have to
provide indemnification. It is the obligation of the client department to get their Chief Financial
Officer’s (CFO) approval for Limitation of Liability, even when PWGSC is acting as the contracting
authority. Section 8.5 of the TB Policy on Decision Making in Limiting Contractor Liability in Crown
Procurement Contracts (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12038&section=text) states the following:
When an emergency arises where a limitation of liability or indemnification of the contractor is

justified, and where a delay to seek approval of the limitation or indemnification would be injurious to
the public interest, the contracting authority is to obtain, at a minimum, a preliminary approval from its
departmental senior financial officer, or his or her delegate, before entering into the contract.
Departments are to include the financial assessment as well as all the limitation or indemnification
details in the report that is sent to the Treasury Board of Canada Secretariat (TBS) within 60 days of the
authorization or beginning of the work. The departmental senior financial officer or his or her delegate
is to approve this report.
g. Contracting officers must report on the details of the use of the emergency contracting authority to the
TB Secretariat within 60 calendar days of the use of the authorization or beginning of the work. The
Treasury Board Contracts Directive (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text#appC)
requires that the report should contain as a minimum the following:
i. detailed information about the circumstances of the emergency situation;
ii. the type and total value of the awarded contract;
iii. the reason(s) why the bidding requirements were not practical or permissible;
iv. the department or agency’s delegated contracting authority level at which the emergency contract
entry was approved.
h. Ratification of emergency contracts

Treasury Board approval is required for any emergency contract over $15 million. If an emergency
contract exceeding $15 million is entered into, ratification of the contract must be sought from the
Treasury Board as soon as possible. If a contracting authority uses the emergency contracting authority
in error, ratification would also be required when the contract value exceeds the departmental basic or
exceptional limits. The Treasury Board submission for ratification is to be submitted in addition to the
report detailing the emergency contract.
i. For emergency procurements subject to Comprehensive Land Claims Agreements (CLCAs), contracting
officers should contact the Acquisitions Program Policy Directorate (APPD) by email at
TPSGC.RCNDGAERTGSAEA-NCRABCLCAPSAB.PWGSC@tpsgc-pwgsc.gc.ca for assistance with
determining how a CLCA may affect the overall procurement strategy. See section 9.35 Comprehensive
Land Claims Agreements (CLCAs) for additional information.
3.22.5 Exceptions to Processes when an Emergency

(2016-04-04)
a. With respect to the Vendor Performance Corrective Measure Policy (VPCMP), an exception may be
made in accordance with section 8.180.25 Exceptions.
b. With respect to the Integrity Provisions (see section 3.51 Integrity Overview), contracting officers must
verify with the Registrar of ineligibility and suspension (http://www.tpsgc-pwgsc.gc.ca/ci-if/registraire-registrar-
eng.html) (the Registrar) that the supplier is not ineligible to be awarded a contract. Where the emergency
is occurring after hours and the Registrar is not available, contracting officers should make reasonable
effort to consult the public Ineligibility and Suspension List (http://www.tpsgc-pwgsc.gc.ca/ci-if/four-inel-
eng.html) prior to awarding the contract and complete the verification process the following day. If a
contract has been awarded to an ineligible supplier as a result of an emergency, contracting officers must
contact the Acquisitions Program Integrity Secretariat at TPSGC.DGAIntegrite-
ABIntegrity.PWGSC@tpsgc-pwgsc.gc.ca for instructions on how to notify the Departmental Oversight
Branch (DOB) that a contract was awarded to an ineligible supplier.
3.22.10 Emergency Requirements (Government Departments and Agencies)

(2013-03-21)
a. Part III of the Treasury Board Contracts Directive (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?

id=14494&section=text#appC) allows that any department or agency may enter into and amend a contract up
to a total value of $1 million (including amendments and all applicable taxes including GST or HST) in
response to a pressing emergency requirement. The most senior official available should approve such
contracts. It is important to verify each department’s internal delegation and implementation policies
before applying these instructions.
b. The Treasury Board Contracts Directive (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text#appC)

also contains the following exceptional emergency contracting authorities:
i. the Minister responsible for the Canadian International Development Agency (CIDA) - $4 million
for an international assistance program or project;
ii. the Minister of the Department of National Defence (DND) - $5 million for fuel, food, water and
transportation services during urgent deployments of Canadian Forces units, under authorized
operational orders, in situations where there will be significant human and/or financial risk; and
iii. the Minister of the Department of Foreign Affairs and International Trade Canada (DFAIT) - $15
million for services contracts related to Chanceries in response to a pressing emergency and/or
national security related to threats to Canadian missions abroad and where there is significant
human and/or financial risk.
iv. the Minister of Fisheries and Oceans - $10 million in response to pressing emergencies caused by
oil spills, in situations where there will be significant human and/or financial risk.
c. The emergency contracting authority listed under paragraphs b. ii., iii., and vi. can be used only if all of
the following criteria are met:
i. the national security exception or extreme urgency provision of each applicable trade agreement
has been invoked;
ii. the requirement cannot be satisfied by normal contracting procedures due to the urgency of the
situation; and
iii. the Minister of the applicable department approves the use of the special authorities.
d. If the requirement is covered under a Standing Offer (SO) the client may issue a call-up only in
accordance with call-up limitations specified in the SO. If the requirement exceeds the call-up
limitations, the client should contact PWGSC to handle the call-up on its behalf.
e. If the requirement is not covered under an SO, then the procurement may be handled by the client
department if it is within their emergency contracting authority. For a procurement that falls outside of
the client's emergency contracting authority, the client should immediately contact PWGSC and then
send a requisition to PWGSC for the procurement. The client must clearly specify the technical
requirement and should provide, as soon as possible, the sourcing and availability information if they
know it, and substantiation for the emergency requirement as per subsection 3.22 e.
f. Details of the use of emergency contracting authority must be reported by the client departments to the
TB Secretatriat within 60 calendar days of the use of the authorization or beginning of the work, as per
instructions found at subsection 3.22 g. This applies to all client departments issuing contracts under
their emergency delegated authority and all PWGSC Branches that issue contracts under the PWGSC
Minister’s $1 million emergency delegation.
g. For ratification of contracts see subsection 3.22 h.
h. For emergency procurements subject to Comprehensive Land Claims Agreements (CLCAs), see
subsection 3.22 i.
3.22.15 Additional Considerations on Managing Emergency Requirements

(2013-03-21)
It is important to understand that one should not be too restrictive during an emergency and should let the
requirement and timeline dictate the process to some degree. The following should be considered by contracting
officers before an emergency occurs to help mitigate risk and loss during what may be a very stressful time, and
to facilitate procurement when it is critical to be quick, calm and flexible.
a. Remain calm and focused on the issue. Refer to any departmental procedures established to facilitate
emergency contracting.
b. Create a dedicated team for emergency contracting requirements, either on an "as needed" basis or on a
more permanent scale.
c. To facilitate a speedy response, assign a liaison officer who will be the point of contact for assisting and
coordinating an organization’s resources.
d. Ensure that your team is equipped to handle an emergency by ensuring that they have the tools in place
to facilitate their duties.
e. Be available and ensure that all the key players are at all critical meetings and briefings.
f. Engage PWGSC early in the process (client departments).
g. Maintain an open line of communication with all stakeholders.
h. Immediately identify the most senior official available to approve a contract when using the
department’s own $1 million emergency authority (client departments).
i. Brief senior management often and document any decisions and deviations to the process.
j. Identify specialists within your department who may be useful such as legal services, policy advisors,
financial analysts, risk management advisors, commodity experts, etc.
k. Establish and collaborate with contacts in other government departments and other levels of government
such as provincial and territorial.
l. Establish a process for quick buys including fast tracking approvals.
m. Consider new and innovative solutions.
n. Reduce the risk and be prepared.
3.25 Trade Agreements Tendering Approaches

(2017-09-21)
a. The government achieves competitive contracting through two sourcing methodologies, which include:
electronic bidding through an open bidding process, and traditional bidding using suppliers lists.
b. The three tendering approaches under the trade agreements are:
i. Open Tendering: Where a Notice of Proposed Procurement (NPP) is advertised and, any supplier
may submit a bid;
Open Tendering is the preferred approach.
ii. Selective Tendering:
A. involving the use of a one-time list of qualified suppliers:

This is a two stage procurement where potential suppliers express an interest in
participating and meet predetermined qualifications for participation publicized in the NPP
at the first stage. Tender documentation is issued to those suppliers meeting the
qualifications at the second stage. For the North American Free Trade Agreement
(NAFTA), Canada-European Union Comprehensive Economic and Trade Agreement

(CETA) and the World Trade Organization Agreement on Government Procurement (WTO-
AGP), an NPP must be published at both stages of the procurement (it is also acceptable to
amend the original NPP once the tender closing date has been determined). Any supplier
who wishes to bid at the second stage may do so, as long as there is sufficient time to carry
out the qualification process;
B. involving the use of a permanent list of qualified suppliers *:

This is where a source list is developed and maintained and qualified suppliers for the
product or service in question are issued the bid documentation. Any other potential
supplier who requests bid documentation must be considered. For NAFTA, CETA, WTO-
AGP, Canadian Free Trade Agreement (CFTA), and the Agreement on Internal Trade
(AIT), an annual notice of the existence of the source list must be published (use the NPP
form). For AIT, when using a source list, all qualified suppliers in a given category on a
source list must be invited to bid for all procurement in that category. For CFTA, when
using a source list, all qualified suppliers in a given category on a source list must be
invited to participate in a procurement, unless the procuring entity states in its request for
prequalification any limitation on the number of suppliers that will be permitted to tender
and the criteria for selecting the limited number of suppliers.
iii. Limited Tendering: A process that allows for deviations from the above procurement practices. In
situations, where a specific limited tendering justification can be applied, limiting the number of
suppliers, to one or more suppliers, is allowed. While limited tendering is often used for sole
source procurements, it can also be used in competitive procurements.
*A permanent list of qualified suppliers is also known as a source list.
c. For the procedure for publication on GETS, see 4.75.20 Procedure for Publication of Notice of
Proposed Procurement on GETS. In addition to the above, specific government enterprises (Crown
corporations) subject to NAFTA, Annex 1001.1a-2 Government Enterprises, may use a notice of
planned procurement to advertise potential procurements. This notice is normally published at the start
of a fiscal year and lists potential procurements for the enterprise in the upcoming fiscal year.
A response from potential suppliers to a notice of planned procurement is not required.
The notice of planned procurement may also be used as a notice regarding a qualification system. When
used in this manner, a response from suppliers would be required. Tender documentation is issued to
those suppliers meeting the qualifications.
3.30 Methods of Supply

(2011-05-16)
a. Public Works and Government Services Canada ( PWGSC) uses a variety of approaches to meet
procurement requirements. This spectrum ranges from specific contracts which precisely define the
deliverables to be provided to a specific client by a specific date, to various procurement instruments for
use by a single or many departments and agencies, for needs which are sometimes less well defined at
the outset.
b. There are essentially three methods of supply for procuring goods and services, which are:
i. contracts (including contracts with task authorizations);
ii. standing offers, and
iii. supply arrangements.
c. The contracting officer, in consultation with the client, chooses the method of supply that best satisfies
the client's requirements.
d. For additional information on when to use a contract (including contracts with task authorizations), a
standing offer or a supply arrangement, see 3.35 Contracts, 3.40 Standing offer method of supply and
3.45 Supply arrangement method of supply. Contracting officers should also consult the comparison
table in Annex 3.8: Comparaison of Different methods of Supply to assist them in determining which
method of supply should be used when the precise nature, quantity and/or timing of the need cannot be
set out in advance.
3.35 Contracts
(2011-05-16)
a. Contracts for goods, services and construction are generally used to meet unique, well defined
requirements for a single client but they may also be used to meet the requirements of more than one
client. They are used where a standing offer or supply arrangement is not warranted.
b. For more information on the required content of a contract, see Chapter 4 - Solicitation Process.
3.35.1 Contracts with Task Authorizations

(2010-01-11)
3.35.1.1 Definition
(2011-05-16)
a. A contract with Task Authorizations (TAs) is a method of supply for services under which all of the
work or a portion of the work will be performed on an "as and when requested basis" through
predetermined conditions including an administrative process involving task authorizations. Contracts
with TAs are used in service contracting situations when there is a defined need by a client to rapidly
have access to one or more categories of service(s) that are expected to be needed on a repetitive basis
during the period of the contract. Under contracts with TAs, the work to be carried out can be defined
but the exact nature and timeframes of the required services, activities and deliverables will only be
known as and when the service(s) will be required during the period of the contract. The contract with
TAs must stipulate the conditions for issuing TAs. A TA is a structured administrative tool enabling
PWGSC or a client to authorize work by a contractor on an "as and when requested" basis in accordance
with the conditions of the contract. TAs are not individual contracts.
3.35.1.5 Application
(2011-05-16)
a. Contracts with TAs may be used for service requirements such as:
i. Professional Services;
ii. Informatics Professional Services;
iii. Technical Investigation and Engineering Studies;
iv. some types of Repair and Overhaul (R&O) services where work authorizations issued are
considered task authorizations, i.e. Additional Work Requirements (AWR); Mobile Repair Party
(MRP); Special Investigations and Technical Studies (SITS); Project Work Order (PWO).
b. Contracts with TAs are not to be used for shipbuilding or ship refits. Nor are they to be used for those
R&O work authorizations that are not considered task authorizations, i.e. Selection Notice and Priority
Summary (SNAPS); Repairable Materiel Request (RMR); Quartermaster Transfer Orders (QTO); and
Vehicle Movement Orders (VMO).
c. Although TAs are used for service requirements, they may be used to purchase incidental goods that are
related to a specific service requirement when these goods will later become the property of the
government. When this incidental acquisition of goods will be necessary, the Contract Planning and
Advance Approval (CPAA) form or procurement plan (see 3.35.1.15) and the solicitation and resulting
contract must address the conditions for this incidental acquisition of goods, with appropriate limitations
defined. TAs must not be used to have the contractor acquire goods on behalf of the client that are
outside the scope of the work in order to circumvent the normal procurement process. For instance, a
contract with TAs for engineering services cannot be used to purchase software unless this requirement
was part of the original solicitation and the related payment provisions of the contract.
d. Directors may approve or prohibit classes of procurement in which TAs may be used.
3.35.1.10 Conditions of Use

(2011-05-16)
a. (a) Contracts with task authorizations that are improperly used can lead to major problems between the
government and its suppliers, between PWGSC and its clients, and for the government in the eyes of the
public. When a contract with TAs is being considered as a method of supply for a particular
procurement, before seeking approval for the procurement strategy, the contracting officer must follow
all the applicable procedures detailed in 3.35.1 Contracts with Task Authorizations. In instances when
the TAs are issued only by PWGSC, some of these procedures may not apply (i.e. roles and
responsibilities, setting client limits for issuing TAs, the guide for PWGSC's clients, the Record of
Agreement, some reporting requirements).
b. As conditions of use of contracts with TAs, the contracting officer must:
i. ensure the contract with TAs is the appropriate method of supply for these services. (Refer to
3.35.1.5 Application and Annex 3.8: Comparaison of Different methods of Supply attached, and
other sections relative to methods of supply included in the Supply Manual).
ii. decide whether to allow the client to issue TAs, and determine the financial limits for issuing TAs
by clients. These decisions should be made by PWGSC in consultation with the client in
accordance with 3.35.1.30 Setting financial limits on Individual Task Authorizations.
iii. provide the client the Guide for Preparing and Administering Task Authorizations – for PWGSC's
Clients ( Annex 3.4.1: A Guide to Preparing and Administering Task Authorization for PWGSC
Clients) with an explanation of its purpose and discuss as required.
iv. reach an agreement with the client regarding the roles and responsibilities of both organizations,
including responsibilities for reporting. In this regard, the use of the Record of Agreement
template pertaining to the use of Task Authorizations ( Annex 3.4.2: Record of Agreement
Template – for PWGSC Clients) is strongly encouraged. The agreement must include the
provision for timely receipt of documentation such as:
A. copies of all TAs with their attachments;
B. copies of all revisions to TAs with their attachments;
C. copies of all claims/invoices, supported by reports.
v. follow the procedures detailed in 3.35.1.15 Approval Documents for Contracts with Task
Authorizations to 3.35.1.60 Reporting.
vi. discuss, as required, the use of contracts with TAs with the client, in particular the administrative
process for authorizing and issuing TAs.
3.35.1.15 Approval Documents for Contracts with Task Authorizations

(2011-05-16)
a. For contracts with TAs, the Contract Planning and Advance Approval (CPAA) form or procurement
plan for a contract with TAs must address the following, as applicable:
i. the reasons why the services are deemed suitable for this method of supply.
ii. the justification for the proposed financial limits for issuing TAs by clients.
iii. a statement confirming that the Guide to Preparing and Administering Task Authorization for
Public Works and Government Services Canada Clients was provided, and discussed with the
client, as required.
iv. a statement confirming that an agreement was reached with the client regarding roles and
responsibilities of both organizations or a statement confirming the client's commitment to
reaching such an agreement before issuance of the bid solicitation.
v. a statement confirming that discussions took place with the client on the use of contracts with
TAs, before the client authorizes the first task.
vi. a description of the contract monitoring process and activities to be implemented or carried out.
b. See Chapter 6 for additional instructions on the use and preparation of the CPAA form or procurement
plan.
c. The approval authority for contracts with TAs, and for amendments which will amend the provisions of
a contract with TAs, is in accordance with the approvals and authorities for contracts detailed in Chapter
6.
3.35.1.20 Bid solicitations and resulting contract documents

(2017-08-17)
a. Contracting officers must ensure that the bid solicitation and resulting contract document(s) that they
issue and use to establish the subsequent contract with task authorizations follow the standard approach
for issuing solicitations (refer to Chapters 3 and 4). For any portion of work to be performed on an "as
and when requested" basis, the bid solicitation and the resulting contract document must include the
following:
i. a clear Statement of Work (SOW) describing, in broad terms, the scope of work that will be
performed pursuant to issued TAs.
ii. a description of the administrative process for authorizing and issuing TAs and all applicable
SACC Manual clauses relative to TAs. In the case of multiple contracts with TAs, the evaluation
portion of the solicitation must include the contractors' order of ranking process (generally as part
of the basis of selection clause) and, the resulting contract portion must include the contractors'
order of ranking and the work allocation process (to be completed at the time of contract award).
The following SACC Manual clauses relative to Task Authorizations (TAs) must be used for all
clients, as applicable: B9030C, B9031C, B9051C, B9053C, B9054C, B9056C, C9010C and
C9011C.
iii. the task authorization limits for authorizing and issuing TAs by the client in accordance with the
guidance in 3.35.1.30 Setting financial limits on Individual Task Authorizations.
iv. the applicable form for authorizing and issuing TAs. Refer to section 3.35.1.25 Forms for further
guidance
v. the payment provisions applicable to the TA such as basis or bases of payment (for example,
SACC Manual clauses C0204C and C0209C) and method(s) of payment. Consult section 4.70.20
Basis of payment of the Supply Manual for more information.
vi. Canada's obligation and Canada's total liability:
A. when all the work under a contract will be performed through TAs:
1. the SACC Manual clause B9030C must be used to limit Canada's obligation for TAs
and to provide a minimum work guarantee to the Contractor; and,
2. the SACC Manual clause C9010C must be used when the contract with TAs is
subject to a Limitation of Expenditure to limit Canada's total liability under the
contract for all approved TAs. The "Total estimated cost" shown on the cover page of
the contract document must equal the total of the limitation of expenditure stipulated
under the clause.
B. when only a portion of the Work will be performed through task authorizations:
1. the SACC Manual clause B9031C must be used to limit Canada's obligation under
the task authorizations; and,
2. the SACC Manual clause C6001C must be used when the contract with TAs is
subject to a Limitation of Expenditure to limit Canada's total liability under the
contact. The "Total estimated cost" shown on the cover page of the contract
document must equal the total of the limitation of expenditure stipulated under the
clause.
b. Contracting officers are responsible for monitoring the use of TAs, they must also consider including a
provision for reporting of usage of TAs by the contractor (i.e. SACC Manual clause B9056C). Also
refer to section 8.70.20(b) Administration of Contracts with Task Authorizations for details on
administration of contracts with task authorizations.
3.35.1.25 Forms
(2013-11-06)
The contracting officer should use the form PWGSC- TPSGC 572 Task Authorization, for the authorization
of tasks by both PWGSC and clients other than the Department of National Defence (DND). This form is
available through the PWGSC Forms Catalogue Web site. Alternatively, any locally developed and approved
task authorization forms may be used for non-DND contracts. The form DND 626 Task Authorization must be
used in contracts for DND . Forms PWGSC- TPSGC 942 (Call-up against a Standing Offer), PWGSC-
TPSGC 1379 (Work Arising or New Work), and GC 111 (Purchase Order) must not be used as a task
authorization form in a contract with TAs.
3.35.1.30 Setting financial limits on Individual Task Authorizations

(2013-01-28)
a. Task authorizations may be authorized and issued by the client and/or PWGSC. PWGSC contracting
officers who have been delegated services contract approval and signing authority have no maximum
limit on the dollar amount for authorizing individual TAs up to the total approved contract value, unless
directed otherwise by their management. The decision to allow TAs to be issued by a client is made by
PWGSC in consultation with the client. When the client will be allowed to authorize TAs, the PWGSC
contracting officers must establish a maximum limit on the dollar amount of a TA (including Goods and
Services Tax (GST) or Harmonized Sales Tax (HST)) authorized by the client. In establishing such
limits for individual TAs and any revisions to those TAs, contracting officers should seek to achieve a
balance between operational effectiveness and contract risk management, and should consider the
following when setting the client's TA limit:
i. whether an agreement has been reached between the client and PWGSC on the conditions of use
of TAs. (See 3.35.1.10 Conditions of Use).
ii. the client and the industry's past performance history relative to the effective use of contracts with
TAs, as experienced by the contracting officer and PWGSC colleagues/managers.
iii. the procurement/contract management expertise that exists in the client department:
A. Whether training is available/required.
B. Whether the client department policies and procedures are in place and whether these are
enforced. For example, the internal procedure for the administration of TAs for the
Department of National Defence (DND) is contained in article 3.3.2 of DND's Procurement
Administration Manual (PAM).
iv. operational requirements, e.g. time sensitivity of tasks.
v. contract scope and risk associated with individual tasks:
A. The clarity and level of detail in the contract statement of work.
B. Anticipated complexity and duration of individual tasks.
C. Whether tasks can be easily priced.
D. The average value of TAs, the frequency of tasks and the number of tasks anticipated
during the period of the contract.
vi. as applicable, the total estimated value of work that will be carried out through the portion of the
work that is not performed through TAs in relation to the total estimated value of work that will
be performed through TAs.
vii. the frequency of reporting on task authorizations.
b. Furthermore, in setting the value at which PWGSC must authorize individual TAs, contracting officers
must ensure that this PWGSC involvement will add value to the task authorization process while at the
same time ensuring that PWGSC maintains adequate control over the TA process. Added value can be
in several forms, such as financial oversight or comparisons with similar contracts for other clients to
ensure value for money. Setting the client's TA limit should be subject to a department's experience in
administering TAs and contracting officers may want to consider setting a limit such that PWGSC
authorizes a representative amount of TAs.
3.35.1.35 Separation of Duties

(2011-05-16)
The Treasury Board Directive on Delegation of Financial Authorities for Disbursements (http://www.tbs-
sct.gc.ca/pol/doc-eng.aspx?id=17060) requires that the authority to enter into contract or amendment must be separate
from the certification authority required under section 34 of the Financial Administration Act. In Chapter 3 of
the 2008 December Report of the Auditor General of Canada (http://www.oag-
bvg.gc.ca/internet/English/parl_oag_200812_03_e_31827.html) , the Office of the Auditor General raised the issue of
separation of duties with respect to task authorizations and stated that combining procurement and certification
functions under the responsibility of one individual was not in keeping with the Treasury Board Policy on
Delegation of Authorities. As a result, although task authorizations are not individual contracts, PWGSC applies
the principle of separation of duties to task authorizations issued for PWGSC's own needs; i.e. the PWGSC
individual who signs the task authorization must not also certify the associated invoices. In its Guide to
Preparing and Administering Task Authorization for Public Works and Government Services Canada Clients,
PWGSC recommends this practice to all its clients. However, as specified in the above-mentioned TB
Directive, where the client's current processes in place or other circumstances do not allow such separation of
duties, alternate control measures may be implemented by the client. The client is responsible to ensure that its
current processes or alternate control measures can withstand scrutiny under audit.
3.35.1.40 Authorizing and Issuing Task Authorizations

(2016-04-04)
a. The client organization authorized to issue tasks to the contractor is responsible for authorizing and
issuing TAs in accordance with the process detailed in the contract. As a minimum, the client
organization is responsible for:
i. ensuring the work requirement of the TA including the deliverables and the schedule, as
applicable, is in accordance with the scope of the contract.
ii. providing the contractor with the task description, the payment provisions and obtaining the level
of effort, as applicable.
Setting dates or timeframes for completing tasks must take into consideration the expiry date of
the contract. A task must be completed on or before the expiry date of the contract, however, if a
task cannot be completed by such date, a contract amendment to extend the contract period to the
task completion date must be issued by the contracting officer before the TA can be issued.
iii. finalizing the task authorization, including the total value of the TA (GST/HST extra), in
accordance with the contract.
iv. obtaining all applicable signatures (client, or PWGSC, or both, as applicable; and contractor), and
the date of these signatures on the TA.
b. Integrity Provisions
i. Once verification is completed as per section 5.16 Integrity Compliance, contracting officers
should ensure that the integrity verification result is in the procurement file for any subsequent
transaction with that supplier.
ii. During the contract period, where a supplier has been identified as not complying with the
Integrity Provisions of the contract (see section 5.16), contracting officers must request direction
from Acquisitions Program Integrity Secretariat (APIS), by e-mail at TPSGC.DGAIntegrite-
ABIntegrity.PWGSC@tpsgc-pwgsc.gc.ca.
3.35.1.45 Administration of the Task Authorizations by Public Works and Government

Services Canada's Clients
(2011-05-16)
For details, see Annex 3.4.1 Guide to Preparing and Administering Task Authorization for Public Works and
Government Services Canada Clients.
3.35.1.50 Revision of a Task Authorization by the Client

(2011-05-16)
a. The client may revise a TA that it originally authorized subject to the work being within the scope and
value of the contract as well as within the client authority limit set in the contract. Any revision to the
TA is subject to concurrence by the contractor. A TA revision, which will bring the TA value above the
client TA limit, must be referred to the contracting officer.
b. An authorized TA may be revised to either reduce an activity (or activities) or to cancel the task in its
entirety, however a TA cannot be revised to terminate a task. In situations when the contractor is in
default or for the convenience of Canada, the termination provisions of the applicable general conditions
will apply and the contract may be terminated either entirely or in part for default or for convenience.
Such matters must be referred to the PWGSC contracting officer.
3.35.1.55 Monitoring and Oversight

(2011-05-16)
a. Contracting officers must monitor issued TAs to ensure they comply with the contract conditions. They
must also review progress reports to ensure the work is being performed in accordance with the contract
and the issued TAs and to monitor the amount expended against the contract value.
b. If the monitoring of the authorized and issued TAs demonstrates that the TA process is not in
accordance with the contract or the agreement with the client, the specific corrective measures must be
implemented. This is addressed in the Record of Agreement template in Annex 3.4.2, paragraph 5. The
contracting officer must notify the contractor when the limit of the client's authority specified in the
contract is reduced or revoked. Furthermore, invoking penalty or termination provisions should not be
undertaken without consultation with Legal services.
3.35.1.60 Reporting of Contracts with Task Authorizations

(2013-06-27)
Contracting officers must report on contracts with Task Authorizations (TAs), or amendments thereto. See
7.70.35 Contracts with Task Authorizations - Coding for details.
3.40 Standing offer method of supply

(2015-09-24)
a. A standing offer (SO) is an offer from a supplier to Canada that allows Canada to purchase goods and/or
services, or a combination of goods and services, as and when requested, during a specific period of
time, through the use of a call-up process which incorporates the conditions and pricing of the standing
offer.
b. A standing offer itself is not a contract. A separate contract is formed each time a call-up for the
provision of goods and/or services is made against a standing offer. When a call-up is made, it
constitutes an unconditional acceptance by Canada of the supplier's offer for the provision, to the extent
specified, of the goods and/or services described in the standing offer. Canada's liability is limited to the
actual value of the call-ups made by the identified user(s) within the period the standing offer is valid.
c. This method of supply is used to satisfy the requirements of departments and agencies for a specified
period, when precise details on expected quantities for the period are not known in advance. Standing
offers may authorize one or more clients to issue call-ups for goods or services directly to offerors up to
the maximum call-up limits indicated in the standing offer. If so stated in the standing offer, PWGSC
may issue call-ups above the client call-up limit.
d. For a description of the five types of standing offers that may be authorized, see 7.10.1 Standing Offers.
e. A standing offer may be valid for one or more years. The selection of the appropriate time period is a
process that varies significantly by individual commodity.
f. The quantity of goods and/or level of services specified in the Request for Standing Offers (RFSO) and
the resulting standing offer(s) are only an approximation of the requirements given in good faith by
Canada to the offerors.
g. All government policies, regulations and procedures related to contracting, including those required
under the trade agreements, apply to the standing offer method of supply.
h. The total estimated expenditure of the requirement (the anticipated total value of all accumulated call-
ups) proposed to be satisfied by the standing offer method of supply, Goods and Services
Tax/Harmonized Sales Tax (GST/HST) included, must be used to determine the applicability of any
procedures required by any trade agreement to which the Government of Canada is signatory. If it is
intended to issue more than one standing offer against the RFSO, the sum of the total estimated value,
GST/HST included, of all resulting standing offers must be used to obtain approval.
i. Contacting officers should consider using a standing offer where appropriate considering the advantages
and disadvantages of the approach:
A. Advantages of a standing offer method of supply may include:
1. improved client service (with a standing offer in place, clients can place orders quickly);
2. reducing the risk of overestimating the need.
B. Disadvantages of a standing offer approach may include:
1. supply that is not guaranteed at that price since the offeror may withdraw;
2. prices that may be less competitive.
j. Standing offers may be either competitive (see Standard Acquisition Clauses and ConditionsManual
standard instructions 2006) or non-competitive (see standard instructions 2007) in nature.
k. For more information on the competitive solicitation process for RFSOs, see Chapter 4 - Solicitation
Process.
l. A standing offer may be directed on a non-competitive basis to one offeror for its full range of catalogue
goods or services. The non-competitive approval authorities would then apply.
m. The standing offer is usually considered for goods and services when:
A. One or more clients repetitively order(s) the same range of goods, services, or both, and the actual
demand (for example, quantity, delivery date, delivery point) is not known in advance;
B. Some of the following conditions are present:
1. the goods, services, or both are well defined;
2. pre-arranged prices or a prearranged pricing basis can be established at the outset, usually
through competition, and there is no need nor any intention to negotiate them at the time of
the call-up;
3. the goods and services, or both are readily available and are to be ordered (requested
through a call-up), if and when the requirements arise, and
4. at the time of the call-up, there is no need, nor any intention to further negotiate contractual
terms and conditions.
n. The standing offer method of supply cannot be used when:
A. prices, pricing basis or conditions are not stated, or are subject to change at any time at the
discretion of the supplier;
B. the identified users of the standing offers intend to negotiate further the prearranged prices,
pricing basis, or conditions of the standing offer, or
C. it is intended to solicit bids each time goods or services are required. In these cases, another
method of supply such as a supply arrangement should be considered.
o. Departments and agencies are authorized by PWGSC to make call-ups against each standing offer, as
defined in the standing offer. See paragraph (a) under subsection 4.10.20.1 Standing Offer Procedures.
p. When procedural requirements of any trade agreement apply to a standing offer method of supply, the
complete procurement process, including all standing offers authorized for use and the resulting call-
ups, fall within the purview of the Canadian International Trade Tribunal.
q. If the Request for Standing Offer (RFSO) and resulting contract involving the goods or services being
offered include a security requirement, contracting officers should consider how security requirements
will be managed, (i.e. what are the base security requirements and how different security requirements
such as Information Technology (IT), Production and/or COMSEC are managed). The contracting
officer must ensure that a contract resulting from an Standing Offer contains the proper security
requirements and that the client is aware of its responsibility in the confirmation of the actual security
status of the organization/personnel prior to issuing the call-up.
IMPORTANT: When security clearances such as IT, Productions and/or COMSEC are required, seek
assurance of these specific security types from the Canadian Industrial Security Directorate (CISD) as
they are contract specific and not blanket clearances held by the organizations.
r. For information related to approval authorities when using a Standing Offer, refer to 4.10.20.5 Ranking
and Methodology for Standing Offers
3.45 Supply arrangement method of supply

(2017-09-21)
a. A supply arrangement (SA) is a non-binding arrangement between Canada and a pre-qualified supplier
that allows departments and agencies to award contracts and solicit bids from a pool of pre-qualified
suppliers for specific requirements within the scope of the SA.
b. An SA is not a contract for the provision of the goods and services described in it and neither party is
legally bound, as a result of signing a supply arrangement alone. The intent of a supply arrangement is
to establish a framework to permit expeditious processing of individual bid solicitations, which result in
legally binding contracts for the goods and services described in those bid solicitations.
c. An SA may be used when:
i. the overall requirement cannot be clearly defined at the outset and it is proposed to establish a
pool of screened suppliers from which clients and PWGSC solicit bids for individual
requirements;
ii. a commodity is procured on a regular basis (goods or services);
iii. a standing offer is not suitable, due to variables in resulting call-ups (e.g. varying methods/basis
of payment, or the statement of work or commodity cannot be adequately defined in advance);
iv. a simplified solicitation, undertaken by users/clients, can be used to obtain competitive bids from
the pre-qualified suppliers;
v. selection will be based on best value, as described in the SA and the subsequent solicitation; and
vi. it is more efficient for PWGSC to operate as the provider of the framework on behalf of other
users/clients and not as the contracting authority.
d. Supply arrangements are generally issued following a Request for Supply Arrangement process. For
more information on the solicitation process, see Chapter 4 - Solicitation Process. When developing the
procurement strategy, contacting officers should consider the following:
i. if national and international trade agreements apply to the solicitation (see 3.50 Procurements
Subject to Trade Agreements);
ii. whether or not ceiling prices will be included in the SAs;
iii. how security requirements will be managed (i.e. what are the base security requirements and how
are different security requirements managed.). The contracting officer must ensure that a contract
resulting from an SA contains the proper security requirements and that the client is aware of its
responsibility in the confirmation of the actual security status of the organization/personnel prior
to issuing the contract;
IMPORTANT: When security clearances such as IT, Production and/or COMSEC are required,
seek assurance of these specific security types from the Canadian Industrial Security Directorate
(CISD) as they are contract specific and not blanket clearances held by the organizations.
iv. how the use of the SA will be monitored and reported.
e. Each SA should contain clear instructions on how to use the SA and identify which departments and
agencies can use them.
f. A requirement that would normally be covered by the trade agreement is still covered when solicited or
contracted through the use of a supply arrangement method of supply.
i. The use of this method of supply is considered selective tendering under the North American Free
Trade Agreement, Canada-European Union Comprehensive Economic and Trade Agreement and
the World Trade Organization Agreement on Government Procurement. Therefore, a Notice of
Proposed Procurement (NPP) must be posted for each separate procurement under a supply
arrangement (SA) that is over the relevant trade agreement threshold and to provide the time
periods required by the agreements. For more information, see 4.10.25.5 International Trade
Agreements and Use of Supply Arrangements and 4.10.25.10 Ongoing Qualification Process.
ii. The use of this method of supply is considered to be the use of a source list under the Agreement
on Internal Trade (AIT). The AIT does allow the use of source lists without publication of a
separate NPP for each requirement, provided that all suppliers on the source list are invited to bid
and that suppliers be able to get on the list at any time.
iii. The use of this method of supply is considered to be a standing arrangement under the Canadian
Free Trade Agreement (CFTA). For standing arrangements under the CFTA, the procuring entity
must indicate how subsequent purchases will be made from a supplier when issuing the call for
the standing arrangement.
3.50 Procurements Subject to Trade Agreements

(2012-01-18)
3.50.1 General procurement

(2017-09-21)
a. For procurements subject to the North American Free Trade Agreement (NAFTA), the Canada-
European Union Comprehensive Economic and Trade Agreement (CETA), the World Trade
Organization Agreement on Government Procurement (WTO-AGP), the Canadian Free Trade
Agreement (CFTA), the Agreement on Internal Trade (AIT), or a combination of these, public
advertisement/notification provisions specified within these trade agreements must be followed. This
includes any mini-tenders for procurements made against a supply arrangement. The procedures to be
followed are generally consistent for all of the agreements. When there are inconsistencies, the
contracting officer must select the provisions that demonstrate the highest example of openness, for
example, the longer of two solicitation periods.
b. The provisions for public advertisement/notification are described in each of the following trade
agreements:
i. North American Free Trade Agreement, Article 1010: Invitation to Participate;
ii. Canada-European Union Comprehensive Economic and Trade Agreement, Article 19.6: Notices
texte/19.aspx?lang=eng) ;
iii. World Trade Organization - Agreement on Government Procurement, Article IX: Invitation to
Participate Regarding Intended Procurement (http://www.wto.org/english/docs_e/legal_e/gpr-
94_01_e.htm#articleIX) ;
iv. Canadian Free Trade Agreement, Article 506: Tender Notices;
v. Agreement on Internal Trade, Article 506: Procedures for Procurement (http://www.ic.gc.ca/eic/site/ait-

aci.nsf/eng/il00006.html#G) , paragraph 2. (referred to as a "call for tenders")
c. For more information on determining when the trade agreements (NAFTA, CETA, WTO-AGP, CFTA,
AIT) apply, see Chapter 1 - Public Procurement.
d. With certain exceptions, competitive procurements subject to NAFTA, CETA, WTO-AGP, CFTA or
AIT must be advertised on the Government Electronic Tendering Service (GETS) through the
Buyandsell.gc.ca Tenders site. In appropriate circumstances, potential suppliers may be contacted
directly after the notice has been posted, in accordance with the procedures outlined in 4.75.35
Contacting Suppliers Directly During the Solicitation Period.
3.50.5 Applicability of Trade Agreements to Standing Offers and Supply Arrangements

(2017-09-21)
a. Contracting officers must determine whether any or all of the trade agreements apply to each
procurement.
b. The applicability of the trade agreements (NAFTA, CETA, WTO-AGP, CFTA or AIT) to standing
offers and supply arrangements depends on three factors:
i. if the department for which the standing offer or supply arrangement is intended is subject to the
agreements;
ii. if the good or service is subject to the agreements; and,
iii. if the total estimated value of all the call-ups (contracts) against a standing offer or all contracts
under a supply arrangement (which determines the total estimated value of the offer or
arrangement) is above the NAFTA, CETA, WTO-AGP, or CFTA or AIT thresholds.
c. The total estimated value is determined before tendering, at which time it is identified whether or not
any of the trade agreements apply. If they do apply, SO s and SA s are solicited in accordance with the
agreements.
d. Subsequent individual call-ups/contracts cannotbe made under the standing offer/supply arrangement
without considering trade agreement applicability, and may be subject to a challenge directed to CITT
by suppliers.
e. For more information on trade agreements and the use of supply arrangements, see
4.10.25.5 International Trade Agreements and Use of Supply Arrangements to 4.10.25.20 Ongoing
Qualification Process.
3.51 Integrity Overview

(2016-04-04)
a. To strengthen the integrity of procurement and to ensure that the Government does business with ethical
suppliers in Canada and abroad, the Government of Canada implemented a government-wide Integrity
Regime (http://www.tpsgc-pwgsc.gc.ca/ci-if/ci-if-eng.html) for procurement and real property transactions. The
Regime fosters ethical business practices, ensures due process for suppliers and upholds the public trust
in the procurement process. It is transparent, rigorous and consistent with best practices in Canada and
abroad, while supporting transparent competition and an ethical Canadian marketplace.
b. The Integrity Regime is administered by Public Works and Government Services Canada (PWGSC)
under the authority of the Department of Public Works and Government Services Act, the Financial
Administration Act as well as through the operation of various Memoranda of Understanding that have
been concluded with other government departments, agencies and certain crown corporations. The
Integrity Regime consists of the Ineligibility and Suspension Policy (http://www.tpsgc-pwgsc.gc.ca/ci-
if/politique-policy-eng.html) and the Integrity Provisions found in section 01 of standard instructions 2003,
2004, 2006, 2007 and 2008 and general conditions 2005, 2010A, 2010B, 2010C, 2020, 2029, 2030,
2035 and 2040 of PWGSC’s Standard Acquisition Clauses and Conditions Manual.
Note: Contracting officers should become familiar with the content of the Ineligibility and Suspension
Policy.
c. The Integrity Regime applies to supply contracts, construction contracts, real property contracts, and
service contracts. All contracts and solicitations, including those that will result in a pre-qualified list,
must include the Integrity Provisions. As the Policy is incorporated by reference, all exceptions
provided by the Integrity Regime will therefore apply. Specific exceptions provided by the Integrity
Regime are found in Section 4. Application of the Ineligibility and Suspension Policy.
d. The Government of Canada may enter into contracts with bidders, offerors or suppliers that would
otherwise be ineligible to be awarded a contract or suspended through mechanisms provided in the
Integrity Regime (i.e. Public Interest Exceptions and Administrative Agreements). Additional
information regarding Administrative Agreements and Public Interest Exceptions are provided in
Section 14. Administrative Agreements and Section 15. Public Interest Exception of the Ineligibility
and Suspension Policy (http://www.tpsgc-pwgsc.gc.ca/ci-if/politique-policy-eng.html) , as well as in Section 4.21.1
Administrative Agreements and 4.21.2 Public Interest Exception of the Supply Manual.
e. Details on the integrity process are described in the following sections:

4.21 Integrity Provisions;
4.45 Certifications and additional information;
5.16 Integrity Compliance;
6.4.1. Annex: Approval Authorities and Additional Signing Authorities in Support of Clients'
Programs Only - Other than for Canadian Commercial Corporation;
8.70.2 Compliance with the Integrity Provisions;
8.70.5 Amending Contracts; and
8.90 Assignment of Contracts.
3.55 Industrial Security Requirements (Personnel or Organization)

(2010-01-11)
Contracting officers should take into account any industrial security requirement when developing the
procurement strategy and also when determining the procurement schedule. Procurement strategy and approval
documents should identify the existence of any security requirements.
3.55.1 Security and Timelines

(2014-11-27)
a. Procurement schedules must take into account that the organization, personnel and physical security
screening processes may take a considerable length of time. The contracting officer must provide as
much lead time as possible to Canadian Industrial Security Directorate (CISD) to process organization
or personnel security screenings, as well as to give time to bidders to implement security
recommendations before contract award.
b. To be proactive with security requirements and to avoid delays in the security screening process,
contracting officers or client departments can sponsor possible bidders, if known, that are not registered
with CISD, recommend that they complete the Request for Private Sector Organization Screening
(PSOS) form and provide it to CISD ahead of time. For more information on PSOS, visit the CISD
Website. Information on how to obtain the PSOS form can be found in section 4.30.10 Industrial
Security in Contracts.
Note: If foreign-based suppliers are identified by the client when issuing the requisition, the client has to
contact CISD for applicable clauses. PWGSC contracting officers will also need to contact CISD prior
to contract award for verification of security. If security clearances are required for foreign-based
suppliers, the timeframes required to provide them could have a significant impact on the procurement
schedule.
c. Personnel Security Screening: The approximate timelines for completing a personnel security
screening are as follows:
i. Simple Reliability Status: 7 business days;
ii. Complex Reliability Status: 120 business days;
iii. Secret Clearance: 75 business days
d. Organization Security Screening: The Industrial Security Sector does not publish a specific timeline
for completing screenings such as Designated Organization Screening (DOS) or Facility Security
Clearance (FSC).
3.60 Low Dollar Value Procurements

(2013-04-25)
a. Requirements below $25,000, including all applicable taxes, are considered to be low dollar value
(LDV) procurements.
b. All LDV procurements will be conducted in accordance with the provisions of the Directive on the
Processing of Low Dollar Value Procurement (available on GCpedia - Acquisitions Program Policy
Suite (http://www.gcpedia.gc.ca/wiki/Acquisitions_Program_Policy_Suite) ).
3.60.1 Requirements
(2014-09-25)
a. When proceeding with a Low Dollar Value (LDV) requirement, contracting officers:
i. must not split or artificially divide requirements to meet the LDV threshold (see 6.1 General);
ii. must use the most efficient and cost effective approach to select a contractor, either by soliciting
bids or by directing the requirement to a sole supplier when it is not cost effective to solicit bids;
iii. must determine the most appropriate procurement strategy for each LDV requirement in order to
obtain best value and ensure the timeliness and cost effectiveness of each contract, while
respecting Public Works and Government Services Canada's guiding principles, which include
client service, competition, accountability and equal treatment (see 1.10.5 Guiding Principles);
iv. must complete a risk assessment (see 3.1.5 Procurement Risk Assessments for Complexity Level
1, 2 and 3 Procurements);
v. must document the procurement file with the rationale to support the procurement strategy, and
the basis on which the estimated value of the contract, that is, below $25,000, was established.
b. Electronic tools are available for the identification and selection of a supplier on a competitive or a
directed basis. Examples of such tools include:
i. Supplier Registration Information (SRI) system;
ii. Automated Vendor Rotation System (AVRS);
iii. SELECT;
iv. Government Electronic Tendering Service (GETS);
v. telephone and online trade directories.
3.60.5 Geographic Factors and Low Dollar Value

(2013-04-25)
This section has been removed as per ARCHIVED - Policy Notification 91R1 - Debriefings.
3.65 Green Procurement Strategy

(2010-01-11)
a. Successful implementation of the Policy on Green Procurement requires the identification and
implementation of environmental performance opportunities at both the strategic and operational levels,
taking into consideration specific departmental buying patterns, sustainable development targets and
other Government of Canada priorities.
b. In developing the procurement strategy, departments must consider opportunities to advance the
protection of the environment and support sustainable development. Contracting officers must document
the environmental considerations and decisions taken in relation to the integration of environmental
requirements.
c. For commodities under the commodity management framework, contracting officers must develop a
green procurement plan (http://www.tpsgc-pwgsc.gc.ca/app-acq/ae-gp/index-eng.html) and procurements must be
done in accordance with this plan. The completed plan serves as an example of green procurement best
practices.
d. Contracting officers can refer to Annex 2.2: Green Procurement: Environmental Factors and Evaluation
Indicators to identify those factors which need to be addressed in the procurement strategy.
e. For more information on environmental issues and mitigating actions to support the Policy on Green
Procurement, go to the Environmental Awareness Tool Kit under Developing Green Procurement
Specifications, and the section 3.2, Selection According to Technical Capacity, of the Guideline for
Integration of Environmental Performance Considerations in Federal Government Procurement. The
various environmental performance considerations listed in the Green Procurement Checklist
(http://www.tpsgc-pwgsc.gc.ca/ecologisation-greening/achats-procurement/trousse-toolkit/page-4-eng.html) must also be
considered.
3.70 Procurement Review

(2017-07-01)
a. The government has determined that its procurement actions should be consistent with and supportive
of such national objectives as industrial and regional development, and other national objectives such as
aboriginal economic development, the environment, Defence Procurement Strategy and other approved
socio-economic objectives.
b. The objective of the Treasury Board Procurement Review Policy (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?

id=12074) is to enhance the use of procurement in support of national socio-economic objectives in a
manner that is fully consistent with the government's other objectives, e.g., the pre-eminence of
operational requirements, competition, fairness and accessibility, all within Canada's international trade
obligations.
c. The procurement strategy for goods and services over $2,000,000 must be considered for potential
socio-economic benefits to ensure that maximum benefit to Canada is achieved. The primary
mechanism for selection for the review for socio-economic benefits is inclusion in the department's
annual short range acquisition plan.
d. The review process is carried out by the interdepartmental Procurement Review Committee (PRC),
which is responsible for providing linkages between the government's national objectives and individual
procurements. Contracting officers should refer to Annex 3.5: Procurement Review Committee
Requirements and Approval Process for details on the process to be followed.
e. The PRC consists of a number of federal departments: PWGSC(the chair), the client department,
Industry Canada, the regional agencies/departments, Indian and Northern Affairs Canada, Environment
Canada, Employment and Social Development Canada, National Research Council, Finance Canada and
the Treasury Board Secretariat.
f. Industry Canada and the regional economic agencies/departments review procurements for potential
industrial and regional benefits. For more information on the Industrial and Regional Benefits Program,
see 9.45. The other departments, such as Indian and Northern Affairs Canada, review the procurements
for opportunities to achieve other national objectives, such as Aboriginal economic development.
g. The PRC makes recommendations to the operating and contracting departments regarding appropriate
procurement strategies and other initiatives that would support government objectives in individual
acquisitions.
h. Mandatory procurement review does not apply in the following situations:
i. foreign aid by or on behalf of the Canadian International Development Agency;
ii. procurements by the Canadian Commercial Corporation on behalf of entities not subject to this
policy, for example, foreign governments;
iii. the acquisition, modification and routine maintenance of real property, and
iv. security requirements by or on behalf of the Communications Security Establishment of the

Department of National Defence; the Canadian Security Intelligence Service; and the Royal
Canadian Mounted Police for the purpose of pursuing criminal investigations.
Note:Notwithstanding this exemption, the above organizations must apply the principles of the Policy
where appropriate, consistent with the security requirements of their procurement.
i. In cases of a pressing emergency, as defined in the Treasury Board (TB) Contracting Policy
(http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text) , departments may enter into contract without
submitting the strategy for procurement review pursuant to TB Procurement Review Policy. Such action
should be noted in any subsequent submission or report to TB or TB Secretariat (if such a submission or
report is required), and should also be reported to the PRC Secretariat within 60 calendar days.
j. The PRC divides procurements into the following categories:
i. those covered by international trade agreements, and
ii. all others, including requirements subject to the Canadian Free Trade Agreement (CFTA) or
Agreement on Internal Trade (AIT), with the following exceptions:
A. Foreign Military Sales;
B. security services;
C. temporary help services;
D. procurements under the Munitions Supply Program;
E. requirements subject to the Shipbuilding Policy.
Note:Procurement covered by international trade agreements is not reviewed for socio-economic

benefits, except for set-aide for minority or Aboriginal business.
k. The Advisory Council on Repair and Overhaul (ACRO) will carry out the socio-economic benefits
review for military repair and overhaul requirements, under the strategic direction of the Procurement
Review Committee (PRC).
l. For Major Crown Projects (MCPs), or those requirements exceeding $100 million, a Senior Project
Advisory Committee (SPAC) will normally be set up and the SPAC will, in accordance with the TB
Policy on Management of MCPs and will carry out procurement review function. If a SPAC is not set
up, then the PRC will review the procurement. For more information on MCPs, see 9.5 Major Crown
Projects.
m. For proposed procurements between $2 million and $100 million, the contracting officer must complete
a "Detail Document" to be forwarded to the PRC Secretariat, once it has undergone the respective sector
approval processes. It must be kept on the contract file.
n. Copies of the Detail Document and the Record of Decision must be retained on the procurement file.
3.75 Small and Medium Enterprise

(2012-01-18)
3.75.1 Office of Small and Medium Enterprises Role and Initiatives

(2010-01-11)
a. The Office of Small and Medium Enterprises (OSME), as part of the government of Canada, supports
the government agenda to provide value for Canadians by:
i. encouraging and assisting small and medium enterprises (SMEs) to participate in the federal
government procurement process;
ii. improving the links between supply and demand and influencing change within government
acquisitions, and
iii. conducting economic analysis of Government of Canada procurement and the private sector.
For more information, visit the Office of Small and Medium Enterprises (http://www.tpsgc-pwgsc.gc.ca/app-
acq/pme-sme/index-eng.html) Web site.
b. The Office performs six activities in support of smaller suppliers, as follows:
i. provides information and advisory services to SMEs that want to do business with the
government;
ii. helps reduce competition barriers and simplify the government contracting process;
iii. identifies and pursues opportunities that encourage the introduction of innovative new goods and
services;
iv. collaborates to improve procurement policies and best practices;
v. works closely with the SME community to ensure their concerns and views are brought forward
and heard; and
vi. engages with SMEs to interest them in federal government opportunities.
3.75.5 Public Works and Government Services Canada On-Line Tools/Services and Office
of Small and Medium Enterprises Role
(2014-09-25)
The Office of Small and Medium Enterprises and Strategic Engagement (OSME-SE) offers the following
demonstrations of on-line tools to individuals and groups:
a. Supplier Registration Information (SRI) service: Directory of suppliers who want to do business with
the federal government. This database is accessible to all federal government buyers and administrative
authorities. It is important that suppliers register with SRI as this database is the start of the contracting
process.
b. Contacts for GSIN Codes is a list of key purchasing contacts in PWGSC offices.
c. Government Electronic Tendering Service: The Government Electronic Tendering Service (GETS) is
where the Government of Canada posts procurement opportunities and allows suppliers to search for
them on-line. Buyandsell.gc.ca/tenders is the official site for Canada to meet its trade agreement
obligations and the authoritative and first source for Government of Canada tenders. For more
information about GETS, visit the Buyandsell.gc.ca Tenders or contact the InfoLine at 1-800-811-1148.
3.80 Requisitions subject to Comprehensive Land Claims Agreements (CLCAs)

(2015-09-24)
Contracting officers who receive a requisition that may be subject to Comprehensive Land Claims Agreements
(CLCAs) must consult 9.35 Comprehensive Land Claims Agreements (CLCAs) for information on the CLCA
obligations that have to be addressed during the procurement process.

(2010-01-11)
All federal government departments are encouraged to set-aside some procurements for competition by
Aboriginal suppliers provided operational requirements are fully met. For more information on the Procurement
Strategy for Aboriginal Business, see 9.40 Procurement Strategy for Aboriginal Business.
3.90 Contracting with former public servants

(2015-09-24)
a. Contracts with former public servants in receipt of a pension or of a lump sum payment must bear the
closest public scrutiny, and reflect fairness in the spending of public funds. (See 16.8 Former public
servants in receipt of a pension or a lump sum payment (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?
id=14494&section=text#sec16.8) of the Treasury Board Contracting Policy.)
b. A former public servant is any former member of a department as defined in the Financial
Administration Act, a former member of the Canadian Armed Forces or a former member of the Royal
Canadian Mounted Police. A former public servant may be:
i. an individual;
ii. an individual who has incorporated;
iii. a partnership made of Former Public Servants, or
iv. a sole proprietorship or entity where the affected individual has a controlling or major interest in
the entity.
c. Retirement Waiting Period

When contracting with a former public servant or a former public officer holder, the provisions of the
Conflict of Interest Act, the Post-Employment Measures contained in the Values and Ethics Code for the
Public Service, and the Conflict of Interest and Post-Employment Code for Public Office Holders apply.
These codes provide information on the applicability of the retirement waiting period. The retirement
waiting period does not apply to former members of the Canadian Forces or the Royal Canadian
Mounted Police (RCMP)
d. Approval Authority
Contracting officers must indicate in the approval document that a contract will be issued to a former
public servant. Treasury Board approval may be required for a service contract with a former public
servant, depending on the value or the situation. For more information, see Annex 6.4.1: Approval
Authorities and Additional Signing Authorities in Support of Clients' Programs Only - Other than for
Canadian Commercial Corporation, section 1.1.1.
e. Fee Abatement
i. For non-competitive service contracts with former public servants in receipt of a pension, the fee
abatement formula below applies in the determination of the maximum fee payable during the
one-year fee abatement period.
ii. In accordance with the Workforce Adjustment Directive, for non-competitive service contracts
with former public servants in receipt of a pension and a lump sum payment, the application of
the fee abatement formula is postponed to have it begin at the conclusion of the lump sum
payment period. See subsection f. below.
iii. Fee Abatement Formula

D= ((M+F)/260) - (P/260)
where formula variables correspond to:
D
maximum payable per diem rate;
M
maximum salary of the former public servant, updated to the current level, or the
estimated salary cost of having the work done by a qualified public servant;
F
cost of usual fringe benefits, 30 percent;
P
total annual pension in pay.
Example:
Maximum salary = $60,000; benefits are 30 percent of salary;
Pension after 35 years of service = $42,000 ($60,000 x 0.7);
Per Diem= (60,000 + 18,000)/260 - 42,000/260 = $138.46
Note: A "pension" means a pension or annual allowance paid under the Public Service
Superannuation Act (PSSA) and any increases paid pursuant to the Supplementary Retirement
Benefits Act, as it affects the PSSA. It does not include pensions payable pursuant to the Canadian
Forces Superannuation Act, the Defence Services Pension Continuation Act, the Royal Canadian
Mounted Police Pension Continuation Act and the Royal Canadian Mounted Police
Superannuation Act, the Members of Parliament Retiring Allowances Act and that portion of
pension payable to the Canada Pension Plan Act.
iv. No exceptions to the application of the formula or to the maximum rate allowed must be
permitted without prior TB approval.
f. Workforce Adjustment Directive
i. In addition to the requirements of the contract fee abatement policy for former public servants in
receipt of a pension, the amount payable for professional fees to former public servants, whether
they are in receipt of a pension or not, members of the Canadian Forces, and members of the
RCMP, who have received a lump sum payment for employment termination under a workforce
reduction program or adjustment initiative, has been limited during the lump sum payment period.
ii. The contract fee limit policy does not apply if the contract is not specifically for the services of a
former public servant.
iii. For purposes of this policy, the "lump sum payment period" is defined as the period measured in
weeks of salary, for which payment has been made to facilitate the transition to retirement or to
other employment as a result of the implementation of various programs to reduce the size of the
Public Service. The lump sum payment period does not include the period of severance pay,
which is measured in a like manner.
iv. For competitive or non-competitive service contracts awarded to a former public servant during
the lump sum payment period, the total amount of fees that may be paid is $5,000, including
applicable taxes. The contract fee limit policy applies to all former public servants, including
former members of the Canadian Forces and the Royal Canadian Mounted Police, in receipt of a
lump sum payment.
v. Reasonable overhead costs, such as travel expenses, are excluded from the $5,000 limit. However,
due to the sensitivity of these contracts, these costs should be strictly controlled. Departments and
agencies must obtain Treasury Board approval for all contract situations where former public
servants could receive fees totaling more than $5,000 during the lump sum payment period.
vi. When a former public servant works as a salaried employee of, or a subcontractor to, an
established supplier contracting with Canada, the contract fee limit policy does not apply.
g. Proactive Disclosure
After January 1, 2013, departments will be required to include information on service contracts and
contract amendments over $10 000 awarded to a former public servant in receipt of a Public Service
Superannuation Act (PSSA) pension on the Disclosure of Contracts departmental websites. For further
information, consult the Guidelines on the Proactive Disclosure of Contracts (http://www.tbs-sct.gc.ca/pol/doc-
eng.aspx?id=14676) on the Treasury Board of Canada Secretariat website.
3.95 Intellectual Property (IP)

(2015-09-24)
a. Before issuing a solicitation or awarding a contract, the contracting officer must identify what
intellectual property (IP) is already existing before contract award and, conversely, what IP will be
generated as a result of the contract. In addition to reducing future costs, disputes can be avoided by
being clear upfront.
b. Intellectual property is anything resulting from a contract that can be copyrighted, trademarked,
patented, licensed, etc. Potentially, any contract can have IP. The likelihood for IP is much greater
where the goal of the contract is something new, or might incorporate new processes. IP considerations
are most relevant to research and development contracts, software development, or where the
production of new written material occurs. A definition of "Intellectual Property" and Intellectual
Property Rights" can be found in Standard Acquisition Clauses and Conditions Manual general
conditions 2040.
c. Contracting officers can find complete details on the IP policy as per following Treasury Board policies:
i. ARCHIVED - Policy on Title to Intellectual Property Arising Under Crown Procurement

Contracts (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/contracting/tipaucpc-eng.asp) ;
ii. Implementation Guide for the Policy: Title to Intellectual Property Arising Under Crown
Procurement Contracts;
iii. ARCHIVED - TBS Contracting Policy Notice 2000-2 (http://www.tbs-

sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/cpn_00-2_e.asp) : Revised Policy on Ownership of Intellectual
Property Arising Under Crown Procurement Contracts.
d. The default position of the government policy is to allow contractors to retain the rights to IP generated
under government contracts. This is designed to promote the commercialization of new ideas, under the
premise that the private sector has a greater capacity in this regard. Exceptions are described in the
Policy references above.
e. The contracting officer must therefore determine at the planning stage, how IP will be handled, what IP
is anticipated and how the IP will be identified and secured for the use of the client and Canada. Once
again, this process can have very long timeframes and can have extremely complex processes. The
greatest pitfall with IP is in not identifying what is the foreground information and the background
information upfront and if left to the end of the contract, Canada is at a severe disadvantage.
f. The client department must decide to what extent IP rights are to be retained by Canada. However, the
contracting officer should discuss with the client department their needs in order to ensure that the client
department is aware of the extent to which PWGSC can obtain for them the rights they need to use the
IP created under their contract, whether Canada or the contractor owns the IP. For instance, subject to
industry practice, Canada may not be able to obtain IP ownership, even when desired. In such cases,
Public Works and Government Services Canada ( PWGSC) contract clauses are designed with the goal
of ensuring that even where the contractor owns the IP, this does not affect the client department's
ability to use the IP, except that such use would not extend to commercialization of the IP by Canada.
g. A summary of PWGSC's contractual options is shown in the table below.
Table 1: Contractual Options for Ownership of Intellectual Property
Intellectual Research and Goods with

Goods with no R&D Services with no
Property Development Associated
Expected R&D Expected
Options (R&D) R&D
Contractor to Contractor to Canada to Own Canada to Own

Default
Own IP Own IP Copyright Copyright
Canada to Own IP Canada to Contractor to Own Contractor to Own IP,
Option Own IP IP, including including Copyright
Copyright
Client Not applicable Not applicable No IP Terms in the No IP Terms in the

Contract Contract
Department
says no IP
3.100 Vendor Performance Corrective Measures

(2011-06-29)
For more information on the Vendor Performance Corrective Measure Policy, contracting officers should
consult section 8.180 Vendor Performance Corrective Measure Policy; For more information on rejection of
bids/offers/arrangements based on Vendor Performance Corrective Measures, see section 5.55 Rejection of
Bids/Offers/Arrangements.
3.105 National Security Exceptions

(2012-01-18)
3.105.1 Trade Agreements and Invoking a National Security Exception

(2017-09-21)
The national security exception (NSE) provided for in the North America Free Trade Agreement (NAFTA),
Canada-European Union Comprehensive Economic and Trade Agreement (CETA), the World Trade
Organization Agreement on Government Procurement (WTO-AGP), the Canada-Chile Free Trade Agreement
(CCFTA), the Canadian Free Trade Agreement (CFTA) and the Agreement on Internal Trade (AIT) allow
Canada to exclude a procurement from some or all of the obligations of the relevant trade agreement(s), where
Canada considers it necessary to do so in order to protect its national security interests specified in the text of
the NSE. The purpose of the NSE must ensure that parties to the agreements are not required in any way to
compromise these interests through application of the obligations of the trade agreements.
3.105.5 Texts of the National Security Exceptions

(2017-09-21)
a. The relevant text for each trade agreement can be found as follows:
i. for NAFTA, Article 1018: Exceptions;
ii. for CETA, Article 19.3: Security and general exceptions (http://www.international.gc.ca/trade-
commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/19.aspx?lang=eng) ;
iii. for WTO-AGP, Article XXIII: Exceptions to the Agreement

(http://www.wto.org/english/docs_e/legal_e/gpr-94_02_e.htm#articleXXIII) ;
iv. for the CCFTA, Article Kbis-16: Exceptions;
v. for the CFTA, Article 801: National Security;
vi. for the AIT, Article 1804: National Security (http://www.ic.gc.ca/eic/site/ait-aci.nsf/eng/il00019.html#E) .
b. The Canadian International Trade Tribunal (CITT), in its decision PR-98-005

(http://www.citt.gc.ca/en/procure/determin/archive_pr98005_e) , has found that "the most senior level of substantive
policy formulation and advice to the department on all Acquisition Branch activities…" has the
authority to invoke the use of the National Security Exception, to exclude a procurement from the
NAFTA, CETA, WTO-AGP, CCFTA and the CFTA or AIT. For Public Works and Government
Services Canada (PWGSC), that authority is the Assistant Deputy Minister of the Acquisitions Branch
(ADM/AB).
c. Furthermore, on the basis of the authority given to the Minister under section 6 of the Department of
Public Works and Government Services Act, in conjunction with paragraph 24(2)( d) of the
Interpretation Act, PWGSC has decided that this specific authority will not be delegated to a lower
official level because of the nature of the exception. PWGSC has further decided that a NSE will not be
invoked by anyone other than the ADM/AB, where PWGSC/AB is the contracting officer. See the
procedures for invoking an NSE below.
d. Invoking an NSE under the trade agreements does not affect the obligation to comply with the
Government Contracts Regulations in respect of such matters as sole source justifications, other
sourcing strategy issues and contracting officer limits. Procurements for which an NSE is invoked
remain subject to other relevant regulations and governmental and departmental policies, which may
include posting a Notice of Proposed Procurement or an Advanced Contract Award Notice on the
Government Electronic Tendering Service where appropriate, though the security requirements may, in
some cases, preclude such actions.
e. If the NSE has been invoked, the contracting officers must insert the following statement to that effect
in all notifications to suppliers and in all tender documents:
"This procurement is subject to national security exception and is, therefore, excluded from all of the
obligations of the trade agreements."
3.105.10 Procedures for Invoking a National Security Exception

(2017-09-21)
a. All requests to invoke an NSE to exclude a procurement from the WTO-AGP, NAFTA, CETA, CCFTA
and the CFTA or the AIT, or any combination of the agreements, will normally be submitted by the
client department to the ADM/AB for approval, regardless of dollar value, where PWGSC/AB is the
contracting officer.
b. A request must be in the form of a letter from the responsible ADM, or equivalent to the ADM level, at
the client department. The letter must explain the nature of the proposed procurement and, depending
upon which trade agreement(s) applies, how it relates to:
i. Canada's "national security interests" or, pursuant to Canada's international obligations, "the
maintenance of international peace and security". (CFTA: Article 801: National Security / AIT:
Article 1804); and/or
ii. Canada's "essential security interests relating to the procurement of arms, ammunition or war
materials, or to procurement indispensable for national security or for national defence purposes".
(NAFTA: Article 1018 (1) / CETA: Article 19.3 (1) / WTO-AGP: Article XXIII (1) / CCFTA:
Article Kbis-16 (1) ).
c. In reviewing requests to invoke the NSE, the ADM/AB will be considering only the issue of whether or
not to invoke the NSE and will not be considering, at that time, other matters such as procurement
methods, procurement plans or authority to enter into the contract. Client departments should work with
the contracting officer in determining which method of procurement to be used, in parallel with any
request for approval of an NSE. In situations where the NSE is invoked, it remains government policy to
compete the requirement, subject to the exceptions to competitive contracting provided in the
Government Contracts Regulations(GCRs).
d. Requests for an NSE are reviewed by the Acquisition Program Integrity Secretariat (APIS) who makes
recommendations to the ADM/AB. Once the ADM/AB has made a decision whether or not to invoke an
NSE, the ADM/AB will advise the client department in writing of the decision. For the approval process
for NSE, see section 1.1.4 of Annex 6.4.1: Approval Authorities and Additional Signing Authorities in
Support of Clients' Programs Only - Other than for Canadian Commercial Corporation.
Note: Contracting officers seeking advice to aid client departments in properly framing and requesting
an NSE should contact APIS at 819-934-1382. It is strongly recommended that a draft of the NSE
request letter be forwarded to APIS for review before having it signed by the responsible ADM at the
client department. For a template of the NSE request letter, see Annex 3.7: National Security Exception
Request Letter – Template.
e. The utilization of the NSE must be documented. In documents used to seek authority to enter into
contract, and on the file, the contracting officer must explain clearly that the NSE is being invoked,
specifying each of the trade agreements from which the procurement is being excluded, and include a
copy of the NSE approval on the file.
3.110 Legal Services

(2014-09-25)
a. All Legal Services lawyers are officers of the Department of Justice. The role of the PWGSC Legal
Services is to provide legal services to PWGSC. Legal services relating to procurement must be sought
only from the PWGSC Legal Services or from a regional office of Justice Canada, when the latter has
agreed along with PWGSC Legal Services to provide counsel to a particular region. Legal Services
involvement in the review of proposed contractual documents is intended to:
i. ensure that contracts are legally binding and enforceable and precisely reflect the intended
relationship between Canada and the contractor;
ii. ensure that the respective obligations of the parties are expressed clearly and that the interest of
Canada are protected;
iii. identify the consequences of any changes to standard general conditions in terms of the additional
risk and liability being assumed by Canada.
b. Whenever legal involvement is required, contracting officers must provide the legal counsel involved
with access to all required documents and files. Legal counsels should be given the opportunity to
review procurement documents at an early stage in the procurement process to facilitate the making of
informed business decisions and incorporation of any required changes. For the procurement of goods
and services, this means before the issuance of bid solicitations and requests for standing offers or for
supply arrangements. For anything related to the administration of the contract, standing offer or supply
arrangement, Legal Services must be consulted before any binding action is taken by contracting
officers.
c. Contracting officers must seek legal advice:
i. if determined through the application of a procurement risk assessment;
ii. for contracts containing special conditions or deviations from PWGSC or Canadian Commercial
Corporation general and supplemental conditions;
iii. in all situations where the work has been completed pursuant to a verbal request from a
representative of a client and a confirming order has to be prepared;
iv. in all situations where a security must be obtained to ensure repayment of a debt or satisfaction of
an obligation to Canada, particularly for all contracts under which payment is secured by means
of a letter of credit;
v. for all letters of comfort, letters of intent and go-ahead letters;
vi. for all contracts where questions may arise regarding conflict of interest issues or the post-
employment code for former public servants;
vii. for all letters of credit;
viii. for any proposed assignment of a contract to a third party;
ix. for any case of receivership, insolvency or bankruptcy of a contractor;
x. for all terminations for default, convenience and mutual consent;
xi. for all defence contracts where the provisions of section 20 of the Defence Production Act
respecting title to any government issue or building may be applicable;
xii. for all memorandum of understanding and drafting of orders in council;
xiii. for all conditional amendments (see 8.180 Vendor Performance Corrective Measure Policy).
d. Legal Services can also be contacted about any matter in respect of which a contracting officer believes
legal advice would be appropriate or helpful. Some of these situations are identified below:
i. any proposed contract for services involving the possible development of an employee-employer
relationship;
ii. any proposed contract where a clause providing for liquidated damages must be included to cover
late delivery or unsatisfactory performance of the work;
iii. disputes arising after the contract has been awarded;
iv. for discussions or communications with outside lawyers.
e. Solicitor-Client Privilege
i. Communications between a client and its lawyer are protected by the solicitor-client privilege and
exempt from disclosure under the Access to Information Act. The solicitor-client privilege allows
clients to disclose all relevant information to their legal counsel knowing that such information
will remain confidential. There are however three conditions for the privilege to apply:
A. the communication must be with a practicing lawyer occupying a legal counsel position
within government (it would also include a non-government lawyer hired by the
Department of Justice to provide legal services in certain circumstances);
B. the communication must be for the purpose of giving or receiving legal advice, as opposed
to policy advice or non legal matters advice;
C. the request for legal advice and any advice given must have been intended to be
confidential. A notice "protected by solicitor-client privilege" may not be sufficient to prove
that the parties intended that the communication be privileged. The proof will really be
found from the actions of the client who must disclose the communication only to those
persons who have a direct need to know depending on the circumstances of each case.
Contracting officers must be particularly careful with e-mails containing legal advice and
not forward them to persons who don't have a direct need to know.
ii. All three conditions must be met for the privilege to apply. If any one of those conditions is not
met, all communications between the lawyer and the client relating to the subject matter will lose
their privilege status.
iii. The solicitor-client privilege is the privilege of the client, who alone can waive it either
intentionally or unintentionally. Intentional waiver occurs when a client, after consultation with its
legal counsel, decides to disclose the privileged communications knowing the consequences of
this action. Unintentional waiver occurs when, despite the fact that the parties still intend to keep
the communication confidential, it is disclosed to a third party who does not have the need to
know. Once the communication is revealed to a third party who does not have a need to know, the
privilege is waived. This means that the legal advice is not protected anymore and is subject to
disclosure under the Access to Information Act, if no other exception applies. This also means that
all other communications between the legal counsel and the client relating to the same subject
may lose their privilege and protection.
iv. Communications subject to solicitor-client privilege can be subject to mandatory statutory

disclosure. For example, the Auditor General Act authorizes the Auditor General to review legal
advice on matters relevant to her/his auditing function. The Auditor General however cannot
disclose the legal advice. The disclosure to the Auditor General does not constitute a waiver of the
privilege and the information remains confidential and is still protected by the privilege.
v. Legal advice should not be disclosed without the knowledge and recommendation of legal
counsel. All questions regarding solicitor-client privilege should be brought to the attention of
Legal Services.
3.115 Bidders' Conferences

(2016-01-28)
a. A bidders' conference is used to provide information to suppliers and to ensure that all suppliers receive
the same information. A conference must be held only when such a meeting is required for suppliers to
fully understand the proposed procurement.
b. Supplier’s attendance is optional, as the purpose of a bidder’s conference is to provide information and
opportunities for bidders to ask questions about the project and the procurement process, which can
easily be done via e-mail if an interested bidder does not attend the conference. Only the information
that was shared with the attendees at the bidders’ conference must be shared with bidders who did not
attend.
c. Whenever there is a bidders' conference planned, the Notice of Proposed Procurement (NPP) and
solicitation documents must clearly state that there will be a bidder's conference and indicate the
location, date and time and the level of clearance required (if the location requires that participants hold
a valid security clearance).
d. SACC Manual clause A9083T should be used when a bidders’ conference will be held and to provide
the necessary instructions for attendance. Clause A9083T must also be used to provide location, time
and administrative arrangements of the bidders' conference in the solicitation document. For Request for
Standing Offers, the equivalent SACC clause is M9083T. For Request for Supply Arrangements use
S0026T.
e. The bidders' conference normally takes place at the Public Works and Government Services Canada
(PWGSC) office that issues the solicitation, or at another suitable location arranged by that office. It is
preferable to choose a location accessible to the public so the bidders are not required to hold a valid
security clearance or be escorted by a government representative.
f. While a bidders' conference is normally held as one meeting, the scope of the solicitation may dictate
the need for a series of cross-country regional conferences.
g. The conference should be scheduled on a date that will:
i. allow suppliers time to obtain and review the solicitation;
ii. allow for the preparation and distribution of minutes in sufficient time for suppliers to prepare and
submit bids before the solicitation closing date;
iii. allow for bidders to obtain the required security clearance.
h. The contracting officer should request in the solicitation document that suppliers identify, in writing,
before the meeting date, the names of the representatives who will attend and a list of the issues they
propose to raise.
i. Before the conference, the contracting officer must prepare an agenda outlining elements to be
discussed, including questions raised by suppliers. PWGSC will chair all bidders' conferences and
prepare the minutes, including any clarifications or specification changes that may result in a change to
the requirement. Client departments are also expected to attend and be available to answer any questions
relating to the requirement.
j. The minutes of the bidder’s conference must be made available to all attendees in sufficient time to
allow suppliers to prepare and submit responses before the solicitation closing date. For solicitation
documents originally posted on the Government Electronic Tendering Service (GETS), the minutes
must also be posted on GETS; for solicitations that are not posted on GETS, the minutes must be made
available to all suppliers who have already requested a solicitation document or have been invited to
respond to the solicitation. The sensitivity of the information included in the minutes has to be
considered when choosing the proper way of making them available.
k. Any clarifications or changes to the solicitation resulting from the bidders' conference will be included
as an amendment to the solicitation. A copy of the solicitation amendments must be made available on
GETS or, if the solicitation has not been posted on GETS, to all suppliers who have already requested a
solicitation document or have been invited to respond to the solicitation.
l. Where practical, the use of various technical means such as video conferencing, teleconferencing or web
casting could be considered to allow suppliers to participate either directly or indirectly to the
conference. Video or audio recordings of the conference could be made and distributed to suppliers who
were not able to attend; it is however not recommended to permit suppliers to record the conference for
their own purposes.
m. Suppliers that do not attend the bidder’s conference are not precluded from submitting a bid.
3.116 Site Visits

(2014-06-26)
a. Attendance at site visits may be optional or mandatory. Mandatory site visits apply to all suppliers, even
those who contend they are already familiar with the site in question.
b. Site visits must be arranged in conjunction with the client department. The contracting officer should
always attend.
c. Whenever there is a site visit requirement, the Notice of Proposed Procurement (NPP) and solicitation
documents must clearly state that there will be an optional or mandatory site visit and indicate the
location, date and time, and the level of clearance required (if the location requires that participants hold
a valid security clearance). To provide location, time and administrative arrangements of the site visit in
the solicitation document, Standard Acquisition Clauses and Conditions (SACC) Manual clauses
A9038T or A9040T must be used respectively for an optional or a mandatory site visit.
d. The need for a mandatory site visit should be carefully examined and documented on the procurement
file as part of the procurement planning stage. Consideration should be given to the cost and relative
hardship imposed on suppliers not in the immediate vicinity of the site when deciding if a site visit will
be mandatory.
e. The requirement for holding a valid security clearance at the required level in order to access the site or
have access to sensitive information or assets has to be considered when organizing a site visit as it
affects the scheduling and may limit access to suppliers. SACC Manual clauses A9038T or A9040T,
which must be used respectively for optional or mandatory site visits, offer options depending on
whether security requirements are associated with the site visit or not.
i. In order for the suppliers’ representatives to receive personnel security clearance from the
Canadian Industrial Security Directorate (CISD), the suppliers must already have obtained
organization security screening/clearance.
ii. Personnel security clearances may take time depending on the individual’s history and the level of
security clearance required.
iii. The contracting officer and client departments must consider alternatives if the security clearance
cannot be obtained on time for the site visit. For example: Can the date of the site visit be
changed? If holding a security clearance for access to sensitive information or assets is not
required to access the site, can individuals simply be escorted by a government representative?
iv. Prior to the site visit, a Security Requirements Check List (SRCL) must be completed and
submitted to CISD. A Request for Private Sector Organization Screening (PSOS) form may also
be submitted along with the SRCL to initiate the screening process of any bidders that are not
already registered with CISD. Information on the PSOS form and how to obtain it is available in
section 4.30.10 Industrial Security in Contracts.
v. The contracting officer has to confirm with CISD that the proposed visiting suppliers or their
representative(s) hold the required security clearance.
vi. It is the responsibility of the supplier’s Company Security Officer to ensure that their
representatives’ security clearances are valid and at the required level for the site visits.
f. The site visit should be scheduled on a date that will :
i. allow suppliers time to obtain and review the solicitation;
ii. allow suppliers time to obtain the required security clearance and for CISD to confirm that the
suppliers hold the required security clearance;
iii. allow for the preparation and distribution of minutes in sufficient time for suppliers to prepare and
submit bids before the solicitation closing date.
g. In the event of a mandatory site visit, the NPP and solicitation documents must clearly state:
i. that the site visit is mandatory;
ii. the level of clearance required (if holding a valid security clearance is required in order to access
the site or to have access to sensitive information or assets); and
iii. that failure to attend will result in the bid being declared non-responsive.
h. In the event of an optional site visit, the NPP and solicitation documents must clearly state:
i. that the visit is optional;
ii. the level of clearance required (if holding a valid security clearance is required in order to access
the site or to have access to sensitive information or assets); and
iii. that suppliers who do not attend are not precluded from submitting a bid.
i. The contracting officer should request in the solicitation document that suppliers identify, in writing,
before the meeting date, the names of the representatives who will attend and a list of the issues they
propose to raise.
j. For solicitation documents originally posted on the Government Electronic Tendering Service (GETS),
the minutes must also be posted on GETS; if the solicitation has not been posted on GETS, the minutes
must be made available to all suppliers who have already requested a solicitation document or have been
invited to respond to the solicitation. The sensitivity of the information included in the minutes has to be
considered when choosing the proper way of making them available.
k. The client department must be instructed to advise PWGSC of any clarifications, or changes in
specifications, resulting from the site visit. The original solicitation must then be amended to reflect
these changes or clarifications.
l. A copy of the solicitation amendments must be made available on GETS or, if the solicitation has not
been posted on GETS, to all suppliers who have already requested a solicitation document or have been
invited to respond to the solicitation.
3.120 Roles and Memorandum of Understanding

(2010-01-11)
Contracting officers should consider client department memorandums of understanding (MOUs) when
determining roles and responsibilities in the planning and management of procurements. Contracting officers
shoud consult Annex 1.1: Matrix of Responsibilities between PWGSC and Client Departments for the
Procurement of Goods and Services (Generic) and Annex: Specific Division of Responsibilities Agreements
relative to the division of responsibilities between PWGSC and the client department, as well as 9.5.15
Memorandum of Understanding with Client Department relative to Major Crown Projects.

(2017-04-27)
For information on procurements on behalf of the Canadian Commercial Corporation (CCC), the roles and
responsibilities of CCC and PWGSC as well as the pertinent Memorandum of Understanding (MOU), see 9.55
Canadian Commercial Corporation.
3.130 Canadian Content

(2010-01-11)
a. The Canadian Content Policy encourages industrial development in Canada by limiting, in specific
circumstances, competition for government procurement opportunities to suppliers of Canadian goods
and services.
b. For more information on the complete Canadian Content Policy and the procedures for its application,
see Annex 3.6: Canadian Content Policy.
3.135 Fairness Monitors

(2017-04-27)
For all procurements requiring the Minister's approval or above, contracting officers must formally assess the
merits, at the procurement strategy phase, of using a fairness monitor.
a. Contracting officers may optionally consider, at the procurement strategy phase, using a fairness
monitor where an enhanced assurance of fairness is desired (e.g. at the request of the client, complex
procurement).
b. Contracting officers must complete the Fairness Monitoring Coverage Assessment and
Recommendation Form PWGSC-TPSGC 587 for both mandatory and optional fairness monitor use
and submit to the Assistant Deputy Minister, Acquisitions Branch (ADM/AB), for signature.
c. The signed form is then forwarded to the ADM, Departmental Oversight Branch (DOB). In the event
that the ADM/AB does not recommend the use of a fairness monitor in an optional situation (see (b)
above) above, the signed form is not forwarded to the ADM/DOB but must be kept on the procurement
file.
d. The ADM/DOB reviews the request for fairness monitor coverage of the procurement process on behalf
of the Business Operations Committee (BOC) and forwards the recommendation to BOC who renders a
decision on whether use of a fairness monitor is appropriate and desirable.
e. For more information, see the Policy on Fairness Monitoring . (See also 1.50 Fairness monitoring and
5.25 Use of Fairness Monitors.)
3.140 Life Cycle Costing

(2010-01-11)
Life cycle costing pertains to all four stages of the procurement process, from planning and acquisition to use
and disposal. Currently, the Policy on Green Procurement applies to all federal government procurement
activities. The Policy requires that environmental performance considerations be embedded into the
procurement decision-making process in the same manner as price, performance, quality and availability. For
more information and tools on the life cycle costing, see 2.20 Green Procurement and Defining the
Requirement.
3.140.1 General Requirements

(2010-01-11)
a. The Policy on Green Procurement is aligned with the Treasury Board (TB) policies on assets and
acquired services and reinforces the requirement to take into account both environmental performance
and costs that occur throughout the life cycle of assets and acquired services, including planning,
acquisition, use and disposal. Some cost elements related to environmental factors that could be taken
into account in assessing value for money in the evaluation of bids, offers or arrangements include:
i. operation costs, such as energy or water consumed by the product over its life;
ii. indirect costs (less energy efficient information technology equipment will produce more heat
causing the building's air conditioning system to work harder, and increase electricity costs);
iii. administrative costs, such as complying to Workplace Hazardous Materials Information System
(WHMIS);
iv. investing up front to save costs later, such as specifying higher levels of insulation where the extra
expenditure can be recovered from lower energy costs;
v. cost of disposal arrangements;
b. The application of total life cycle costing has traditionally meant the sum of the Product, Resource,
Operating, and Contingent (PROC) costs relating to procurement. The PROC technique is essential for
evaluating bids, offers or arrangements. Through the Policy on Green Procurement (http://www.tpsgc-
pwgsc.gc.ca/ecologisation-greening/achats-procurement/politique-policy-eng.html) , Canada has strengthened
environmental performance considerations into the procurement process. In this context, value for
money includes the consideration of many factors such as cost, performance, availability, quality and
environmental performance.
c. The PROC technique should be used for Major Crown Projects and in procurement in which operating
costs are a major part of the total cost of the product, for example, major construction projects or motor
vehicle purchases. (See Chapter 9 - Special Procurements.)
3.145 Cost and Profit

(2010-01-11)
a. For a contract to be awarded on a non-competitive basis, or when, following a competitive process,

price negotiations with the successful bidder are required, the anticipated cost and profit becomes part of
the strategy and forms part of the determination of the type of contract contemplated to be put in place.
b. The contracting officer must estimate the cost for the procurement planning phase. Conceptual cost
estimating is derived from a mix of industry standards and historical data for similar procurement. The
total project budget and estimate should be considered using an optimistic and pessimistic price to
determine a cost range. It is important to consider fixed costs, external influences, such as exchange
rates and supply and demand. Also, consideration should be given to the build of a contingency fund
and a management reserve fund. It would be beneficial to include a description of the scope of work,
and the basis for the estimate. Assumptions made must be documented and an outline provided relative
to the range of possible cost.
c. In general contract negotiations, profit is a representation of the risk a bidder is taking in delivering the
contract. If Canada is assuming the majority of the risk then the profit applied should be low. If the
bidder is assuming the risk then the profit allowable should be higher. Although not all contracts
demand the application of the profit policy and all its components, the profit policy does represent the
factors to be considered when negotiating the applicable profit. Consideration should be given to the
factors detailed in the Policy even though detailed analysis and calculations may not be performed.
d. For more information on cost and profit, see Chapter 10 Cost and Profit.
3.150 Standards and Quality Assurance

(2012-01-18)
3.150.1 Standards, Specifications and Purchase Descriptions

(2010-01-11)
a. Recognized Canadian standards or specifications must be used in the procurement of goods and
services, except when not warranted by the volume or specific nature of the procurement.
b. When Canadian national standards are not available, Canadian specifications produced by a recognized
standards-writing organization must be used wherever possible. Where no such specification is
available, directly relevant United States (U.S.)/foreign or international standards or specifications
should be used when suitable.
c. In determining the suitability of U.S./foreign or international standards or specifications, the contracting

officer should consult with the client, and may call on the assistance of the Canadian General Standards
Board (CGSB). The determination to use such standards should also reflect the extent to which:
i. Canadian views have been reflected in the standard or specification;
ii. products available in Canada are likely to conform to the standard or specification;
iii. the standard or specification is likely to discriminate against products.
d. Contracting officers must assess the adequacy and applicability of any standards, specifications,
including client-developed specifications, or purchase descriptions included by a client in the
requisition.
e. When a requisition does not include an existing standard, specification or purchase description, which
the contracting officer considers appropriate, the contracting officer should recommend to the client that
the requisition be amended to include it.
f. Contracting officers are also responsible for identifying the need for a new standard, specification or
purchase description, if a suitable one is not available for a particular product or service.
g. Clients are responsible for stating their requirement for Government Quality Assurance (GQA), which
includes quality assurance and quality control on their requisition or attached technical documentation.
h. The client statement should clearly and completely describe the technical requirements and the
requirement for GQA, and must designate the inspection authority and the point of inspection.
i. The extent of GQA required will vary, depending on contract technical requirements and bidder
performance history.
j. The GQA requirement may be specified in terms of:
i. the quality standard against which verification will be conducted such as ISO 9001-2000, ISO
9001-2000 plus AQAP-2110, or equivalent;
ii. the requirement for the supplier to establish and maintain systems to assure quality;
iii. the requirement for the supplier to demonstrate conformance;
iv. what quality verification activity will be done by the government;
v. consignee inspection;
vi. the requirement for the supplier to provide proof of compliance in accordance with an acceptable
quality assurance standard or specification;
vii. the requirement for the supplier to submit samples for approval, such as pre-award samples, first-
off units, pre-production, qualification or sealed samples;
viii. the requirement for the supplier to submit an inspection plan;
ix. the requirement for the inspection authority to verify that the product supplied:
A. is equal in all respects to the product qualified during the Qualified Products
List/Qualification Program List (QPL) or Certification Program List (CPL) process;
B. is manufactured under the same conditions as the product qualified during the QPL/ CPL
process;
C. the details of acceptance inspection, tests and trials.
k. As an alternative to items above, the supplier may be required to be listed in an acceptable qualifying
program, such as ISO 9001-2000, ISO 9001-2000 plus AQAP-2110, or equivalent that provides for
adequate audit and controls.
l. When the alternative above is specified, supplier surveillance must be undertaken, to assess the
supplier's compliance with the specified standard. The contracting officer must inform clients of the
availability of CGSB or other listing programs that, if used for procurement, would reduce the need for
GQA. For example, CGSB Certification and Qualification Programs (http://www.tpsgc-pwgsc.gc.ca/ongc-
cgsb/programme-program/certification/index-eng.html) and the Qualified Products Lists are operated on a cost
recovery basis with no direct expense or use of resources to the client.
m. If a requisition does not specify a GQA requirement, or includes an insufficient level, given the nature
of the procurement, the contracting officer must work with the client to develop an appropriate GQA
framework, and advise the client of the financial and operational implications of appropriate GQA, for
the client, the supplier and PWGSC.
n. If a requisition does not specify a supplier quality system, the client should be requested to consider
specifying such a stipulation if:
i. non-conformance would produce significant effects relating to product safety, reliability or

operational consequence; for example, arctic clothing, fire extinguishers and security equipment
or services;
ii. the requirement is for a newly designed product being produced to government-generated
specifications;
iii. the requirement is for a product or service where current bidders have a history of not conforming
to specifications and/or previous similar requirements have resulted in chronic client complaints;
iv. the requirement is for a product of high technical complexity; a product that has stringent
interchangeability requirement; or a "critical" product whose non-conformance would result in the
failure of a system of which that product is a component;
v. the requirement is for a product or service, which is being purchased for the first time and no
history of performance is available; or
vi. at least one potential supplier has a weak quality system.
Note 1: This is required to provide adequate protection for both the client and PWGSC.
Note 2: The contracting officer may also consider a supplier quality system if a requirement has significant
dollar value. However, issues relating to the nature of the requirement are usually more important than the
dollar value.
3.150.5 Government Quality Assurance at Source

(2010-01-11)
a. Government Quality Assurance (GQA) at source should be used when any of the following conditions
apply:
i. the requisitioning authority has designated an inspection authority other than the consignee;
ii. the costs of performing inspection at source are justified by the benefits received;
iii. conformance cannot be adequately determined on receipt because:
A. the product contains critical characteristics not visible in the end item;
B. the product has special safety or security characteristics;
C. special packing and packaging would be destroyed;
D. delivery is to multiple destinations; or
E. conditions or capabilities are not adequate at destination.

iv. the bidder has a record of marginal performance or unsatisfactory quality history and conditions
preclude procurement from other sources.
b. The GQA at source may be performed by a client-designated inspection authority or by an inspection

authority commissioned by PWGSC on behalf of the client. As part of the inspection, supplier
performance data respecting quality must be documented and copies of all inspection reports provided
to the sector/region.
c. PWGSC has the authority to provide additional quality tasking for civilian marine services; for example,
inspection and arranging for technical support. This authority is provided through TB Document
No. 749386, May 5, 1977, Section VI, Recommendation 2.
3.150.10 Listing Programs

(2010-01-11)
a. Listing programs are designed to expedite procurement by establishing, in advance and independent of
any specific purchase, a listing of those products or services that comply with recognized performance
standards or specifications. Listing/Qualification Programs are normally established in situations where:
i. test requirements would adversely affect delivery;
ii. costs of acceptance inspection would be excessive;
iii. prior assurance of product conformance and/or supplier capability is necessary;
iv. complex test equipment and procedures are required; or
v. for products purchased on a regular basis and in large quantities.
Note: Before contracting, contracting officers should verify with the standards (listing) organization,
which product or service offered has been approved. (See 3.150.10 (d).)
b. The inclusion of a product or service on a list implies only that the product or service complies with
recognized performance standards or specifications. Listing does not relieve the supplier of contractual
obligations to deliver items or services meeting all specified requirements, nor does it guarantee
acceptance under a contract.
c. The CGSB and the Department of National Defence (DND) both develop and maintain lists. The
responsible qualifying authority may discontinue the qualification and delete the product from an
existing listing under the following conditions:
i. Formula change. A change in the supplier's formulation of the product that impairs product
quality.
ii. Process change. A change in the supplier's production process that impairs product quality.
iii. Field failure. Authenticated field failure in use, which is attributable to non-conformance of the
product to the relevant standard or specification. Authentication of field failure generally requires
extensive investigation and supporting laboratory tests. Perceived field failures should be reported
by users to the qualifying authority.
iv. Verification failure. Failure to meet requirements in a verification test of the product and/or
system, or failure to submit samples for testing, where requested, or to submit data for
qualification maintenance when requested.
v. Withdrawal for cause. Supplier has ceased operation, changed location, or has consistently failed
to respond to requests for quotation.
vi. Changes to standard or specification. Listings may be cancelled by the responsible qualifying
authority when the governing standards or specifications are cancelled, superseded or amended in
such a manner as to affect existing qualification.
vii. Appeals. Discontinuance may be appealed by the supplier in accordance with appeal procedures
established by the qualifying authority.
Note:When there are indications of non-conformance, and if PWGSC and a client determine that a
qualified bidder does not conform to the applicable standard, the contracting officer must notify the
qualifying authority.
d. When a listing program is used for a procurement, contracting officers must state in the Notice of
Proposed Procurement (NPP), bid solicitation and contract documents that the supplier and its product
must be listed in the following appropriate listing:
i. Qualification Program List (QPL):
A. underlay;
B. security guards;
C. remanufactured toner cartridges;
D. protective clothing;
E. polyethelene vapour barrier;
F. paints;
G. office furniture;
H. medical gloves;
I. Laboratory Acceptance Program;
J. Dockside Monitoring Company;
K. capets;
L. Canadian Non-Destructive Testing Personnel Certification Program;
M. Canadian Air Transport Security Authority screening contractors;
N. breather type sheathing membrane.
ii. Certification Program List (CPL):
A. polyethylene vapour barrier;
B. surgical and patient examination rubber gloves;
C. breather type sheathing membrane;
D. firefighter's protective clothing, protecting against heat and flame;
E. fireline workwear for forest firefighters;
F. Laboratory Acceptance Program.
iii. Registered Quality Systems List ISO 9001 (ISO 9000 Quality Management Systems):
This is a list of companies that are compliant with ISO 9001: 2000 models for quality systems.
Note: ISO 9001: 2000 has replaced ISO 9001, 9002 or 9003.
ISO 9001: 2000 is currently being transitioned to the latest standard version; ISO 9001:9008.
iv. Registered Environmental Management Systems List:

This is a list of companies that are compliant with the ISO 14001:2004 standard for
environmental management systems
v. Certified Occupational Health and Safety Standards (OHSAS) List

This is a list of companies that are compliant with the OHSAS 18001:1999 specification for
health and safety management systems.
vi. Certified Food Safety Management Systems (Alberta and Ontario Hazard Analysis and Critical
Control Point [HACCP] Advantage) List:
A. The Alberta HACCP Advantage (AHA!) Certification Program is the formalized process
whereby a food safety management system is assessed against the AHA! standard of the
Alberta Ministry of Agriculture and Rural Development.
B. The Ontario HACCP Advantage Certification Program is the formalized process whereby a
food safety management system is assessed against the Advantage HACCP standard of the
Ontario Ministry of Agriculture, Food and Rural Affairs.
vii. Certified Drinking Water Quality Systems (Ministry of Ontario) List:

The purpose of the Registration Program is to recognize operating authorities of municipal
residential drinking water systems that demonstrate, through accreditation by an independent third
party, that their quality management systems meet the requirements of the Ontario Drinking Water
Quality Standard, and to recognize operating authorities that are managing their drinking water
systems in a planned and systematic manner.
3.150.15 Department of National Defence Qualified Products Lists

(2010-01-11)
a. batteries;
b. decals, for military identification;
c. electronic components, active: electron tubes, electronic modules, discrete;
d. semiconductors, filters, microcircuits, piezoelectric crystals and oscillators;
e. electronic components, passive: capacitors, connectors, relays and resistors;
f. fire fighting agents and chemicals;
g. flux, liquid soldering, rosin base;
h. gaskets;
i. hose fittings;
j. hydraulics;
k. insulation and packing materials;
l. marine and industrial coatings and related products;
m. mechanical hardware;
n. panels, information, integrally illuminated;
o. petroleum products;
p. plastic sheet, laminated, metal-clad;
q. printed-wiring boards;
r. rubber hoses, tires and tubes;
s. solder, for electronic use;
t. wire and cable.
3.150.20 Canadian General Standard Board

(2012-01-18)
3.150.20.1 Overview of the Canadian General Standard Board

(2015-09-24)
a. The contracting officer must be aware of the Canadian General Standard Board (CGSB) and its
responsibilities. The CGSB is a federal government organization that offers client-centred,
comprehensive standards development and conformity assessment services in support of the economic,
regulatory, procurement, health, safety and environmental interests of our stakeholders - government,
industry and consumers. In the procurement planning stages, the contractor may be required to meet the
standards or specifications of the CGSB for certain requirements and provide a reference in the
solicitation and contract documents.
b. CGSB is accredited by the Standards Council of Canada as a standards-development, product/service

and quality and environmental management systems registration organization. It also provides personnel
certification, advisory and training services related to standards and certification. It is PWGSC's
independent, third party qualifying authority.
Note: There are other accredited standards organizations in Canada, and contracting officer should
contact CGSB for further information.
c. CGSB manages the development and maintenance of consensus standards and specifications, and
develops and maintains qualification, certification and quality and environmental management systems
registration, listing programs to support procurement, good business practice and trade.
d. CGSB also provides expertise and information on standardization, both nationally and internationally;
the assessment of the suitability of standards and specifications; quality and environmental management
systems registration; and qualification/certification of personnel and listing programs for products and
services.
e. The CGSB Catalogue contains: a listing of over 350 standards and specifications in approximately 80
subject areas, in French and English, for products and services; listing programs for a selected number
of these products and services; and other services offered by CGSB.
f. The Personnel Certification Division of CGSB has been selected by the Treasury Board Secretariat as
the certifying body for the Procurement, Material Management and Real Property Certification
Program.
g. Government organizations, suppliers and the general public can obtain CGSB publications, information
on the listing programs or documentation required to apply for a listing by contacting:
Canadian General Standards Board

Place du Portage III, 6B1
11 Laurier Street
Gatineau, Quebec K1A 1G6
Telephone: 819-956-0425
E-mail: ONGC.CGSB@tpsgc-pwgsc.gc.ca
OR
By visiting the Canadian General Standards Board (http://www.tpsgc-pwgsc.gc.ca/ongc-cgsb/index-eng.html) Web
site.
3.150.20.5 New Standards, Specifications or Listings

(2010-01-11)
a. When the need for a new standard, specification or listing program is identified, and no suitable
document or listing is under development, the contracting officer should contact CGSB, or, since clients
are responsible for defining technical requirements, suggest that the client do so.
b. In cases of an urgent need for a new standard or specification, CGSB may be requested to develop a
CGSB standard, as opposed to a Canadian national standard.
c. If the need for a standard is limited to a single client or sector/region, a client/sector/region qualification
program may be instituted. Procedures, which do not limit competition and equity of opportunity for all
suppliers, should be established by the client/sector/region concerned, and distribution of listings should
be restricted if criteria other than technical performance are applied. Where client/sector/region lists are
distributed, the qualification criteria should be stated.
3.150.25 Electrical Equipment

(2010-01-11)
a. The client is responsible for determining whether or not a requirement is subject to the Canadian
Electrical Code, Part l, and for identifying circumstances where certification or approval in accordance
with the Code is required.
b. Suppliers are responsible for complying with applicable building codes and standards, including the
Canadian Electrical Code, Part 1.
c. If the required electrical equipment must be either certified or approved, bid solicitation documents
must contain the appropriate clause specifying the applicable organization accredited by the Standards
Council of Canada. The clauses are listed in the Standard Acquisition Clauses and Conditions Manual,
subsection 5-B.
d. The equipment may be specially inspected by an organization acceptable to Chief Electrical Inspector in
the province, territory or city where the electrical equipment is to be installed and operated.
3.155 Acquisition Cards

(2012-01-18)
3.155.1 Acquisition Cards In Contracting

(2017-06-21)
a. Contracting officers must be aware of the use and application of "acquisition cards". The intent of
acquisition cards is to provide a convenient and less burdensome method of procuring and paying for
goods and services, while ensuring effective financial control. It is government policy to use acquisition
cards for departmental procurement and payment of goods and services (within the levels of
procurement authority delegated to departments) where it is efficient, economical and operationally
feasible to do so. This policy applies to all organizations considered to be departments within the
meaning of section 2 of the Financial Administration Act.
b. Contracting officers are invited to consult the Treasury Board (TB) Directive on Payments (http://www.tbs-
sct.gc.ca/pol/doc-eng.aspx?id=32504) .
3.155.5 Acquisition Card Management

(2010-01-11)
a. The acquisition card has been in the forefront of most procurement and payment process improvements
in client departments. The increasing use of acquisition cards has had an impact on the traditional paper
based control framework. The Office of the Auditor General conducted a government-wide review of
acquisition card usage, and the report stressed the need for better controls and better monitoring by
departments.
b. "Corporate Acquisition Cards" are designed to help eliminate paper in the procurement process. These
cards allow an employee to charge purchases for which full payment is made by the department to the
applicable card provider. There is no fee for the cards and conditional discounts can be obtained in
exchange for faster and/or electronic settlement.
c. Like a personal credit card:
i. the cardholder receives a monthly statement listing purchases;
ii. each cardholder is assigned a credit limit; and
iii. suppliers receive 97 to 98.5 percent of the purchase price within two days of purchase.
d. Unlike a personal credit card:
i. the department is obligated to pay either individual invoices for each card or one "consolidated"
bill summarizing monthly purchases made by all cardholders;
ii. there is a defined maximum liability of $50 to the department in the event of fraudulent use;
iii. there is special application of financial authorities; and
iv. a department can obtain access to all card transactions.
e. The card is issued in the name of the employee designated to do the purchasing; however, the liability
rests with the sponsoring department. Most important, the dollar amount of purchases and monthly
limits associated with acquisition cards are controlled by the card-using organization.
f. The use of acquisition cards within federal government departments and agencies offers very significant
opportunities for savings in the procurement through payment process. Client departments can reduce
and simplify the procurement process of goods and services using acquisition cards. Local purchase
orders and petty cash are eliminated and a single payment is made for multiple purchases. The ease and
flexibility of using the cards provide an incentive to purchase only as the need arises rather than buying
in bulk. By using an acquisition card to make the purchase and then settling these purchases
electronically, departments can realize significant savings. Taken across government, this approach
allows for major cost avoidance in the procurement process.
3.160 Royalty Payments and License Agreements

(2010-01-11)
a. If royalty payments, technical assistance agreements or manufacturing licenses are required or

anticipated as being required, the contracting officer must plan for these events within the procurement
strategy submitted for approval. Establishing these types of agreements can have very long timeframe
and can be a very complex process.
b. In order to carry out certain contracts, primarily for defence, contractors may have to obtain technical
assistance and/or manufacturing licenses from third parties.
c. The usual commercial practice is for the contractor to enter into a technical assistance and/or license
agreement. However, there are cases where it may be more advantageous for Canada to enter, in its own
name, into the license agreement with respect to inventions, patents, copyrights, trade secrets,
trademarks, technical data, know-how and industrial designs.
d. In order to avoid paying for rights that the government already has, contracting officers should check
that no license agreement in Canada's name exists, which could remove the need for royalty payments.
e. Contracting officers should minimize the use of patented products, by calling up performance
specifications rather than product specifications. When there is no alternative, market-based processes
for the supply of patented products through licensed production arrangements, royalties, etc., must be
exhausted before using section 19 of the Patent Act or section 22 of the Defence Production Act.
f. Royalty payments of 5 percent or less of the selling price of the patented item require the Director
approval. A royalty that exceeds 5 percent requires the Deputy Minister approval, before entry into a
contract.
g. If there is an increase in the amount of the royalty to be paid, or if further items become subject to
royalty payments during the life of a contract, the same guidelines for approval apply.
h. To obtain the approval of the Deputy Minister for royalties exceeding 5 percent, the following
information must be provided on Part 2 of the Contract Request:
i. details of the royalties;
ii. a forecast of anticipated future purchases beyond the requirement in the present submission;
iii. the comments of Legal Services.
i. In consultation with Legal Services, the contracting officer must consider the advantages and
disadvantages before deciding that a license should be obtained in the name of Canada or the contractor.
These advantages and disadvantages are to be considered in relation to the nature of the supplies to be
manufactured, the expenditure by Canada, potential purchases by Canada and the relationship between
the potential contractor and the licensor; for example, the contractor may be a subsidiary of the licensor.
j. Advantages- if the license agreement is in the name of Canada, Canada can:
i. negotiate terms and ensure that no restrictions are placed on the use, sale, lease or exchange of
supplies. Such restrictions, if imposed, might interfere with Canada's obligations under
international defence arrangements;
ii. gave unrestricted choice of contractors; and
iii. control the manner in which required technical assistance must be furnished and used.
k. Disadvantages- if the license agreement is in the name of Canada, Canada may:
i. become involved in contractual negotiations apart from the contract it is presently interested in;
ii. have to assume onerous burdens dealing with secrecy, non-disclosure and informing the licensor
of improvements and developments;
iii. be bound by all terms of the agreement and be required to pay royalties at a set rate and assume
other burdens for a long period.
l. Royalties required to be paid by contractors and their subcontractors to third parties, in the performance
of a defence contract, will be paid if they are valid costs in the bid, and the amounts being charged are
acceptable to Canada.
m. Where the license agreement must be in the name of the contractor, approval to enter into such an
agreement may be obtained as part of the authority for the purchase of the goods and/or services.
n. Where the license must be in the name of Canada, the contracting officer, when negotiating the license
agreement and the amount of the royalty payment, should take into consideration the following:
i. manufacturing rights, including use of licensor's patents and designs;
ii. technical assistance, including:
A. supply of plans, drawings, specifications, etc.;
B. engineering person-days provided by the licensor both at its own plant and the plant of the
manufacturer selected by Canada;
C. travel and living expenses of the licensor's representatives;
iii. obtaining for Canada the right to modify or have modified the plans, drawings, etc., and, if
required, the right to build or have built or to repair or have repaired the articles in question by a
party other than the licensor.
o. Approval of the Assistant Deputy Minister is required before entry into any contractual agreement that
exercises the rights of Canada under section 22 of the Defence Production Act or section 19 of the
Patent Act. Exercising the rights granted to Canada under these acts must only be carried out in
exceptional circumstances as warranted by consideration of the public interest, and after market-based
processes have been exhausted. Note:Examples of these circumstances would include refusal by a patent
holder to produce or license others to produce a product vital to the defence of Canada, or where
monopoly power conferred by the patent is being abused to impose unconsciously high prices upon
Canada. It would be very unusual to find these rights exercised for other than defence supplies.

(2010-01-11)
a. As of April 30, 2001, no new controlled goods can be provided unless persons are registered, exempt or
excluded by the Canadian Industrial Security Directorate. Bill S-25 amended the Defence Production
Act and established a new regime for regulating access to certain controlled military and military related
goods, technical data and technology, referred to as controlled goods.
b. Even if there are no controlled goods in a bid solicitation, there may be situations where proposals
submitted by bidders could contain controlled goods. Controlled goods cannot be released to persons
that are not registered, exempt or excluded under the Controlled Goods Program.
3.170 Shipbuilding, Repair, Refit and Modernization

(2017-07-01)
The PWGSC procedures for sourcing suppliers to work on Canadian government vessels derive from the
government's Shipbuilding, Repair, Refit and Modernization Policy. The objective of the Policy is to encourage
competition amongst Canadian shipyards. For all competitive shipbuilding requirements, as defined in the
above-mentioned Policy, subject to the Canadian Free Trade Agreement or Agreement on Internal Trade
(http://www.ic.gc.ca/eic/site/ait-aci.nsf/eng/home) , contracting officers must ensure that the details of the restrictions or
practices are highlighted in the Notice of Proposed Procurement and the bid solicitation.
3.170.1 Information to be included in Notice of Proposed Procurement and Contract

Award Notice
(2010-08-16)
The NPP or bid solicitation must contain the following statement:
"The sourcing strategy relating to this procurement will be limited to suppliers in the Province or Territory or
Origin (as applicable) or the Area of Origin (as applicable) in accordance with the Shipbuilding, Repair Refit
and Modernization Policy."
For procurements below $2 million subject to the Shipbuilding, Repair Refit and Modernization Policy, the
Contract Award Notice must also contain these details.
3.170.5 Shipbuilding Procurement

(2013-08-30)
Note: The following procedures apply only when the procurement is not subject to NAFTA and WTO–AGP.
NAFTA, Chapter 10, Annex 1001.2b paragraph 1.(a) and WTO–AGP Annex 4 Services
(http://www.wto.org/english/tratop_e/gproc_e/can4e.doc) (Word Format 55.5 KB) (Help on File Formats), exempts
"shipbuilding and repair".
a. Terms specific to the sourcing strategy of shipbuilding, ship repair, refit and mid-life modernization
procurements are as follows:
i. Origin of the vessel - the operational home port of the vessel.
ii. Area of Origin - the following Areas of Origin are recognized: Eastern Canada: Atlantic Canada
(Newfoundland and Labrador, Prince Edward Island, Nova Scotia and New Brunswick), Quebec
and Ontario. Western Canada: All shipyards west of Ontario and those in the Yukon, Nunavut and
Northwest Territories.
iii. Province or Territory of Origin - All Provinces or Territories of Origin are recognized.
b. For procurements $25,000 and below, competitions may be limited to the Province or Territory of
Origin of the vessel.
c. For new construction requirements over $25,000, competitions are to be conducted on a nation-wide
basis when the following conditions are present:
i. The statement of requirement is sufficiently defined to permit assessment of competing bids by

common standards.
ii. Available shipyards, both in Eastern Canada and in Western Canada, have the technical capability
to perform the work.
iii. The vessel being procured is of a type that can be transferred and for which contingency costs
(see 3.170.10 (c)) are not unrealistic in relation to the total price.
d. For new construction requirements over $25,000, competitions are to be conducted within the Area of
Origin when all conditions, except c.iii. above, are present.
3.170.10 Ship repair, refit and modernization

(2010-08-16)
a. For ship repair, refit and mid-life modernization requirements over $25,000, competitions are to be
conducted within the Region of Origin of the vessel, provided adequate competition exists.
b. If adequate competition (two or more bidders) does not exist, the requirement may still remain in the
Area of Origin provided a satisfactory contractual agreement can be reached with the one available
capable shipyard. If a satisfactory contractual agreement cannot be reached, the competition is to be
extended on a nation-wide basis.
c. Contingency costs for ship repair, refit and modernization requirements shall be only those costs which
are directly related with the transfer of the vessel as defined below:
i. For vessels that can be transported unmanned:Solicitation documents will specify the pick-up
point and the delivery point. Bidders will be required to provide a cost to transport the vessel from
the pick-up point and once the work is completed, a cost to transport the vessel to the delivery
point. In cases where the Government will retain responsibility for delivery of the vessel to and
from the shipyard/ship repair facility and the vessel's home port, using commercial towing,
railway, highway transportation or other suitable means, solicitation documents will identify the
cost of such transportation as the vessel transfer cost that will be added to the evaluation price.
(See SACC Manual clause A0240T)
ii. For vessels that are manned for transport: Solicitation documents will identify the contingency
cost that will be added to the evaluation price for the transfer of the vessel and its minimum
delivery crew based on the geographical distance to and from the vessel's home port location and
the shipyard/ship repair facility where the work will be undertaken, and:
A. The fuel cost based on the current market price for fuel and the vessel's fuel consumption at
its most economical speed.
B. For unmanned refits, transportation costs for the minimum delivery crew base on the latest
Treasury Board directives. (See SACC Manual clause A0240T)
C. For manned refits, contingency costs shall only include the fuel costs for transferring the
vessel and shall not include any costs for transporting the crew. (See SACC Manual clause
A0240T)
d. Procurements by direct allocation of contracts to specific shipyards are to be made only in cases where
the conditions permitting nation-wide, area and Province or Territory competitions are not present. Such
cases will arise when one or more of the following conditions exist:
i. Only one shipyard is capable of performing the work.
ii. Performance of the work necessitates access to particular facilities that are adjacent to one
shipyard.
iii. The statement of requirement is not sufficiently defined to permit assessment of competitive bids
by common standards.
iv. Emergency requirements necessitate use of the nearest yard capable of performing the work.
v. Special operational considerations of the client limit movement of the vessel beyond a specified
location.
3.175 United States Defense Related Procurement

(2010-01-11)
a. Procurements by Canada for military goods and services are often related and technically integrated for
the same or similar goods and services as United States ( U.S.) military procurements. As a result,
Canada and U.S. have agreed to share or permit access to technical data and material that may not be
readily accessible for the advancement of a procurement.
b. The contracting officer must be aware that in the procurement planning and strategy development that
agreements and processes exist between Canada and U.S. to facilitate access to technical data and
material. For more information, see Chapter 9 - Special Procurements.
c. There are three areas of concern to the contracting officer in procurement planning as it applies to
military procurements as part of the Canada/ U.S. joint procurement efforts:
i. Joint Certification Program;
ii. Foreign Military Sales; and
iii. U.S. Defense Priorities and Allocations System.
3.176 Public Works and Government Services Canada Europe Office Procurement –
Germany
(2014-06-26)
Based on Canada’s obligations under the North Atlantic Treaty Organization (NATO) – Status of Forces
Agreement, all solicitations, contracts, and procurements initiated by the Public Works and Government
Services Canada Europe Office (PWGSC Europe) in Koblenz Germany must adhere to German law. That being
said, all PWGSC Europe procurements must still respect the Acquisitions Program procedures and policies to
the greatest extent possible.
3.180 Joint Certification Program

(2010-01-11)
A Memorandum of Understanding (MOU) between the Minister of National Defence and the U.S. Secretary of
Defense established a Joint Certification Program, which allows certified contractors of each country access, on
an equally favourable basis, to unclassified technical data of both countries. It also ensures that effective and
appropriate controls and enforcement mechanisms are in place in each country to protect such technical data.
The Technical Data Control Regulationsare the authority for implementing this program.
3.185 Foreign Military Sales

(2016-01-28)
a. The Foreign Military Sales (FMS) program is a mutually beneficial government-to-government method
for the procurement of United States (U.S.) defence articles and services.
b. Sole sourcing through the FMS program may be considered as a method of procurement when the
goods or services required relate to military equipment of U.S. origin and when, on the basis of the
information available at the time, those goods and services are available or can be made available from
the U.S. Department of Defense.
c. When Public Works and Government Services Canada Headquarters (PWGSC) determines that a
requirement will be sole-sourced through the FMS program, the requisition is reallocated to PWGSC
Washington. The decisions to sole source requirements through the FMS program must be adequately
documented.
d. More information on the FMS program is provided in section 9.15 United States Foreign Military Sales.
3.190 U.S. Defense Priorities and Allocations System

(2013-01-28)
a. The U.S. Defence Priorities and Allocations System (DPAS) is intended to assure the timely availability
of industrial resources to meet current national defence and emergency preparedness program
requirements and provide an operating system to support rapid industrial response in a national
emergency. Priority ratings are intended to support approved defence programs with some exceptions.
b. Contracting officers should seek assistance from the Central Allocations and Defence Priorities Officer,
Office of Small and Medium Enterprises and Strategic Engagement to determine whether the system
may be utilized for U.S. procurements when dealing with a contract with a defence requirement. Before
contract award, and with consideration of the foregoing, contracting officers must insert the appropriate
Standard Acquisition Clauses and Conditions Manual clause in all Canadian defence contracts placed
with U.S.-based suppliers and in all Canadian defence contracts placed with Canadian-based suppliers.
c. For a variety of reasons, U.S.-based suppliers may be unable to deliver material to Canadian-based
contractors, within the timeframes specified, despite the prompt application for and the timely issuance
of a priority rating.
3.195 Risk Management

(2012-01-18)
3.195.1 Treasury Board Secretariat Risk Management Policy

(2017-08-17)
a. The Treasury Board (TB) Risk Management Policy (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=19422) provides

the framework for managing risks within the Government of Canada.
b. The objective of the Policy is to safeguard the government's property and interests, and the interests of
its employees as they do government work. TB is responsible for monitoring the effectiveness of the
Policy in assisting department's risk management programs.
c. The Policy mandates that it is the responsibility of each department to effectively manage its own risks.
Departments are responsible for adequate and timely compensation, restoration, and recovery of losses
in the event of harmful or damaging incidents arising within their department. Departments must
comply with the following TB policies: Policy on Legal Assistance and Indemnification (http://www.tbs-
sct.gc.ca/pol/doc-eng.aspx?id=13937) ; and Directive on Payments (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=32504) .
For more information on claims for extra payment, see 8.55 Claims for Extra Payment.
d. Public Works and Government Services Canada (PWGSC) manages risks linked to the procurement
process by applying sound procurement plans and contract structure that reduce Canada's loss exposure.
PWGSC works with client departments during the contracting process to facilitate clients' understanding
of the risk management process relating to their responsibilities.
3.195.5 Risk Management Process for Limiting a Contractor's Liability

(2011-10-04)
3.195.5.1 Risk management process for limiting a contractor's liability - General

information
(2015-09-24)
The risk management process, simply put, is a management process that applies to risk and it involves the
following steps:
a. risk identification and analysis;
b. examination of the risk management techniques;
c. selection of the appropriate technique(s);
d. implementation of the selected technique(s); and
e. monitoring of the results.
3.195.5.5 Risk Assessment

(2010-01-11)
a. Risk assessment is the process whereby risks and their potential outcomes are identified and measured
according to their probability of occurrence and degree of severity. The outcome of the risk assessment
is a report on the quantified value of the risks and it is used to guide decision-making in the contracting
process. The risk assessment is an important tool because it forms the basis of risk-based decision-
making.
b. Risk assessments are conducted by client organizations, as the requisitioning authorities, and they can
vary in depth and complexity. Risk assessments can be performed by contracted firms under a standing
offer or directly by a client organization. The decision as to who conducts the risk assessment will take
into account technical capacity, resources and funding.
c. Each risk assessment will examine and measure the sources of potential loss (exposures) over which a
contractor has control. The risk assessment can also identify and segregate the exposures over which the
client department has control. Examples of general exposures include property, assets, legal liability,
personnel and reputation.
d. The risk assessment will draw on the various risks that the client organization identifies. Information on
risks can come from a variety of sources, such as records and data; questionnaires; surveys and
exploratory testing; and process maps.
3.195.5.10 Risk Control

(2010-01-11)
Risk control comprises risk treatment that requires taking action to avoid, prevent, reduce or transfer losses.
Risk control can occur before, or after, a loss event. The various methods of loss control usually require on
organization to develop, implement and maintain various processes and procedures to ensure the effectiveness
and success of the risk control program.
a. Loss avoidanceis the technique by which an organization will refrain from various activities because of
the severe nature of the risk. For example, a contractor can exit a certain line of business because losses
incurred by that business threaten the viability of the firm. For example, a food services firm may sell
off its tobacco business line due to the potential for costly class action lawsuits.
b. Loss preventionis the technique used to prevent losses from occurring, or to reduce their likelihood of
occurrence. Loss prevention measures are often found in engineered or automated processes, such as
intrusion detection and access control. In their simpler form, loss prevention measures can include
elements such as wide-angle mirrors on vehicles to prevent collisions while reversing.
c. Loss reductionis the technique used to reduce the impact of a loss once it has occurred. Loss reduction
measures can include engineered systems, such as automatic fire suppression systems (e.g. sprinklers).
They can be found in business applications process, such as business continuity plans or crisis
management programs.
d. Contractual transfer for risk controlis a risk control measure that uses contract conditions to transfer the
risk of loss and/or the obligation to control loss to a contractor. The most notable form is the contractual
requirement for indemnification, which requires the contractor to make good losses it causes. In addition
to indemnification, a contract may contain other conditions, such as liability for loss, which can be
specifically targeted to certain types of loss and the amount of financial obligation. In addition, the
contractor may be required to manage and monitor losses it incurs in the delivery of the contract and
report to the clients.
3.195.5.15 Risk Financing

(2010-01-11)
a. Risk financing is the technique through which organizations provide funding for potential losses.
Although the most commonly known form of risk financing is insurance, there are other methods that
are frequently used. Canada uses the "self-underwriting" option in the management risks to which it is
exposed and over which it has control.
b. Canada uses the self-underwriting option as a default approach for its own risk financing because it has
the legislative authority and capacity as a sovereign entity to raise funds directly to pay for losses.
c. Contractors are responsible for financing the risks under their control. Contractors will most often use
commercial insurance to finance their risks, although other risk financing options are available.
Contractors use the commercial insurance market to obtain insurance and within the marketplace,
insurance policies are underwritten and financed by insurers, with insurance brokers fulfilling the roles
of marketing and distribution.
d. Contractors can manage risk financing on a variety of models:
i. Insurance transfer, where the contractor purchases commercial insurance with standard
deductibles, transferring most of the financial risk to the insurer in exchange for premium.
ii. Self Insured retention, where the contractor assumes financial responsibility to a certain level and
transfers risk above that level to insurers. This differs from a deductible because the contractor
will manage the retained risk through risk control and self-funding measures.
iii. Alternative risk financing,which involves other forms of risk financing sources, such as capital
and bond markets and "captive" insurance.
e. Canada can exercise the following risk financing options in contracting to ensure an appropriate level of
financial protection from contractors:
i. contractor controlled insurance, wherein Canada self-underwrites its own risks and relies upon the
judgement of the contractor to determine its own insurance requirements;
ii. g overnment specified insurance, where Canada self-underwrites its own risks and specifies the
types and minimum coverage limits of insurance that the contractor must maintain;
iii. g overnment controlled insurance, where Canada purchases and controls the insurance as a way of
obtaining economies of scale in project involving multiple parties.
3.200 Contractor Liability

(2012-01-18)
3.200.1 Contractor liability - General information

(2016-01-28)
a. The Treasury Board (TB) Secretariat Policy on Decision Making in Limiting Contractor Liability in
Crown Procurement Contracts (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/Contracting/dmlc-pdlr_e.asp) governs the
process for limiting contractor liability. Contracting officers are required to understand the application
of the Policy in order to ensure compliance and to protect the interests of the Government of Canada.
The Policy applies to all Canadian procurements subject to the Government Contracts Regulationsand
the TB Contracting Policy for risks under the control of the contractor.
b. The Policy forms the framework for risk-based decision-making, enabling the appropriate application
and apportionment of liability risk in contracts. The Policy details the steps and necessary approvals that
must be followed, when limiting contractor liability, in order to ensure effective program management
and service delivery for the benefit of Canadians. A key element of risk-based decision-making is the
requirement for risk assessments to be performed by client departments.
c. The Policy identifies four procurement models that prescribe the extent to which a contractor's liability
may be limited and the level of approval required:
i. Model 1 represents the most common type of procurement contracts and accounts for about
90 percent of all Canada procurement contracts. Under this model, only the contractor's liability
to Canada (first party liability) may be limited. Commodity groupings have been established for
commonly purchased commodities over which a general risk assessment has been conducted.
Under this model, limiting third party liability and indemnification of the contractor requires TB
approval.
ii. Model 2 includes complex procurements that have a high degree of uncertainty or risk because of
the untested nature of the technology or the unproven, unique or developmental nature of the
deliverable. Under this model, PWGSC has the authority to limit first party liability. Limiting
third party liability or indemnification of the contractor requires TB approval.
iii. Model 3 includes contracts where there is limited scope for negotiating liability provisions, such
as government-to-government agreements, or where no other viable alternative to serve a program
requirement exists. Under this model, PWGSC can limit third party liability. Indemnification of
the contractor requires TB approval.
iv. Model 4 pertains to highly specialized services contracts in support of ensuring the health, safety
and the economic well being of Canadians. Under this model, PWGSC can limit first party
liability. Limiting third party liability or indemnification of the contractor requires TB approval.
3.200.5 Indemnification
(2010-01-11)
Indemnification is the requirement for one party to a contract to make the other whole when the latter has
suffered a loss. The current default position of Canada on indemnification in procurement contracts is to remain
silent. This enables both the parties to rely on their respective rights at law in the event of a loss. Exceptions to
this position are where:
a. It may not be in Canada's financial interest to rely on Common Law or the Civil Code.
b. The terms of a commodity grouping include the specific indemnification of Canada by the contractor.
c. Canada agrees to indemnify the contractor due to exceptional circumstances or where the procurement
falls under the terms of a Foreign Military Sale. Under this condition, the client department must
assume financial responsibility for the substantive transfer of risk to Canada, as determined by a risk
assessment. Substantive transfer occurs where the assessed risk value exceeds the limitation of the
limitation of the contractor's liability.
3.205 Review Process for Creation, Renewal and Extension of Standing Offers and
Supply Arrangements
(2015-07-29)
a. The Office of Primary Interest (OPI) for specific goods or services is referred to as the Category
Management Team and each team has a Category Reviewer responsible for endorsing the creation,
extension or renewal of all Standing Offers (SOs) and Supply Arrangements (SAs).
b. Contracting officers are encouraged to engage a Category Reviewer early in and throughout the
procurement planning phase to obtain input, with a view to expediting the endorsement process.
c. Before creating, renewing or extending an SO or SA, contracting officers must submit a Category
Management Request for Category Reviewer Endorsement form (MSWord Version 105 KB) - (Help
on File Formats) to the appropriate Category Reviewer, who will evaluate the request and subsequently:
i. endorse the request without comment or recommendations;
ii. endorse the request with comments, recommendations, or conditions (conditional endorsement);
or
iii. decline the request and provide supporting rationale.

d. Should a required product or service not appear under a specific category, the contracting officer must
seek endorsement of the SO or SA from:
i. the supervisor or manager in the National Capital Area (NCA); or
ii. the Regional Category Reviewer outside the NCA.
e. Supporting rationale from the Category Reviewer must be included in the approval documentation,
should the creation, renewal or extension of an existing SO or SA require the duplication an existing SO
or SA.
f. Should the Category Reviewer conditionally endorse or decline the request, it may be resubmitted upon
its revision.
g. Contracting officers must include the Category Reviewer’s final decision and evaluation documents in
the Contract Planning and Advance Approval (CPAA) or Procurement Plan.
h. For details, consult the Decision Tree for Creation, Renewal and Extension of Standing Offers and
Supply Arrangements (PDF Version 60.4 KB) - (Help on File Formats).
i. To contact a Category Reviewer consult the Category Management List of Category Reviewers (PDF
Version 72.6 KB) - (Help on File Formats).
3.205.1 Review Process

(2015-07-29)
In support of PN-72R2 Review Process for Creation, Renewal and/or Extension of Standing Offers and Supply
Arrangements, the content of this section was reviewed and moved to section 3.205 Review Process for
Creation, Renewal and Extension of Standing Offers and Supply Arrangements.
3.205.5 Posting Standing Offer and Supply Arrangement Information to the Standing
Offer Index
(2015-07-29)
a. Within five working days of the issuance of the Standing Offer/Supply Arrangement (SO/SA) on the
Standing Offer Index (SOI), contracting officers of the SO/SA issuing office must submit information to
the Standing Offer Coordination Office (SOCO) in one of the following format:
i. the original SO/SA document (in PDF format, with no digital signature), including, when
applicable, all subsequent revisions;
ii. a document containing detailed information specific to the SO/SA, including PWGSC contact
information and PWGSC intranet websites when applicable; or
iii. a PWGSC intranet website link that contains information specific to the SO/SA.
NOTE: Regional Individual Standing Offers (RISO) and National Individual Standing Offers (NISO)
will be addressed on a case-by-case basis. Posting information to the SOI is optional when the manager
responsible for issuing the SO/SA has determined that the client has all the necessary information to
expedite the procurement.
b. Contracting officers must flag the following criteria, where applicable, by filling in the appropriate
checkboxes in the SOI Information Posting Template (MSWord Version 42 KB) - (Help on File
Formats):
i. holder is an Aboriginal Business;
ii. products or services have a reduced environmental impact and/or the supplier has an
environmental policy or environmental practices;
iii. products or services may be delivered within a Comprehensive Land Claims Agreement (CLCA)
area;
iv. SO/SA involves the Procurement Strategy for Aboriginal Business (PSAB) (must be indicated in
the Notes section of the template).
c. Requests to post information on the SOI must be sent by email along with the completed SOI
Information Posting Template to the Standing Offer Coordination Office (SOCO) at rcn.bcoc-
ncr.soco@tpsgc-pwgsc.gc.ca.
3.205.10 Use of Departmental Standard Procurement Documents

(2015-07-29)
a. To issue a Request for Standing Offer (RFSO) or a Request for Supply Arrangement (RFSA),
contracting officers must use the appropriate Standard Procurement Template.
b. Standard Acquisition Clauses and Conditions (SACC) must be used when preparing procurement
documents. Alternative clauses may be used under special circumstances, subject to approval by Legal
Services.
c. Should a non-standard clause become a repetitive requirement, a request to include it in the SACC
Manual must be submitted to the Procurement Process Tools Division, Acquisition Policy and Process
Directorate at the following address: Outilsd'approvisionnement.ProcurementTools@tpsgc-pwgsc.gc.ca.
3.205.15 Reporting Usage Data

(2015-07-29)
To ensure effective management and monitoring of Standing Offers and Supply Arrangements (SOs/SAs),
contracting officers must give advanced consideration to the associated reporting requirements and how best to
meet them. Data sources for SOs/SAs include, but are not limited to the following:
a. Standing Offer Index (SOI);
b. client departments;
c. in-house tracking systems;
d. Category Management Teams;
e. Business Analytics Services Directorate (BASD); and
f. offerors or suppliers.
Annex 3.1: Treasury Board Questions for Sole Source

(2017-09-21)
Provide responses, as applicable, to the questions contained in the template below in order to explain and justify
why exception 6.(d) of the Government Contracts Regulations (GCRs) has been invoked to allow a sole source
goods or services contract. All of the questions must be considered and answered by the contracting officer with
the assistance of the client department, including confirmation, where appropriate, that the question is not
applicable to the contract or standing offer under review. Some guidance is also provided for assistance in
responding to the questions.
Note: In the case of a services contracts or standing offers, contracting officers should satisfy themselves that
the contract in question is the right instrument, as opposed to such instruments as, but not limited to: a grant; a
contribution; or, an employment contract i.e. a term, casual or ministerial appointment.
Treasury Board questions for client answers for sole source procurements.
NO. QUESTION CLIENT'S ANSWER
Is the proposed sole source If answer is "yes", identify what was the previous procurement
contract linked to a previous strategy that was conducted with PWGSC. Identify the
procurement and strategy for PWGSC file number for the previous contract (i.e. original
obtaining additional quantities procurement was posted "competitively" and it was identified
and/or in-service support? If yes, that additional equipment would be purchased in the future
what was the approved strategy? with the successful vendor).
Notwithstanding the approved If the answer was "yes" to question %1, can this requirement
1
strategy, is it feasible and/or be issued as a competitive requirement?
affordable to compete the
If the answer is "no", then answer the additional question
requirement?
below.
If not, provide the related Explain why this requirement cannot be issued as a
rationale in terms of cost, "competitive" requirement.
schedule, etc.
2 Does the Vendor or its approved If answer is "yes", you would indicate the vendor details and
distributors have exclusive state whether they are: the Original Equipment Manufacturer
ownership of, and rights to use, (OEM) or the sole authorizer value-added reseller.
the intellectual property (IP) for
Clearly indicate why we are going directly to this company, for
the goods or services in
ex.:
question? If yes, provide details.
What rights, if any, does the a. We are dealing directly with the OEM, ABC Ltd, as they
are the owners, developers of the equipment and owners
Crown have to use the IP?
of the IP. They do not authorize value-added resellers or
distributors for their equipment.
b. We are dealing with XYZ Distribution Inc. as they are the
sole distributor and only approved value-added reseller
authorized to sell and support in Canada the equipment
built by the OEM, ABC Ltd.
Are there legal and/or regulatory Is there any provincial and federal legislation that directs client
considerations precluding open to only purchase the described requirement.
3 competition for this good or
service? If yes, provide details.
Are there alternative sources of If you are using Government Contracts Regulations, exception
supply for the same or 6 d), then you would indicate there are no alternate sources of
equivalent materiel/support? If supply that can meet the mandatory performance specifications
no, explain. identified by you the client. You would reference the attached
sole source justification.
If yes, what other options were If the answer is "Yes", and there are alternate sources of
considered and why were they supply, then we should be going out to competition.
not recommended?
4 If research has been done, to confirm there is only a
manufacture than can meet the mandatory performance
specifications, then we should indicate what has been done.
Note: To have different manufacturers "pre-tested" or

"benchmarked" thru an evaluation process is not acceptable,
unless it was done thru a competitive process with PWGSC.
Also, simply because the manufacturer is the "best" or the
"lowest price" is not acceptable, without a competitive process
thru PWGSC.
5 Is the proposal related to Must the equipment required be compatible with existing
commonality/compatibility with equipment?… existing software? Or existing equipment at
existing equipment? If yes, what other facilities in Canada, North America, and the World?
are the operational
If the answer is "Yes", at a minimum, we need to:
costs/implications of managing
multiple versions? a. Clearly identify which equipment and or software the
client (or other research centers) has that must be
compatible with current requirement.
b. Identify what "compatible" means to client. Do the
machines communicate with one another from facility-to-
facility? Are samples cross-examined and compared from

facility to facility? We need to be specific.
c. Identify what the operational costs and the implications of
managing multiple versions. (multiple manufacturers,
multiple software programs). What would be the price of
non-conformance for client? Cost to retrain? Cost to
revise protocols, procedures, processes? Is there a cost to
delaying this program any further?
Explain why the price is fair and Client can provide any preliminary information received from
reasonable; describe how price the vendor. (financial quote). Also, PWGSC, as the contracting
6 support was obtained; and officer will be responsible for negotiating a fair and reasonable
summarize negotiations. price and ensuring the prices are fair and reasonable to
Canada.
7 Are there any other factors that

have led to a recommendation
for a non-competitive process?
If yes, provide details and
rationale.
(a) What is the likelihood of an Is there the possibility of additional equipment, additional
amendment or follow-on warranty services? Then we should be implementing "options-
contract to the same person? to-purchase" within the contract.
Describe the efforts taken to Have there been any efforts made by client to identify potential
identify a variety of suppliers suppliers and determine what is available within the vendor
and explain any impact the community?
Trade Agreement thresholds or
PWGSC will advise which trade agreements would be
TB Contracts Directive contract
applicable.
entry/amendment limits will
have on the proposed " PWGSC Supply Specialist consulted with the client in
procurement strategy. regards to future requirements and the client has confirmed
that no follow-on equipment will be required"… OR… "
PWGSC Supply Specialist consulted with Client in regards to
future requirements and the client has confirmed that there
could be the potential for follow-on equipment, therefore
options to purchase additional equipment will be incorporated
within the contract."
PWGSC will post an ACAN on the Government Electronic

Tendering Service (GETS) to ensure there are no suppliers that
can actually meet this requirement.
This requirement is subject to the following trade agreements:

CFTA/AIT, NAFTA, CETA, WTO-AGP.
(b) Given the nature of your Client to identify any long-term procurement strategies to
organization's mandate, describe address future needs:
any efforts taken to put in place
Client to investigate potential consolidation of opportunities
long-term procurement
with other departments.
arrangements to address similar
requirements/activities in future Client to encourage PWGSC to include an additional range of
(e.g., establish standing offer). equipment in any future standing offers whenever possible.
PWGSC will also identify the National Commodity Team

Lead and discuss the possibility of including this requirement
with any future standing offers.
Annex 3.2: Limited Tendering Reasons contained in the Trade Agreements

(2017-09-21)
Note that the Contract Award Process (CAP) codes for each award type are included for reference.
1. The limited tendering reasons for the North American Free Trade Agreement (NAFTA) are included
below.
Article 1016: Limited Tendering Procedures
1. An entity of a Party may, in the circumstances and subject to the conditions set out in paragraph 2,
use limited tendering procedures and thus derogate from Articles 1008 through 1015, provided
that such limited tendering procedures are not used with a view to avoiding maximum possible
competition or in a manner that would constitute a means of discrimination between suppliers of
the other Parties or protection of domestic suppliers.
2. An entity may use limited tendering procedures in the following circumstances and subject to the
following conditions, as applicable:
a. in the absence of tenders in response to an open or selective call for tenders, or where the
tenders submitted either have resulted from collusion or do not conform to the essential
requirements of the tender documentation, or where the tenders submitted come from
suppliers that do not comply with the conditions for participation provided for in
accordance with this Chapter, on condition that the requirements of the initial procurement
are not substantially modified in the contract as awarded; (CAP Code 05)
b. where, for works of art, or for reasons connected with the protection of patents, copyrights
or other exclusive rights, or proprietary information or where there is an absence of
competition for technical reasons, the goods or services can be supplied only by a particular
supplier and no reasonable alternative or substitute exists; (CAP Code 71)
c. in so far as is strictly necessary where, for reasons of extreme urgency brought about by
events unforeseeable by the entity, the goods or services could not be obtained in time by
means of open or selective tendering procedures; (CAP Code 81)
d. for additional deliveries by the original supplier that are intended either as replacement
parts or continuing services for existing supplies, services or installations, or as the
extension of existing supplies, services or installations, where a change of supplier would
compel the entity to procure equipment or services not meeting requirements of
interchangeability with already existing equipment or services, including software to the
extent that the initial procurement of the software was covered by this Chapter; (CAP Code
74)
e. where an entity procures a prototype or a first good or service that is developed at its
request in the course of and for a particular contract for research, experiment, study or
original development. Where such contracts have been fulfilled, subsequent procurement of
goods or services shall be subject to Articles 1008 through 1015. Original development of a
first good may include limited production in order to incorporate the results of field testing
and to demonstrate that the good is suitable for production in quantity to acceptable quality
standards, but does not include quantity production to establish commercial viability or to
recover research and development costs; (CAP Code 72)
f. for goods purchased on a commodity market; (CAP code 20)
g. for purchases made under exceptionally advantageous conditions that only arise in the very
short term, such as unusual disposals by enterprises that are not normally suppliers or
disposal of assets of businesses in liquidation or receivership, but not routine purchases
from regular suppliers; (CAP code 21)
h. for a contract to be awarded to the winner of an architectural design contest (CAP code 22),
on condition that the contest is:
i. organized in a manner consistent with the principles of this Chapter, including

regarding publication of an invitation to suitably qualified suppliers to participate in
the contest,
ii. organized with a view to awarding the design contract to the winner, and
iii. to be judged by an independent jury; and
i. where an entity needs to procure consulting services regarding matters of a confidential

nature, the disclosure of which could reasonably be expected to compromise government
confidences, cause economic disruption or similarly be contrary to the public interest.
3. An entity shall prepare a report in writing on each contract awarded by it under paragraph 2. Each
report shall contain the name of the procuring entity, indicate the value and kind of goods or
services procured, the name of the country of origin, and a statement indicating the circumstances
and conditions described in paragraph 2 that justified the use of limited tendering. The entity shall
retain each report. They shall remain at the disposal of the competent authorities of the Party for
use, if required, under Article 1017, Article 1019 or Chapter Twenty (Institutional Arrangements
and Dispute Settlement Procedures)
2. The limited tendering reasons for the World Trade Organization – Agreement on Government
Procurement(WTO-AGP) are included below.
Article XV: Limited Tendering Procedure
1. The provisions of Articles VII through XIV governing open and selective tendering procedures
need not apply in the following conditions, provided that limited tendering is not used with a view
to avoiding maximum possible competition or in a manner which would constitute a means of
discrimination among suppliers of other Parties or protection to domestic producers or suppliers:
a. in the absence of tenders in response to an open or selective tender, or when the tenders
submitted have been collusive, or not in conformity with the essential requirements in the
tender, or from suppliers who do not comply with the conditions for participation provided
for in accordance with this Agreement, on condition, however, that the requirements of the
initial tender are not substantially modified in the contract as awarded; (CAP code 05)
b. when, for works of art or for reasons connected with protection of exclusive rights, such as
patents or copyrights, or in the absence of competition for technical reasons, the products or
services can be supplied only by a particular supplier and no reasonable alternative or
substitute exists; (CAP code 71)
c. in so far as is strictly necessary when, for reasons of extreme urgency brought about by
events unforeseeable by the entity, the products or services could not be obtained in time by
means of open or selective tendering procedures; (CAP code 81)
d. for additional deliveries by the original supplier which are intended either as parts
replacement for existing supplies, or installations, or as the extension of existing supplies,
services, or installations where a change of supplier would compel the entity to procure
equipment or services not meeting requirements of interchangeability with already existing
equipment or services5; (CAP code 74)
e. when an entity procures prototypes or a first product or service which are developed at its
request in the course of, and for, a particular contract for research, experiment, study or
original development. When such contracts have been fulfilled, subsequent procurements of
products or services shall be subject to Articles VII through XIV 6. (CAP code 72)
f. when additional construction services which were not included in the initial contract but
which were within the objectives of the original tender documentation have, through
unforeseeable circumstances, become necessary to complete the construction services
described therein, and the entity needs to award contracts for the additional construction
services to the contractor carrying out the construction services concerned since the
separation of the additional construction services from the initial contract would be difficult
for technical or economic reasons and cause significant inconvenience to the entity.
However, the total value of contracts awarded for the additional construction services may
not exceed 50 per cent of the amount of the main contract;
g. for new construction services consisting of the repetition of similar construction services
which conform to a basic project for which an initial contract was awarded in accordance
with Articles VII through XIV and for which the entity has indicated in the notice of
intended procurement concerning the initial construction service, that limited tendering
procedures might be used in awarding contracts for such new construction services;
h. for products purchased on a commodity market; (CAP code 21)
i. for purchases made under exceptionally advantageous conditions which only arise in the
very short term. This provision is intended to cover unusual disposals by firms, which are
not normally suppliers, or disposal of assets of businesses in liquidation or receivership. It
is not intended to cover routine purchases from regular suppliers; (CAP code 21)
j. in the case of contracts awarded to the winner of a design contest provided that the contest
has been organized in a manner which is consistent with the principles of this Agreement,
notably as regards the publication, in the sense of Article IX, of an invitation to suitably
qualified suppliers, to participate in such a contest which shall be judged by an independent
jury with a view to design contracts being awarded to the winners. (CAP code 22)
2. Entities shall prepare a report in writing on each contract awarded under the provisions of
paragraph 1. Each report shall contain the name of the procuring entity, value and kind of goods
or services procured, country of origin, and a statement of the conditions in this Article, which
prevailed. This report shall remain with the entities concerned at the disposal of the government
authorities responsible for the entity in order that it may be used if required under the procedures
of Articles XVIII, XIX, XX and XXII.
"Notes:
5.It is the understanding that "existing equipment" includes software to the extent that the
initial procurement of the software was covered by the Agreement.
6.Original development of a first product or service may include limited production or

supply in order to incorporate the results of field testing and to demonstrate that the
product or service is suitable for production or supply in quantity to acceptable quality
standards. It does not extend to quantity production or supply to establish commercial
viability or to recover research and development costs."
3. The limited tendering reasons for the Canada-European Union Comprehensive Economic and Trade
Agreement (CETA) are included below. Note that limited tendering remains subject to trade agreements,
where other provisions not listed below must still be applied.
1. Provided that it does not use this provision for the purpose of avoiding competition among
suppliers or in a manner that discriminates against suppliers of the other Party or protects
domestic suppliers, a procuring entity may use limited tendering and may choose not to apply
Articles 19.6 through 19.8, paragraphs 7 through 11 of Article 19.9, and Articles 19.10, 19.11,
19.13 and 19.14 under any of the following circumstances:
a. if:
i. no tenders were submitted or no suppliers requested participation;
ii. no tenders that conform to the essential requirements of the tender documentation
were submitted;
iii. no suppliers satisfied the conditions for participation; or
iv. the tenders submitted have been collusive,
provided that the requirements of the tender documentation are not substantially modified;
b. if the goods or services can be supplied only by a particular supplier and no reasonable
alternative or substitute goods or services exist for any of the following reasons:
i. the requirement is for a work of art;
ii. the protection of patents, copyrights or other exclusive rights; or
iii. due to an absence of competition for technical reasons;
c. for additional deliveries by the original supplier of goods or services that were not included
in the initial procurement if a change of supplier for such additional goods or services:
i. cannot be made for economic or technical reasons such as requirements of

interchangeability or interoperability with existing equipment, software, services or
installations procured under the initial procurement; and
ii. would cause significant inconvenience or substantial duplication of costs for the
procuring entity;
d. only when strictly necessary if, for reasons of extreme urgency brought about by events
unforeseeable by the procuring entity, the goods or services could not be obtained in time
using open tendering or selective tendering;
e. for goods purchased on a commodity market;
f. if a procuring entity procures a prototype or a first good or service that is developed at its
request in the course of, and for, a particular contract for research, experiment, study or
original development. Original development of a first good or service may include limited
production or supply in order to incorporate the results of field testing and to demonstrate
that the good or service is suitable for production or supply in quantity to acceptable quality
standards, but does not include quantity production or supply to establish commercial
viability or to recover research and development costs;
g. for purchases made under exceptionally advantageous conditions that only arise in the very
short term in the case of unusual disposals such as those arising from liquidation,
receivership or bankruptcy, but not for routine purchases from regular suppliers; or
h. if a contract is awarded to a winner of a design contest provided that:
i. the contest has been organized in a manner that is consistent with the principles of
this Chapter, in particular relating to the publication of a notice of intended
procurement; and
ii. the participants are judged by an independent jury with a view to a design contract
being awarded to a winner.
2. A procuring entity shall prepare a report in writing on each contract awarded under paragraph 1.
The report shall include the name of the procuring entity, the value and kind of goods or services
procured and a statement indicating the circumstances and conditions described in paragraph 1
that justified the use of limited tendering.
4. A. The limited tendering reasons for the Canadian Free Trade Agreement (CFTA), as stated in
paragraphs 1 through 3 of Article 513 are included below.
1. Subject to paragraphs 2 and 3, and provided that it does not use this provision for the
purpose of avoiding competition among suppliers or in a manner that discriminates against
suppliers of any other Party or protects its own suppliers, a procuring entity may use limited
tendering in the following circumstances:
a. if:
i. no tenders were submitted or no suppliers requested participation;
ii. no tenders that conform to the essential requirements of the tender

documentation were submitted;
iii. no suppliers satisfied the conditions of participation; or
iv. the submitted tenders were collusive, provided that the requirements of the
tender documentation are not substantially modified;
b. if the goods or services can be supplied only by a particular supplier and no

reasonable alternative or substitute goods or services exist for any of the following
reasons:
i. the requirement is for a work of art;
ii. the protection of patents, copyrights, or other exclusive rights;
iii. due to an absence of competition for technical reasons;
iv. the supply of goods or services is controlled by a supplier that is a statutory

monopoly;
v. to ensure compatibility with existing goods, or to maintain specialized goods

that must be maintained by the manufacturer of those goods or its
representative;
vi. work is to be performed on property by a contractor according to provisions of

a warranty or guarantee held in respect of the property or the original work;
vii. work is to be performed on a leased building or related property, or portions

thereof, that may be performed only by the lessor; or
viii. the procurement is for subscriptions to newspapers, magazines, or other

periodicals;
c. for additional deliveries by the original supplier of goods or services that were not
included in the initial procurement, if a change of supplier for such additional goods
or services:
i. cannot be made for economic or technical reasons such as requirements of

interchangeability or interoperability with existing equipment, software,
services, or installations procured under the initial procurement; and
ii. would cause significant inconvenience or substantial duplication of costs for

the procuring entity;
d. if strictly necessary, and for reasons of urgency brought about by events

unforeseeable by the procuring entity, the goods or services could not be obtained in
time using open tendering;
e. for goods purchased on a commodity market;
f. if a procuring entity procures a prototype or a first good or service that is developed

in the course of, and for, a particular contract for research, experiment, study, or
original development. Original development of a first good or service may include
limited production or supply in order to incorporate the results of field testing and to
demonstrate that the good or service is suitable for production or supply in quantity
to acceptable quality standards, but does not include quantity production or supply to
establish commercial viability or to recover research and development costs;
g. for purchases made under exceptionally advantageous conditions that only arise in
the very short term in the case of unusual disposals such as those arising from
liquidation, receivership, or bankruptcy, but not for routine purchases from regular
suppliers;
h. if a contract is awarded to a winner of a design contest provided that:
i. the contest has been organized in a manner that is consistent with the principles
of this Chapter, in particular relating to the publication of a tender notice; and
ii. the participants are judged by an independent jury with a view to a design
contract being awarded to a winner; or
i. if goods or consulting services regarding matters of a confidential or privileged

nature are to be purchased and the disclosure of those matters through an open
tendering process could reasonably be expected to compromise government
confidentiality, result in the waiver of privilege, cause economic disruption, or
otherwise be contrary to the public interest.
2. A procuring entity may, in its use of limited tendering under paragraphs 1(a) through 1(i),
choose not to apply Articles 504.5 through 504.10, Article 506, Article 507, Article 508.5,
Article 508.6, Article 509.7, Article 509.8, Articles 510 through 512, Article 514 and
Article 515.
3. A procuring entity may, in its use of limited tendering under paragraph 1(i), also choose not
to apply Article 516.
B. The limited tendering reasons for the Agreement on Internal Trade (AIT), as stated in paragraphs
11 and 12 of article 506 are included below.
"11. An entity of a Party may use procurement procedures that are different from those described
in paragraphs 1 hrough 10 in the following circumstances, provided that it does not do so for the
purpose of avoiding competition between suppliers or in order to discriminate against suppliers of
any other Party:
a. where an unforeseeable situation of urgency exists and the goods, services or construction
cannot be obtained in time by means of open procurement procedures; (CAP code 81)
b. where goods or consulting services regarding matters of a confidential or privileged nature

are to be purchased and the disclosure of those matters through an open tendering process
could reasonably be expected to compromise government confidentiality, cause economic
disruption or otherwise be contrary to the public interest;
c. where a contract is to be awarded under a cooperation agreement that is financed, in whole

or in part, by an international cooperation organization, only to the extent that the
agreement between the Party and the organization includes rules for awarding contracts that
differ from the obligations set out in this Chapter;
d. where construction materials are to be purchased and it can be demonstrated that

transportation costs and technical considerations impose geographic limits on the available
supply base, specifically in the case of sand, stone, gravel, asphalt, compound and pre-
mixed concrete for use in the construction or repair of roads;
e. where compliance with the open tendering provisions set out in this Chapter would interfere
with a Party's ability to maintain security or order or to protect human, animal or plant life
or health; and
f. in the absence of a receipt of any bids in response to a call for tenders made in accordance
with the procedures set out in this Chapter. (CAP Code 05)"
12. Where only one supplier is able to meet the requirements of a procurement, an entity may use
procurement procedures that are different from those described in paragraphs 1 through 10 in the
following circumstances:
a. to ensure compatibility with existing products, to recognize exclusive rights, such as

exclusive licences, copyright and patent rights, or to maintain specialized products that
must be maintained by the manufacturer or its representative;
b. where there is an absence of competition for technical reasons and the goods or services can
be supplied only by a particular supplier and no alternative or substitute exists; (CAP code
71)
c. or the procurement of goods or services the supply of which is controlled by a supplier that
is a statutory monopoly; (CAP code 86)
d. the purchase of goods on a commodity market; (CAP code 20)
e. or work to be performed on or about a leased building or portions thereof that may be

performed only for work to be performed on property by a contractor according to
provisions of a warranty or guarantee held in respect of the property or the original work;
f. for work to be performed on property by a contractor according to provisions of a warranty

or guarantee held in respect of the property or the original work;
g. for a contract to be awarded to the winner of a design contest;
h. for the procurement of a prototype or a first good or service to be developed in the course of
and for a particular contract for research, experiment, study or original development, but
not for any subsequent purchases; (CAP code 72)
i. for the purchase of goods under exceptionally advantageous circumstances such as

bankruptcy or receivership, but not for routine purchases; (CAP code 21)
j. for the procurement of original works of art;
k. for the procurement of subscriptions to newspapers, magazines or other periodicals (CAP

code 87); and
l. for the procurement of real property. (CAP code 87)
Annex 3.3: Model Content of an Advance Contract Award Notice

(2017-09-21)
An Advanced Contract Award Notice (ACAN) must be prepared in both official languages. Below is a model
that must be used by contracting officers for the preparation of an ACAN. The blocks include guidance for its
use as well as examples for some of the items listed.
1. Advance Contract Award Notice (ACAN)

Begin with an explanation of what an ACAN is by including the
statement below in all ACANs.
An ACAN is a public notice indicating to the supplier community that a department or agency intends
to award a contract for goods, services or construction to a pre-identified supplier, thereby allowing
other suppliers to signal their interest in bidding, by submitting a statement of capabilities. If no supplier
submits a statement of capabilities that meets the requirements set out in the ACAN, on or before the
closing date stated in the ACAN, the contracting officer may then proceed with the award to the pre-
identified supplier.
2. Definition of the requirement

Provide a description of the requirement that is sufficiently defined
so that industry can understand the government's high-level
requirements.
The Department of (indicate name of organization) has a requirement for the
supply of quantity x (describe the product, system, or equipment, e.g.
software licenses, VHF communications system, fire fighting
equipment), in accordance with (if applicable) Standard/Specification/Regulation No. x. The
product/system/equipment (as applicable) must (describe the salient physical,
functional or other essential characteristics, including
performance criteria, and any requirement to integrate with
existing systems or equipment. Also refer to a part number,
model number and/or brand name, if applicable, and add the words
"or equivalent". Include all information on any optional items,
quantities, periods, etc.).
OR
The Department of (indicate name of organization) has a requirement to
(describe the services, e.g. "provide architectural and
engineering services"; "provide technical investigation and
engineering services in support of..."; "conduct a study of x to
assess..."; "carry out a financial audit of x to determine...";

"develop an economic model to permit the analysis of..."). The work
will involve the following: (enumerate the tasks and describe the
objectives, expected results, performance standards,
constraints, and, to the extent possible, deliverables).
3. Criteria for assessment of the Statement of Capabilities (Minimum Essential Requirements)

Detail the criteria against which the statement of capabilities
submitted by potential suppliers will be assessed. This will allow
the contracting officer to have an adequate basis for evaluating a
potential supplier's statement of capabilities. The pre-identified
supplier must be evaluated on the same basis.
Any interested supplier must demonstrate by way of a statement of capabilities that its
product/equipment/system (as appropriate) meets the following requirements:
(Summarize the essential functional characteristics or, if
necessary to properly define the goods, the physical or design
characteristics, and describe any requirements for
interchangeability with existing systems or equipment. Also
include to the extent possible performance or output criteria.
If applicable, refer to recognized Canadian or international
standards, specifications, and/or regulations.)
OR
Any interested supplier must demonstrate by way of a statement of capabilities that it meets the
following requirements: (this list should include those qualifications
deemed essential to carry out the work)
Experience (e.g. x years experience in the past x years
conducting y; x number of projects similar in size, scope
and complexity);
Knowledge and understanding of (e.g. x equipment; x economic model;

x software);
Academic qualifications (e.g. must possess an undergraduate degree

from a recognized university in the field of [e.g. business,
political science]);
Professional designation, accreditation, and/or certification (e.g. professional

engineer, Certified General Accountant).
4. Applicability of the trade agreement(s) to the procurement

Include, if applicable, a statement indicating if the proposed
procurement is subject to one or more of the trade agreements.
This procurement is subject to the following trade agreement(s) (insert the applicable
trade agreement(s)):
Canadian Free Trade Agreement (CFTA) OR Agreement on Internal Trade (AIT)
World Trade Organization - Agreement on Government Procurement (WTO-AGP)
North American Free Trade Agreement (NAFTA)
Canada-European Union Comprehensive Economic and Trade Agreement (CETA)
Note: In general, the Supply Manual refers only to NAFTA and the WTO–
AGP, as the procedural requirements of the other international trade
agreements will be fulfilled following compliance to the procedural
requirements of NAFTA and the WTO–AGP. However, all applicable FTAs
need to be consulted and listed in the solicitations. See 1.25.16
Bilateral Free Trade Agreements.
5. Set-aside under the Procurement Strategy for Aboriginal Business

Include, if applicable, the following statement when the procurement
is set-aside under the Procurement Strategy for Aboriginal Business
(PSAB).
This procurement is set-aside for an Aboriginal supplier in accordance with the government
Procurement Strategy for Aboriginal Business (PSAB). Therefore, only suppliers who meet the
definition of an Aboriginal business, as defined in the PSAB, may submit a statement of capabilities.
6. Comprehensive Land Claims Agreement(s)

Include, if applicable, a statement regarding the applicability of
the procurement to one or more of the Comprehensive Land Claims
Agreements (CLCAs).
This procurement is subject to the ______________________ (insert the applicable
CLCA).
7. Justification for the Pre-Identified Supplier

Indicate the reason(s)/justification for the pre-identified supplier.
This should clearly demonstrate why the pre-identified supplier has
been identified as the only supplier capable of performing the work
or of meeting the government's requirements. (See 3.15.1
Justification of Non-competitive Process).
8. Government Contracts Regulations Exception(s)

Indicate all relevant exceptions under the Government Contracts
Regulations (GCRs).
The following exception(s) to the Government Contracts Regulations is (are) invoked for this
procurement under subsection ___________________ (for example: subsection 6(d) -
"only one person is capable of performing the work").
9. Exclusions and/or Limited Tendering Reasons

Indicate, as applicable, the exclusion(s) and/or the limited
tendering reason(s) invoked (see Annex 3.2 Limited Tendering Reasons
contained in the Trade Agreements) under the trade agreement(s).
The following exclusion(s) and/or limited tendering reasons are invoked under the (section of
the trade agreement(s) specified):
Canadian Free Trade Agreement (CFTA) – Article(s) _____ (insert applicable
article(s)) OR Agreement on Internal Trade (AIT) – Article(s) _____ (insert
applicable article(s))
World Trade Organization - Agreement on Government Procurement (WTO-AGP) – Article(s)

_____ (insert applicable article(s))
North American Free Trade Agreement (NAFTA) – Article(s) _____ (insert applicable
article(s))
Canada-European Union Comprehensive Economic and Trade Agreement (CETA) – Article(s)

_____ (insert applicable article(s))
Note 1: Trade agreements make no reference to ACANs, but if the trade

agreement covered procurement is being directed to a supplier, there
is a requirement to indicate the exclusion(s) or the limited
tendering reason(s) invoked.
Note 2: In general, the Supply Manual refers only to NAFTA and the
WTO–AGP, as the procedural requirements of the other international
trade agreements will be fulfilled following compliance to the
procedural requirements of NAFTA and the WTO–AGP. See 1.25.16
Bilateral Free Trade Agreements.
10. Ownership of Intellectual Property

Where intellectual property will be created during the course of the
contract, a statement should indicate whether an exception set out in
the Treasury Board ARCHIVED - Policy on Title to Intellectual
Property Arising under Crown Procurement Contracts (http://www.tbs-

sct.gc.ca/pol/doc-eng.aspx?id=13697&section=text) is being invoked or if the
ownership of intellectual property will rest with the contractor.
Ownership of any Foreground Intellectual Property arising out of the proposed contract will vest
in the Contractor.
OR
Canada intends to retain ownership of any Foreground Intellectual Property arising out of the
proposed contract on the basis that the main purpose of the contract is (insert
appropriate exception to the Treasury Board ARCHIVED - Policy on
Title to Intellectual Property Arising under Crown Procurement
Contracts (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=13697&section=text) ,
e.g. to generate knowledge and information for public
dissemination).
11. Period of the proposed contract or delivery date

Provide the period of the proposed contract or the required delivery,
including potential renewal or option years.
The product/system/equipment (as appropriate) must be delivered on _________ (insert
the delivery date required or requested. If the contract
includes optional quantities and/or optional goods, insert the
delivery date (e.g. within x days of exercising the option)).
OR
The proposed contract is for a period of x years, from (insert estimated start
date) to (insert estimated completion date). (If the contract
includes an option to extend the contract period, insert the
option information, e.g. two one-year periods.)
OR
If the contract includes deliverables, state the date(s) that
the deliverables are due.
12. Cost estimate of the proposed contract

Include a cost estimate, where appropriate, provided that it will not
prejudice negotiations with the proposed contractor (pre-identified
supplier), or compromise the pre-identified supplier's competitive
position if the requirement proceeds to a traditional or electronic
bidding process (could be provided as a range).
The estimated value of the contract, including option(s), is $ x (GST/HST extra).
13. Name and address of the pre-identified supplier

Include the name and, usually, the address of the pre-identified
supplier (proposed contractor) in the ACAN.
14. Suppliers' right to submit a statement of capabilities

Provide an explanation to suppliers of how they may proceed in
responding to the ACAN.
Suppliers who consider themselves fully qualified and available to provide the goods, services or
construction services described in the ACAN may submit a statement of capabilities in writing to the
contact person identified in this notice on or before the closing date of this notice. The statement of
capabilities must clearly demonstrate how the supplier meets the advertised requirements.
15. Closing date for a submission of a statement of capabilities

Include the day, month and year for the closing date for accepting
statements of capabilities. See 3.15.5.1 Advance Contract Award
Notice Time Limit.
The closing date and time for accepting statements of capabilities is (e.g. February 11, 2011
at 2:00 p.m. EST).
16. Inquiries and submission of statements of capabilities Include the name, position,
address, phone, fax and e-mail address where suppliers may inquire or
submit a statement of capabilities.
Inquiries and statements of capabilities are to be directed to:
(Name and title of contact)
(Address)
Telephone:
Facsimile:
E-mail:
Annex 3.4: Task Authorization

(2011-01-11)
Annex 3.4.1: A Guide to Preparing and Administering Task Authorization for Public Works
and Government Services Canada Clients
(2011-05-16)
1.0 PURPOSE
The purpose of the Guide to Preparing and Administering Task Authorizations is to provide procedural
guidance to Public Works and Government Services Canada's ( PWGSC's) clients when contracts for services
containing task authorizations are issued by PWGSC and the client is authorized to issue individual task
authorizations (TAs). This guide incorporates advice on preparing and administering TAs. Many of the
principles discussed in this document equally apply to other mechanisms by which goods or services are
ordered under a contract on an "as and when requested" basis such as a service order. For the Department of
National Defence (DND) requirements, this guide supplements the internal procedure for administering TAs
documented in article 3.3.2 of DND's Procurement Administration Manual (PAM).
2.0 DEFINITIONS
2.1 CONTRACTS WITH TASK AUTHORIZATIONS

A contract with Task Authorizations (TAs) is a method of supply for services under which all of the work or a
portion of the work will be performed on an "as and when requested basis" through predetermined conditions
including an administrative process involving task authorizations.
2.2 TASK AUTHORIZATION

A TA is a structured administrative tool enabling PWGSC or a client, or both to authorize work, by a contractor
on an "as and when requested" basis in accordance with the conditions of the contract.
3.0 APPLICATION OF CONTRACTS WITH TASK AUTHORIZATIONS

a. A contract with TAs may be used when there is a definite need for services but the exact nature, the
timeframes of the required services, activities and deliverables will only be known when the service(s)
will be required during the period of the contract. PWGSC determines when the client's needs would be
best addressed by the use of a contract with TAs. If the client is authorized to issue TAs, the limit of this
approval would be stipulated in the contract. All TAs in excess of this limit have to be forwarded to
PWGSC for authorization. A contract with TAs can be set up to cover multiple years. This approach can
eliminate the need to establish a new contract every year. Multiple contracts with task authorizations
may be issued in certain circumstances when one contract would not be sufficient to fulfill all
requirements. In such cases, the contractors' order of ranking, the specific work allocation process,
Canada's total liability for all issue TAs and the authorization limit would be identified in the contracts.
b. Some examples of contracts with TAs are as follows:
i. a requirement for translation where the work is generally defined and the specific tasks for
translation (e.g. a required translation of 50,000 words) are on an as and when requested basis;
ii. a requirement for maintenance of equipment where the general maintenance work is defined in
the contract and, when the equipment failure/issue occurs, the specific maintenance task is
authorized on an as and when requested basis;
iii. a requirement for an informatics technology specialist over a defined period, but the specific
activities and deliverables cannot be identified in advance nor the timing or level of effort
predicted.
c. An advantage of using contracts with TAs is the mitigation of contractual risks as a result of better-
defined tasks, the establishment of a level of effort on a per task basis and more precise pricing for each
specific task thereby ensuring better management of the contract.
d. When they are properly used, contracts with TAs provide a structured framework offering operational
speed and flexibility to clients. Contracts with TAs will be successful provided that there is a clear
understanding and agreement between PWGSC and the client as to their respective roles and
responsibilities relating to the management of the contract including for authorizing and issuing TAs and
task authorization management. The improper use of contracts with TAs can lead to major problems
between the government and its suppliers, between PWGSC and its clients, and for the government in
the eyes of the public.
4.0 CONDITIONS OF USE

a. As a condition of use of contracts with TAs, the PWGSC contracting officer will, as a minimum:
i. ensure the contract with TAs is the appropriate method of supply for these required services in
consultation with the client.
ii. decide whether the client will be allowed to authorize and issue TAs, and determine the financial
limit of this authority. These decisions will be made in consultation with the client and the
associated provisions will be detailed in the contract. All TAs in excess of the determined limit
must be forwarded to PWGSC for authorization and issuance.
iii. consult with the client to reach an agreement on the roles and responsibilities of both
organizations including the client's responsibilities for reporting.
iv. discuss, as required, the use of contracts with TAs with the client and in particular the
administration of TAs.
5.0 TASK AUTHORIZATION PROCESS AND ADMINISTRATION

The client authorized to issue tasks to the contractor is responsible for issuing TAs in accordance with the TA
process and administration of the TA detailed in the contract. If the task does not seem to be within the scope of
the work, PWGSC must be consulted before any TA is contemplated.
The responsibilities of the client are detailed below:
a. TA Statement of Work (SOW) or task description
i. ensure the task (or revised task) description of the work required (activities to be performed,
deliverables to be submitted, completion dates for major activities or submission dates for
deliverables or, as applicable, both) included in the TA is in accordance with the contract
Statement of Work (SoW). This includes:
A. ensuring that the text of the TA does not have the potential to create employer-employee
relationships. See the Canada Revenue Agency publication RC 4110 - Employee or Self-
Employed? (http://www.cra-arc.gc.ca/E/pub/tg/rc4110/) ; and
B. Setting dates or timeframes for completing tasks taking into consideration the expiry date of
the contract. A task must be completed on or before the expiry date of the contract;
however, if a task cannot be completed by such date, a contract amendment to extend the
contract period to the task completion date would have to be issued by PWGSC before the
TA can be authorized and issued.
ii. provide to the contractor the task or description of the work, the schedule, the quantity, and the
associated payment provisions, all in accordance with the conditions of the contract.
iii. facilitate knowledge transfer at the end of the work to reduce reliance on the same consultant or
contractor.
iv. consult with the contractor and the contracting officer, as applicable.
b. Task Authorization Stage
i. the response from the contractor must be reviewed by the client to ensure conformity with the
conditions and payment provisions stipulated in the contract and its amendments, e.g.
predetermined categories of resources and rates or pricing stipulated in the contract and its
amendments are used by the contractor to quote on the level of effort for the specific task.
ii. if resources are named in the contract (i.e. specific individuals are identified for specific contract
categories), replacement must be in accordance with the conditions of the contract or subsequent
amendments and meet the criteria used in the selection of the individual. However, for contracts
that do not contain named resources, then the client should complete and retain on file an
evaluation of such new named resource. The evaluation must completely assess such resource
ensuring he/she meets all qualifications as stipulated in the contract or its amendments.
iii. before authorizing a task, the client must ensure that:
A. the task is within the client's authority limit; if the value of the task exceeds the client
authorization limit contained in the contract and contract amendments, the TA must be
forwarded to PWGSC for authorization.
B. the task can be completed on or before the expiry date of the contract, and,
C. the authorization of the task will not result in the cumulative value of all task authorizations
to exceed the limitation of expenditure for all TA s.
iv. the TA is finalized, including the total value of the TA task, in accordance with the conditions of
the contract, and the client and/or PWGSC authorizes the TA by signing and dating the TA.
v. the contractor signs and dates the TA authorized by the client and/or PWGSC and provides the
signed original with their attachments and a copy as detailed in the contract.
c. Start of the work for a TA

Work on a TA cannot commence until a contract allowing task authorizations has been awarded and the
TA has been authorized and issued in accordance with the conditions of the contract. Contracts must
never be awarded and TA s must never be authorized retroactively. The TA form must be authorized by
the client and/or, if required, by PWGSC and signed by the contractor before the work starts.
d. Task Authorization Management
i. before the contract is issued or the TA process implemented, the client must inform PWGSC
when personnel other than the project or technical authority are involved in the TA process. The
client must also confirm that appropriate training on the use of TA s has been provided to such
personnel.
ii. the client must notify the PWGSC contracting authority when the client authority named in the
contract is to be replaced so that the contract can be amended.
iii. the client must create and update a record of all tasks authorized under a contract and provide
such a record to PWGSC as agreed between the two organizations.
iv. the client must monitor task performance, work delivered, conduct proper cost review and provide
reports to the PWGSC contracting authority as agreed between both organizations.
v. The client must have specific processes in place to ensure that billing rates and categories of
resources or other payment provisions included in authorized and issued TA s are in accordance
with the conditions of the contract.
vi. the client must provide complete and timely reporting of performance or arising issues under a TA
to the PWGSC contracting authority.
vii. the client must ensure that the dollar value does not exceed the individual TA financial/dollar
limit(s) specified in the contract with task authorizations or any limit placed on the cumulative
value of TA s under the contract.
viii. before authorizing payment of an invoice in accordance with departmental procedures for an
authorized and issued TA, the client must ensure that:
A. the timesheets are in accordance with the contract, where applicable;
B. the services have been performed, received and accepted; if applicable, an individual who
has direct knowledge of the level of effort reported must verify the level of effort reported
on the timesheet for the contractor resource;
C. the invoice is consistent with the conditions and payment provisions stipulated in the
contract or subsequent amendments and all required substantiating documentation is
completed, approved and on file. See paragraph 7 below relative to separation of duties.
6.0 REVISING A TASK AUTHORIZATION AUTHORIZED BY THE CLIENT

a. The client may revise a TA that it originally authorized subject to the work being within the scope and
value of the contract as well as within the client authority limit set in the contract. Any revision to the
TA is subject to concurrence by the contractor. A TA revision, which will bring the TA value above the
client TA limit, must be referred to the PWGSC contracting officer.
b. (b) An authorized TA may be revised to either reduce an activity (or activities) or to cancel the task in
its entirety, however a TA cannot be revised to terminate a task. In situations when the contractor is in
default or for the convenience of Canada, the termination provisions of the applicable general conditions
will apply and the contract may be terminated either entirely or in part for default or for convenience.
Such matters must be referred to the PWGSC Contracting Authority.
7.0 SEPARATION OF DUTIES

The Treasury Board (TB) Directive on Delegation of Financial Authorities for Disbursements requires that the
authority to enter into contract or amendment must be separate from the certification authority under section 34
of the Financial Administration Act. In Chapter 3 of the 2008 December Report of the Auditor General of
Canada (http://www.oag-bvg.gc.ca/internet/English/parl_oag_200812_03_e_31827.html) , the Office of the Auditor General
raised issues relative to the application of separation of duties with respect to task authorizations and stated that
combining procurement and certification functions under the responsibility of one individual was not in keeping
with the TB Policy on Delegation of Authorities. Therefore, PWGSC recommends that the client ensure that the
individual who signs the task authorization not also certify associated invoices. However, as specified in the
above-mentioned TB directive, where the client's current processes in place or other circumstances do not allow
such separation of duties, the client may implement alternate control measures. The client is responsible to
ensure that its current processes or alternate control measures can withstand scrutiny under audit.
8.0 CORRECTIVE MEASURES

The PWGSC Contracting Authority may take corrective measures such as reducing or revoking the client's
authority to issue TAs where there are indications that the TA process is not working in accordance with the
contract and the agreement between the client and PWGSC.
9.0 TIPS
9.1 METHOD OF SUPPLY PLANNING

a. Do not request that PWGSC establish more labour categories and contracts than are necessary.
b. Do not add new contract categories to engage specific individuals.
9.2 EMPLOYER-EMPLOYEE RELATIONSHIPS

a. Avoid using employment-type language in describing the work such as specifying the number of hours
of work per day/week or the manner in which the work is to be conducted.
b. Avoid long-term assignments or a continuing relationship where a steady income stream from the
department or agency is involved; state clearly the start and completion dates and ensure the contractor
sets his or her hours of work.
c. Avoid controlling how the contractor carries out the work; work and results should only be overseen by
the project/technical authority.
d. Avoid having the contractor work on government premises.
9.3 ADMINISTRATION OF TASK AUTHORIZATIONS

a. Do not split a requirement to get around the client authority limit stipulated in the contract.
b. Avoid task descriptions for TAs that could create a conflict of interest.
c. Ensure the price is fair and reasonable for the specific task and in accordance with the basis of payment
in the contract.
d. Ensure there are sufficient funds.
Annex 3.4.2: Record of Agreement Template – for Public Works and Government
Services Canada Clients
(2015-02-25)
Remarks to the PWGSC Contracting Authority:

(Delete the instructions before forwarding to the client the completed e-mail and Record of Agreement).
1. A Record of Agreement should be used when it has been determined that the needs of the client would
be best met through a contract with a Task Authorization (TA) process subject to any sector/regional
operating procedures regarding its use. To that effect, the following is a TA Record of Agreement
template that would formalize the administrative procedures between the client and Public Works and
Government Services Canada.
2. The completed template may be sent as an email to the appropriate client and client acceptance should
be received before submission of the Contract Plan and Approval (CPAA) or Procurement Plan
approval.
3. An email template is provided below:
Subject:Requisition No. ___________, email TA Record of Agreement
Dear _________(Insert client name)
We considered that your requirement contained under the above subject requisition would best be met through a
contract with a Task Authorization (TA) process. To that effect, the following is the TA Record of Agreement
that would formalize the administrative procedures between our organizations for this requirement. A copy of
the Guide to Preparing and Administering Task Authorizations for PWGSC's clients is attached.
In order to proceed with Public Works and Government Services Canada's (PWGSC) internal approval of this
proposed procurement strategy, we require your department's confirmation that it agrees to the TA Record of
Agreement described below, namely that it understands its roles, responsibilities and reporting requirement with
respect to the proposed TA process as well as PWGSC's right to implement corrective actions if PWGSC
considers that necessary.
Please confirm your understanding of the TA process described herein, by return e-mail, preferably by close of
business ________(insert time and date), as a delay in responding could impact the planned
solicitation release date.
Should you wish to discuss any of the items specified herein, please do not hesitate to contact me.
Yours truly,
______________(Insert name of the PWGSC Contracting Authority)
RECORD OF AGREEMENT BETWEEN
PUBLIC WORKS AND GOVERNMENT SERVICES CANADA
_______________(insert PWGSC Division name) and
__________________(Insert client name; for DND, insert DND'S division name,

e.g.: D MAR P 3-5)
(hereinafter identified as the Authorized Client)
PERTAINING TO THE USE OF TASK AUTHORIZATIONS
UNDER CONTRACT NO ____________(Insert contract number)
1. Purpose
The purpose of this document is to formalize a Record of Agreement between PWGSC and the
Authorized Client regarding their respective roles and responsibilities when using the contract with task
authorizations identified above (refer to the "Matrix of Roles and Responsibilities" attached hereto). It is
imperative that the Authorized Client and the PWGSC contracting authority work closely together at all
times during the period of the contract.
2. Period of the Agreement

The conditions of this Record of Agreement will be in effect for the entire duration of the contract.
3. Task Authorization
As specified in the contract (once awarded), the Authorized Client's designated authority may authorize
individual task authorizations up to a limit of $______(insert amount), Goods and Services Tax
(GST) or Harmonized Sales Tax (HST) extra, inclusive of any revisions to the authorized TAs. Any TA
in excess of that limit or any revisions to the authorized TA that would increase the TA total value above
that limit must be authorized by ________(insert, as applicable,"the Authorized
Client designated authority and the PWGSC Contracting Authority"
or"the PWGSC Contracting Authority") before issuance.
4. Contract Amendment Process

The Authorized Client understands that it must not request the contractor to perform any work in excess
of or outside the scope of the contract and it must not issue TAs where the cumulative value of all TAs
would exceed the contract value. Any anticipated changes to the contract must be authorized, in writing,
by the PWGSC contracting authority through the issuance of a contract amendment before any
additional work or TA is authorized. At any time during the contract period, when there is a need to
amend the contract, the Authorized Client mustinform the PWGSC contracting authority accordingly, in
writing (email), and provide him/her the following:
a. a clear and accurate rationale for amending the contract; e.g. the reason why the work cannot be
completed by the contract expiry date, why there is a shortfall of funds, etc.;
b. the cumulative value of all TAs (GST or HST extra) issued to date;
c. the total contract expenditures (GST or HST extra) to date;
d. the estimated price breakdown for any additional work required;
e. the consequences of not amending;
f. justification for the required amendment versus initiating a new procurement; and
g. the status of the replacement procurement in the case of on-going work.
If PWGSC determines that the contract cannot be amended, the Authorized Client will be advised
accordingly. If the contract can be amended, the Authorized Client will then forward to the PWGSC
contracting authority a duly signed requisition amendment ( PWGSC- TPSGC 9200).
5. Contract Management – Corrective Measures

If there are indications that the Authorized Client is not complying with the conditions of this
agreement, the PWGSC contracting authority will discuss the matter with the Authorized Client's
designated representative, the contractor or both and take any of the following corrective measures,
deemed appropriate:
a. change the detail and/or frequency of the information reporting;
b. discuss with the Authorized Client's staff responsible for issuing TAs, or with the contractor if
needed;
c. reduce any dollar limit that might have been placed on individual TAs and/or suspend or cancel
the Authorized Client's authority limit for TA authorization.
Both parties agree to comply with the conditions of this Record of Agreement. Further, it is understood
and agreed that this agreement may be amended from time to time, as necessary. Except for any change
resulting from a corrective measure specified in 5 (a) to (c) above, amendments will not be implemented
until an amended Record of Agreement has been formalized and accepted via email by both parties.
Matrix of Roles and Responsibilities in Contracts with Task Authorizations
ROLES AND RESPONSIBILITIES

P = primarily responsible
S = supporting role
- = not applicable
Task Authorization (TA) Process
Authorized
No. Activity PWGSC
Client
1.1 Ensure that the personnel authorized to issue TAs are properly trained. P -
1.2 If more than one contract is awarded for the same requirement, ensure P -
that the work is allocated in accordance with the contract.
Ensure that the work required in each TA is within the scope of the P S
1.3
contract.
1.4 Verify that there are still sufficient uncommitted funds in the contract. P -
Ensure that the value of the TA to be authorized does not exceed the P -
Authorized Client's dollar limit imposed on individual TAs. Refer any
1.5
TA exceeding that amount to the PWGSC contracting authority for
authorization.
Ensure that TAs are issued in accordance with the task authorization P -
1.6
process detailed in the contract.
Ensure that the TA delivery/completion date falls on or before the expiry P -
1.7
date of the contract.
Ensure that the cost breakdown or payment provisions and the categories P -
1.8 of personnel provided by the contractor are strictly in accordance with
the conditions of the contract.
Ensure that the level of effort and other elements of cost are P -
1.9
commensurate with the work to be performed.
Reporting Requirements
Authorized
No. Activity PWGSC
Client
Forward a copy of each duly authorized and signed TA (including its P -

2.1 attachments) and all revisions to authorized TAs to the PWGSC
contracting authority, as soon as they are issued.
Provide to the PWGSC Contracting Authority a ________(insert P -
"monthly" or "quarterly", as applicable) usage report,
which will include as a minimum: a list of each issued TA and TA
revision, i.e. TA Number, TA revision number, a title and/or brief
2.2 description of each task, start and completion date for each task, the
active status of each task (completed or in progress), the total value
committed and expended for all TAs to date; the limitation of
expenditure for each task, the limitation of expenditure for all tasks as
stated in the contract, and the contract cumulative expenditure to date.
Contract Management
Authorized
No. Activity PWGSC
Client
Ensure the personnel designated by the Authorized Client to administer P S

3.1
the TA authorization process understand the TA process, as required.
3.2 Report contractor performance problems immediately to the PWGSC P P

contracting authority so that appropriate remedial action may be taken in

relation to the contract. A TA that the Authorized client originally
authorized may be revised subject to the work being within the scope and
value of the contract as well as within the client authority limit set in the
contract. Any revision to the TA is subject to concurrence by the
contractor. A TA revision, which will bring the TA value above the client
TA limit, must be referred to the PWGSC contracting officer. An
authorized TA may be revised to either reduce an activity (or activities)
or to cancel the task in its entirety, however a TA cannot be terminated
for default or for convenience. In situations when the contractor is in
default or for the convenience of Canada, the termination provisions of
the applicable general conditions will apply and the contract may be
terminated either entirely or in part for default or for convenience. Such
matters must be referred to the PWGSC contracting authority.
Ensure that each invoice is in accordance with the conditions of the P -
contract and each authorized and issued TA. Also, ensure that the
individual who signs the task authorization does not certify associated
invoices unless the current processes in place or other circumstances do
3.3
no allow such separations of duties. In such cases, the Authorized client
may implement alternate control measures. Copies of all claims/invoices,
supported by reports are to be provided to the PWGSC contracting
authority.
Monitor the contract closely to ensure that all authorized and issued tasks - P
3.4
remain within the scope of the contract.
Take any necessary corrective measures if there are indications that the - P
TA process is not working as planned (refer to the article entitled
3.5
"Contract Management – Corrective Measures" in this Record of
Agreement).
3.6 Ensure that the contractor complies with the reporting requirements. - P
Compile usage reports and keep up to date usage statistics, ensuring that P P
3.7
the financial limitation of the contract is never exceeded.
Annex 3.5: Procurement Review Committee Requirements and Approval Process

(2014-03-13)
a. The Procurement Review Committee (PRC) Secretariat is part of the Policy, Risk, Integrity and
Strategic Management Sector, and can be reached either by telephone: 819-956-3513 or by e-mail at:
SecretariatduCEA.PRCSecretariat@tpsgc-pwgsc.gc.ca.
b. When a PRC review is required, the Secretariat will, as part of the background document, request that
the contracting officer develop procurement strategies for consideration by the PRC. As a member of
the PRC, the contracting officer plays a major role in these deliberations. The PRC's recommendations
are recorded in a Record of Review that accompanies the contract submission to Treasury Board (TB).
c. Recommendations that involve increased cost or risk must be supported by a cost-benefit analysis using
the factors set out in the TB policy. The department whose program will be supported by the benefits
being sought carries out this analysis.
d. Defence and major Canadian Coast Guard procurements governed by the Defence Procurement Strategy
are exempt from the requirement to seek TB approval before issuing the bid solicitation where weighted
and rated Value Propositions form part of the bid evaluation.
e. The use of relative weightings for evaluating socio-economic benefits should be limited, except in
special circumstances, to procurements exceeding $50,000,000. When relative weightings are utilized
for evaluating socio-economic benefits, TB approval of the procurement strategy is required before
issuing the bid solicitation, regardless of delegated levels. TB approval will be sought by the department
acting as a proponent of the alternate strategies.
f. Where socio-economic or environmental benefits form part of the bid evaluation, the PRC may request
that the contracting officer provide a briefing on the results of the bid evaluation.
g. The contracting officer may be required to provide the PRC with feedback relative to the results of the
Committee's recommendations. However, monitoring the achievement of the benefits being sought is
the responsibility of the department whose program was supported by the socio-economic benefits.
h. All procurements that contain a requirement for local content or regional economical benefits, including
those procurements for which the PRC has imposed local content or regional economic benefits, must
ensure that the Notice of Proposed Procurement/solicitation documents contains details of the
restrictions or practices. When the value of the procurement is $2,000,000 or below and local content or
regional economic benefits have been sought, these procurements must be reported as "exceptional
circumstances". In order to prepare the report, it will be necessary to include the details of the
restrictions in the Contract Award Notice as well.
i. The following process is followed for review and approval of requirements:
i. The Detail Document (see Exhibit A: Detail Document - Procurement Review Committee) is
forwarded to PRC Committee members by e-mail. Committee members are given five working
days to review each individual requirement. At any time within those five days, members can
request that the PRC Secretariat place a requirement on hold, pending further discussions or
clarifications.
ii. Queries on a particular requirement sent to the PRC Secretariat by Committee members will be
forwarded directly to the responsible contracting officer for direct reply.
iii. If no queries or concerns have been received at the end of the fifth day, the PRC Secretariat will
then issue a Record of Decision.
iv. Copies of both the Detail Document and Record of Decision are provided to all PRC members
and the responsible PWGSC contracting officer whose name has been indicated on the Detail
Document.
v. A requirement that has been placed on hold will only be released once direction to do so has been
received by e-mail from the PRC member who has made such a request;
vi. Contracting requirements that are initially under $2,000,000 must be reviewed by the PRC if the
total estimated value increases to $2,000,000 or above.
vii. Amendments to a requirement must be added to the Detail Document by the contracting officer
and returned to the PRC Secretariat for forwarding to PRC members for further review. PRC
members are given three working days to review amendments. At the end of this time period, a
Record of Decision will be issued.
j. When completing the Detail Document, the following should be taken into consideration:
i. socio-economic or environmental benefits, if any, must be clearly indicated in the Detail

Document;
ii. the Project Value should clearly identify whether it is one contract or part of a project involving
several requirements to be sent for individual PRC review and approval, or whether the PRC is
being requested to approve the entire project. If this is the case, then this should be clearly stated
in the detail document.
Exhibit A: Detail Document - Procurement Review Committee

(2010-01-11)
In accordance with the Treasury Board Procurement Review Policy (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?

id=12074) , the following information on a procurement requirement is submitted for your consideration.
If there is no request for additional time to consider the socio-economic potential of this requirement by
the date below you will be notified by e-mail that no further review is required. If you determine that
further review is required, you are requested to provide the reason(s) for your interest and a statement of
the benefits being sought.
(Date to be determined by the Procurement Review Committee Secretariat) / Date à être déterminée par
le Secrétariat du Comité d'examen des acquisitions)
Procurement Review Committee (PRC) - Detail Document

Comité d'examen des acquisitions (CE) - Description détaillée
PRC N o/ N oCEA:(To be determined by the PRC Secretariat / À être déterminé par le Secrétariat du
CEA)
Project Title / Operating Department / Ministère opérationnel :
Project Ref. No / No du projet :
Project Value / Valeur du projet : $______M / ______M$
Estimated Contract Value / Valeur estimative du contrat : $_____M / _____M$
Commodity Description / Description des biens ou services :
Project Status / État du projet :
Procurement Strategy and Other Related Information / Stratégie d'approvisionnement et autres

renseignements pertinents :
Competitive / Concurrentiel ( ) Government Electronic Tendering Service (GETS) ( ) Directed / Source

unique ( ) ACAN/ PAC ( )
Source(s) of supply / Source(s) d'approvisionnement :
Justification for Sole Sourcing ( if applicable) / Justification du recours à un fournisseur unique ( le cas
échéant) :
Procurement Category Code / Code de catégorie d'achat :
Specifications / Spécifications :
Military / Militaires( ) Commercial / Commercial( )
Developmental Procurement ( if applicable) / Achats aux fins de développement ( le cas échéant) :
Estimated Contract Award Date / Date prévue d'attribution du contrat:
Contact Points / Points de contact:
PWGSC Contracting Authority / Autorité contractante de TPSGC:
Telephone / Téléphone:( ) ______

Fax / Télécopieur:( ) _______
E-mail / Courriel:______________
Operating Department Project Authority / Responsable du projet au ministère opérationnel:

________________
Telephone / Téléphone:( ) ______
Fax / Télécopieur:( ) _______
E-mail / Courriel:______________
PRC Secretariat / Secrétariat du CEA

819-956-3513
Annex 3.6: Canadian Content Policy

(2017-04-27)
1. Introduction
The Canadian Content Policy is a Cabinet-mandated policy. The Policy encourages industrial
development in Canada by limiting, in specific circumstances, competition for government procurement
opportunities to suppliers of Canadian goods and services.
2. Application
a. The Policy applies to procurements carried out by Supply and Services Canada (SSC), which is
now a part of Public Works and Government Services Canada (PWGSC). Therefore, this policy
will normally apply to goods and services contracting carried out by Acquisitions Branch, except
for those categories of procurements which were not done by the former SSC. Furthermore, the
Policy does not apply when another government departments does its own contracting and would
not normally apply to construction procurement that had been previously carried out by the
former Public Works Canada.
b. The Policy applies to competitive procurements with an estimated value of $25,000 or more,
except for the following:
i. government procurements subject to the international trade agreements;
ii. procurements made in furtherance of aid to developing countries, but does apply to
purchases made by the Canadian International Development Agency (CIDA) on its own
account;
iii. procurements made by PWGSC Acquisitions offices located outside Canada; and
iv. Cabinet-mandated sourcing, including sourcing related to industrial and regional benefits,
shipbuilding, ship repair, refit and mid-life modernization.
3. Determining Eligible Bidders
a. Eligible bidders are those supplying Canadian goods and/or services.
b. A good wholly manufactured or originating in Canada is considered a Canadian good. A product

containing imported components may also be considered Canadian for the purpose of this policy
when it has undergone sufficient change in Canada, in a manner that satisfies the definition
specified under the North American Free Trade Agreement (NAFTA) Rules of Origin. For the
purposes of this determination, the reference to "territory" in the NAFTA Rules of Origin is to be
replaced with "Canada".
c. A service provided by an individual based in Canada is considered a Canadian service. Where a

requirement consists of only one service, which is being provided by more than one individual,
the service will be considered Canadian if a minimum of 80 percent of the total bid price for the
service is provided by individuals based in Canada.
d. Other Canadian Goods and Services: Textiles are considered to be Canadian goods according to a
modified rule of origin, copies of which are available from the Clothing and Textiles Division,
Commercial and Consumer Products Directorate (CCPD).
4. Preparing a Bid Solicitation
a. When a requirement is covered by the Canadian Content Policy, the bidder must certify the
Canadian content by submitting a certification that the good or service offered meet the definition
of Canadian goods and/or services.
b. When the requirement consists of one good or service, the bidder must certify that the good or
service is Canadian. See section 9, "The Rules of Origin Determination", for examples of how to
determine whether a good is Canadian.
c. When requirements consist of more than one good and/or service, the contracting officer must
decide, at the procurement planning stage, whether the Canadian content certification will be done
on an aggregate or individual basis:
i. aggregate:multi-item requirements will be certified on an aggregate basis. A minimum of

80 percent of the total bid price must consist of Canadian goods to meet the requirements of
the Policy; or
ii. item by Item:multi-item requirements awarded on an item by item basis will be certified on
an item-by-item basis. In these cases, suppliers will be asked to identify separately, each
item that meets the definition of Canadian goods.
d. For requirements consisting of more than one service, a minimum of 80 percent of the total bid
price must be provided by individuals based in Canada.
e. For requirements consisting of a mix of goods and services, 80 percent of the total bid price must
consist of Canadian goods and Canadian services. See section 9, "The Rules of Origin
Determination", for an example of, how to determine whether a mix of goods and services meets
the 80 percent rule.
f. A bid can be accepted in part without resubmission of a certification.
g. The contracting officer must first decide whether a requirement will be solely or conditionally
limited to Canadian goods and or services or whether the procurement will be open to all
suppliers.
h. Solely Limited: the bid solicitation or request for standing offers will be solely limited to
suppliers who could offer Canadian goods and/or services when the contracting officer believes
there exists, in the marketplace, two or more such suppliers. Certifications for competitive
procurement solely limited to Canadian goods and/or services are provided in the Standard
Acquisition Clauses and Conditions(SACC) Manual, under clause numbers: A3051T, A3052T,
A3053T, A3055T, A3056T and A3059T for bid solicitations; and M3051T, M3052T, M3053T,
M3055T, M3056T and M3059T for requests for standing offers. Except for bids that will be
publicly opened, the contracting officer will determine whether:
i. the bidder will be required to submit the completed certification of Canadian content with
the bid, or
ii. the bidder should submit the completed certification with the bid, but it is not mandatory. If
the certification is not completed or submitted with the bid, the contracting officer will
contact the bidder and provide the bidder with a timeframe within which to submit the
completed certification.
Note 1: For publicly opened bids, the bidder will be required to submit the completed certification
with the bid.
Note 2: The contracting officer will normally not require bidders to submit certifications with
their bid unless the requirement is urgently needed by the client.
i. Conditionally Limited: the bid solicitation or request for standing offers will be conditionally
limited when the contracting officer is uncertain whether two or more suppliers of Canadian
goods and/or services exist. Certifications for competitive procurement conditionally limited to
Canadian goods and/or services are provided in the SACC Manual, under clause numbers:
A3061T, A3062T, A3063T, A3065T, A3066T and A3069T for bid solicitations; and M3061T,
M3062T, M3063T, M3065T, M3066T and M3069T for requests for standing offers. The bidder
will be required to submit the Canadian content certification with the bid; or
j. Open: when the contracting officer is of the opinion that two or more suppliers of Canadian goods
and/or services do not exist, the bid solicitation or request for standing offers must be open to all
suppliers. Bidders are not required to provide a certification.
k. Once the sourcing strategy is determined, the contracting officer will prepare a Notice of
Proposed Procurement (NPP). The procurement opportunity will be coded on the Government
Electronic Tendering Service (GETS) as:
i. Solely Limited, Code O-5;
ii. Conditionally Limited, Code O-4; or
iii. Open, Code O-1.
5. Bid Handling
a. The supplier is responsible to demonstrate that its bid meets the definition of Canadian goods
and/or services and must submit a completed certification. When the SACC Manual clauses:
A3052T and A3062T for bid solicitations; and M3052T and M3062T for requests for standing
offers are used, the supplier must clearly identify the status of each individual product.
b. Bids to which the Canadian Content Policy applies will be evaluated as follows:
i. If the procurement process was solely limited to Canadian goods and/or services, and
A. the bidder was required to submit the certification with the bid, only bids with a valid
certification will be evaluated. The bid evaluation process can proceed where there is
at least one bid with a valid certification otherwise the bid solicitation must be
reissued; or
B. the bidder was not required to submit the certification with the bid, the contracting
officer will contact the bidder and provide the bidder with a timeframe within which
to submit the completed certification. If the bidder does not comply by submitting the
completed certification within the prescribed timeframe, the bid will be declared non-
responsive. A bid will only be provided to the client department for evaluation once
the completed certification is received. The bid evaluation process can continue as
long as there is at least one bid with a valid certification otherwise the bid solicitation
must be reissued.
ii. If the procurement process was conditionally limited to Canadian goods and/or services, the
contracting officer will determine, first, if there are two or more bids with a valid Canadian
content certification. In that event, the evaluation will be limited to the bids with the
certification; otherwise, all bids will be evaluated. If the bids with a valid certification are
later declared non-responsive or withdrawn, and, and after such there are less than two
responsive bids with a valid certification of Canadian goods and/or services, the evaluation
will continue among those responsive bids which contain a valid certification. If all bids
with a valid certification are subsequently found to be non-responsive or withdrawn, then
all other bids received will be evaluated. (See SACC Manual clause A3070T.)
c. PWGSC may verify the validity of the certification. If the certification is declared non-responsive,
then the offered goods and/or services are deemed not to meet the definition of Canadian content.
Verification of the certification must in no way alter the price quoted or any substantive element
of the bid.
6. Contract Award
Contracts awarded on the basis of the bid having met the definition of Canadian content under the
Canadian Content Policy will include SACC Manual clause A3060C or M3060C, as applicable.
7. Set-asides and Canadian Content
a. If the value of the procurement is equal to or greater than $25,000, the Canadian Content Policy
will be applied to procurements set-aside for Aboriginal business.
b. In applying the Policy under a set aside procurement, it must be recognized that there are two
levels of certification.
c. The first level of certification will be to qualify the bidder(s) as eligible for set-aside
consideration, i.e. bidders must provide a certification that they are an Aboriginal business.
d. As the second level, contracting officers must then apply the Policy, in the same manner as any
other procurement, in the context of the supplier community which is eligible to respond (i.e. the
Aboriginal business community). Contracting officers must determine, on the basis of their
knowledge of this community, whether there are a sufficient number of eligible firms to carry out
the procurement as: solely limited(e.g. two or more Aboriginal businesses exist which are able to
provide Canadian goods and/or services); conditionally limited(e.g. there may be two or more
Aboriginal suppliers of Canadian goods or services); or open(e.g. there is an insufficient number
of Aboriginal businesses able to provide Canadian goods and/or services; the procurement is open
to all Aboriginal businesses regardless of the origin of the goods and services supplied).
8. Discretionary Audits and Reviews

The authority for discretionary audits results from either the contractual terms, or statute (Defence
Production Act, section 19). If a contracting officer has concerns about the certification of Canadian
content under the Canadian Content Policy, the contracting officer should discuss the use of a
discretionary audit or review with their management and with the Acquisitions Program Policy
Directorate.
9. The Rules of Origin Determination
a. The Canadian Rules of Origin for Goods (Chapter 4 of the North American Free Trade
Agreement) and Canadian Customs Tariff Harmonized System are used to determine if imported
components that go into the production of an item for resale to the government are sufficiently
altered or converted in Canada to be considered "Canadian".
b. The Harmonized Commodity Description and Coding System is a structured classification system
for goods that has been adopted by Canada and most of the world's trading nations, for customs
purposes.
c. For the purposes of this determination, the reference to "territory" in the Rules of Origin must be
replaced with "Canada".
d. Products containing imported components may be considered Canadian when they have
undergone sufficient change in Canada in a manner that satisfies this amended definition. There
are three basic steps to determine if any product that is partially or wholly constructed from
imported components meets the Rules of Origin definition:
i. Locate the heading number in the Harmonized System that best reflects the final product for
sale.
ii. Find the appropriate heading number in the Harmonized System that identifies imported
components used to construct the final product.
iii. Look up the section in the rules of origin that defines whether the conversion that took
place in Canada allows the goods to be defined as Canadian.
Step 1 – Determining Whether a Good is Canadian

a. A bidder proposes hats, which are manufactured in Canada that use imported calves leather.
b. Analysis of Canadian content:
i. Look up "hats" in the index of the Canadian Customs Tariff Harmonized System (HS) and find
the type that matches the kinds of hats to be sold: Hats and other headgear, plaited or made by
assembling strips of any material, whether or not lined or trimmed. The HS number is 6504.00.00.
The first two numbers indicate the good is listed in Chapter 65.
ii. Look up "leather, bovine" in the index: it falls under HS heading 4104.
iii. Finally, refer to the Rules of Origin which lists the conditions for transforming goods listed in the
HS into Canadian goods (Chapter 65 is for Headgear and Parts Thereof and is listed in Section
XII of the rules). The second rule for Chapter 65 applies: A change from 65.03 to 65.07 from any
heading outside that group. As the leather is classified outside 65.03 to 65.07, the final product
(the hats) for sale are considered to be sufficiently transformed and therefore the hats are deemed
to be Canadian for the purposes of this policy.
Step 2 – Determining Whether a Mix of Goods and Services meets the 80

percent Rule of Origin
a. There is a PWGSC solicitation for:
100 wooden office desks;
100 electric space heaters with maintenance and repair included;
100 telephone sets with maintenance and repair included, and
100 metal swivel chairs.
b. A bidder has proposed:

unfinished wooden office desks which are imported into Canada and finished in Canada;
electric space heaters which were constructed using domestic labour/materials and imported
parts. The maintenance/repair of the electric space heaters is being done by Canadian-based
personnel;
telephone sets which were constructed using domestic labour/materials and some imported
parts. The maintenance/repair of the telephones is being done by United States-based
individuals;
metal swivel chairs which were constructed using domestic labour/materials and some imported
parts.
c. Below are the prices for the goods and services offered in the bid:
100 wooden office desks @ $150 each = $15,000
100 electric space heaters @ $200 each = $20,000
Maintenance/Repair = $5,000
100 telephone sets @ $50 each = $5,000
100 metal swivel chairs @ $25 each = $2,500
Total Bid Price= $48,500
d. Analysis of Canadian content:
i. Wooden office desks:
A. Unfinished wooden office desks (HS 9403.30) were imported and finished in Canada. The
final good (finished wooden office desks) falls in same the subheading (HS 9403.30) as the
unfinished good.
B. The NAFTA rules of origin covering HS 9403.30 (wooden office desks) require a change
from another chapter, or a change from parts heading 9403.90, provided there is sufficient
regional value content. These rules are not satisfied.
C. Therefore, the wooden office desks are notconsidered Canadian goods.
ii. Electric space heaters:
A. Electric space heaters (HS 8516.21) were constructed using domestic labour/materials and
imported parts (HS 8516.90).
B. The NAFTA rules of origin covering HS 8516.21 (electric space heaters) allow a change
from subheading 8516.90, provided there is a regional value content of not less than 60
percent where the transaction value method is used or 50 percent where the net cost method
is used.
C. After calculations are done, the regional value content is found to be 65 percent using the
transaction value method.
D. Therefore, the electric space heaters are considered Canadian goods.
iii. Telephone sets:
A. Telephone sets (HS 8517.11) were constructed using domestic labour/materials and some
imported plastic tubes (HS 3917).
B. The NAFTA rules of origin covering HS 8517.11 (telephone sets) require a change to
subheading 8517.11 from any other subheading, except 8517.90.11, 8517.90.12,
8517.90.13, 8517.90.14 or 8517.90.41.
C. Therefore, the telephone sets are considered Canadian goods.
iv. Metal swivel chairs:
A. Metal swivel chairs (HS 9401.30) were constructed using domestic labour/materials and
some imported parts (HS 9401.90).
B. The NAFTA rules of origin covering HS 9401.30 (metal swivel chairs) allow a change from
subheading 9401.90, provided there is a regional value content of not less than 60 percent
where the transaction value method is used or 50 percent where the net cost method is used.
C. After calculations are done, the regional value content is found to be 37 percent using the
transaction value method.
D. Therefore, the metal swivel chairs are notconsidered Canadian goods.
v. Maintenance/repair of telephones:
The maintenance/repair of telephones is being done by U.S.-based individuals. Therefore, this
service is not considered a Canadian service.
vi. Maintenance/repair of electric space heaters:

The maintenance/repair of electric space heaters is being done by Canadian-based individuals.
Therefore, this service is considered a Canadian service.
e. Calculation of Percent of Bid Price Considered Canadian
i. Canadian goods and services

100 electric space heaters = $20,000
100 telephone sets = $5,000
Total Canadian Goods and Services= $30,000
ii. Non-canadian goods and services

100 wooden office desks = $15,000
100 metal swivel chairs = $2,500
Total non-Canadian Goods and Services= $18,500
Total Bid Price= $48,500
iii. Percent of the Bid Price that is composed of Canadian goods and services = $30,000/$48,500 =
62%
f. Conclusion
The supplier has not met the Canadian content requirement that "no less than 80 percent of the bid price
consists of Canadian goods and services".
Annex 3.7: National Security Exception Request Letter – Template

(2017-09-21)
(Clients should use their appropriate departmental letterhead; and delete the instructions provided in the letter.)
Date:
Address:
_________(insert name of Assistant Deputy Minister)

Assistant Deputy Minister
Acquisitions Branch
Place du Portage, Phase III, 11A1 – Room 113
11 Laurier Street
Gatineau, Quebec K1A 0S5
Dear Ms/Mrs/Mr. __________(insert last name of ADM/AB, PWGSC):
Subject: Request for a National Security Exception for the procurement of _____(insert project
title)
I am writing to request that you invoke the National Security Exception contained in all of Canada’s trade
agreements, current and future, including the World Trade Organization Agreement on Government
Procurement (WTO-AGP), Article XXIII(1); the North American Free Trade Agreement (NAFTA), Article
1018(1); the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), Article
19.3(1); the Canada-Chile Free Trade Agreement, Article Kbis-16(1); the Canadian Free Trade Agreement
(CFTA), Article 801; and, the Agreement on Internal Trade (AIT), Article 1804, with respect to the procurement
of_______ (insert procurement description, including additional details of project objective/purpose as needed
to demonstrate the project's necessity to the protection of Canada's National Security interests by virtue of its
connection to Canada's participation in the anti-terrorism campaign and associated operation at home or
abroad).
For the reasons detailed herein, this procurement is necessary for the protection of Canada's national security
interests. I therefore ask that you invoke the national security exception to exempt the above noted procurement
from the application of the trade agreements for all purposes. Please contact ______ (insert project authority's
name, title and telephone number) if you require further information on the nature of the requirements
and/or______ (insert security authority's name, title and telephone number) for further details on the nature of
the threat to national security.
Yours sincerely,
________________________
Signature of appropriate Assistant Deputy Minister
__________(insert client department' name)
Annex 3.8: Comparison of Different methods of Supply

(2015-02-25)
The table below provides a comparison between the different methods of supply used when the precise nature,
timing and/or quantity of the need cannot be set out in advance.
Comparison Table
Methods of Supply
Contract with Task Authorization Standing Offer
Supply Arrangement
A contract with Task Authorizations (TAs) The standing offer This method of
is a method of supply for services under method of supply is supply is used
which all of the work or a portion of the used when it is to establish a
work will be performed on an "as and possible to clearly pool of
when requested" basis through define the requirement suppliers when
predetermined conditions including an but expected quantities there is a
administrative process involving task (level of effort) and recurring need
authorizations. Contracts with TAs are used timing are not known. for a certain
in service contracting situations when there It is used when the type of good
is a defined need by a client to rapidly have client/ PWGSC is or service, but
access to one or more category of unwilling or unable to a standing
service(s) that are expected to be needed on offer a minimum work offer is not
a repetitive basis during the period of the guarantee, or wants to suitable due to
contract. Under contracts with TAs, the maintain multiple the inability to
work to be carried out can be defined but sources of supply. It is fully define the
Determining the exact nature and timeframes of the used to satisfy the requirement in
the Method to required services, activities and requirements of advance, and
Use deliverables will only be known as and departments and there is a
when the service(s) will be required during agencies for desire to
the period of the contract. The contract commonly ordered, compete the
with TAs must stipulate the conditions for commercially requirement.
issuing TAs. A TA is a structured available goods, The supply
administrative tool enabling PWGSC or a services or both, by arrangement
client to authorize work by a contractor on arranging with (SA)
an "as and when requested" basis in suppliers to submit establishes a
accordance with the conditions of the standing offers to framework
contract. TAs are not individual contracts. provide goods, that permits
services or both, expeditious
during a specified processing of
period. A call-up individual bid
against a standing solicitations
offer is a contract. which result in
contracts.
Solicitation A bid solicitation is used to select one or A Request for A Request for
Process and more bidder(s) to establish contracts that Standing Offer Supply
Evaluation will allow services to be carried out on an (RFSO) is used to Arrangement
Criteria "as and when requested basis" through select offeror(s), who (RFSA) is
predetermined conditions and an meet the stated used to
administrative process involving task evaluation criteria in establish a

authorizations. Multiple contracts with task the solicitation, to suitable pool
authorizations may be issued in certain provide PWGSC with of suppliers
circumstances when one contract would one or more standing (source list)
not be sufficient to fulfill all requirements. offers for the provision who meet the
The quantity and level of services specified of goods or services or stated
in the bid solicitation are only an both at predetermined evaluation
approximation of the requirements, but the pricing under set criteria
contract will include a minimum work conditions. The stipulated in
guarantee or some other form of quantity of goods or the solicitation
consideration. the level of effort for and to
services and if establish
applicable, the supply
estimated expenditure arrangements.
specified in the RFSO An SA is an
is only an arrangement
approximation of the between
requirements Canada and
pre-qualified
suppliers that
allows
identified
users to solicit
bids from a
pool of pre-
qualified
suppliers for
specific
requirements
within the
scope of a SA.
The contract creates a contractual There is no contractual There is no
obligation and enough funding must be obligation on the part contractual
committed at the outset to cover the total of Canada until a call- obligation
estimated cost of the contract since the up is made. Each call- between
contract requires consideration. The up is a separate Canada and
contract obligation is limited only by a contract and funds are the supplier to
Contractual minimum guarantee clause or by other committed at that time. buy goods or
Obligation considerations in the contract. The standing offer is services at the
not a contract. The SA stage.
offeror is bound by its There is a
offer unless its offer is contractual
withdrawn. obligation with
the award of
each contract.
Binding Legal The signed contract is the binding legal The call-up is the Each contract
Agreement agreement established between the acceptance of the offer awarded will
contracting department or agency and the and is a binding be considered
Supplier. The task authorization is not an contract established to be a
individual contract but an administrative between the separate
process that enables specific tasks to be contracting department binding

carried out in accordance with the and the offeror. contract
conditions of the contract. established
between the
contracting
department
and the
supplier.
The work is authorized on an "as and when The work is authorized When
requested" basis when a TA is authorized on an "if and when individual
by the client or by PWGSC. requested" basis when needs are
a call-up is issued. identified,
individual bid
solicitations
are issued
Work based on the
Authorization conditions of
the SA and the
work is
authorized
through the
award of
individual SA
contracts.
The limit for the client for authorizing a TA The Standing Offer The Supply
is set in the contract. When the client Authority will set the Arrangement
requires specific services described call-up limit in the Authority will
generally in the contract, a TA is issued to standing offer set the
authorize the performance of the work by a document for the contracting
contractor as long as it is within the scope identified user(s) not limits in the
of work of the contract and within the TA to exceed the Treasury SAs for the
limit of the client; PWGSC can issue TAs Board (TB) Contracts client or
Financial
that are over the client limit. Directive, Appendix identified
Limits
C. See 4.10.20.1.a. for user(s), not to
more details. exceed TB
Contracts
Directive,
Appendix C.
See 4.10.25.1.
c. for more
details.
When all the work under the contract will Not applicable Not applicable
Minimum be authorized using TAs, the client must
Guarantee or commit to a minimum supply, and the
other contract must include a limit on the
Consideration contractor's expectations; e.g., a "minimum
guarantee".
Payment The payment provisions are firm: The payment The pricing
Provisions basis of payment; provisions are firm: method(s) is
method of payment; basis of payment; (are) usually a

all inclusive firm rates, etc. method of ceiling
payment; price/rate, or
all inclusive firm sometimes no
rates, etc. rates are
provided until
individual
requirements
are competed.
If the SA
includes
ceiling prices
or rates,
suppliers will
be allowed to
lower their
prices or rates
based on the
actual
requirement or
statement of
work
described in
the bid
solicitation.
Monitoring and reporting by the client of Monitoring and Monitoring
contractor performance, and of client usage reporting by the client and reporting
of task authorizations, is a condition of the of performance, and of by the client of
client's use of the contract. client usage by the contractor
client or offeror, in performance,
accordance with the and of client
Monitoring
standing offer are a usage, in
and
requirement of use by accordance
Reporting
the client of the with the SA
standing offer. are a
requirement of
use by the
client of the
SA.
4 Chapter 4 - Solicitation Process

(2012-01-18)
4.1 Solicitation process - Introduction

(2015-09-24)
This chapter provides information on pre-solicitation requests, various methods of solicitation and various
sourcing tools. It also contains information on how to prepare and issue a solicitation. Finally, contracting
officers will find information on closing procedures, bid receiving, modification and withdrawal of
bids/offers/arrangements. Contracting officers are reminded that Canada seeks competitive solicitations
whenever possible.
4.5 Pre-Solicitation Requests

(2010-01-11)
Before a formal solicitation is issued, solicitations for information such as Price and Availability (P&A)
enquiries and Requests for Information or Letters of Interest may be issued.
4.5.1 Price and Availability Enquiry

(2010-01-11)
A Price and Availability (P&A) enquiry is a request sent to suppliers for information concerning approximate
prices and availability of specific goods or services. It is used when such information is needed by Public Works
and Government Services Canada ( PWGSC) or by a client department for program planning or budgetary
purposes. A P&A enquiry could be made directly to selected suppliers, or it may be publicly posted on
Government Electronic Tendering Service (GETS). P&A enquiries must clearly indicate that the request is not a
solicitation and that there are no commitments with respect to future purchases or contracts.
4.5.5 Request for Information or Letter of Interest

(2010-01-11)
a. A Request for Information (RFI) or Letter of Interest (LOI) is used when detailed information and
feedback are required from suppliers. Such requests might outline a potential requirement and request
suppliers to describe their ability to satisfy the requirement and to provide ideas and suggestions on how
the eventual solicitation might be structured. Responses are used to assist the client department and
PWGSC in finalizing their plans for the requirement and in developing achievable objectives and
deliverables. RFIs/ LOIs would normally be posted on GETS in order to obtain replies from a wide
audience. If a source list is to be used, the RFI or LOI may be sent only to those on the list. RFIs/ LOIs
must clearly indicate that they are not solicitations and that there are no commitments with respect to
future purchases or contracts.
b. RFIs/ LOIs identify the client department's potential requirement and its business objectives.
c. The main objectives of an RFI/ LOI are to:
i. allow suppliers time to:
A. assess and comment on the adequacy and clarity of the requirements as currently expressed;
B. offer suggestions regarding potential alternative solutions that would meet requirements,
such as solution with a lower environmental impact;
C. comment on the procurement strategy, preliminary basis of payment elements, and

timelines for the project, and
D. comment on the draft solicitation when included with the RFI/ LOI.
ii. provide information to assist the client department to:
A. determine whether to proceed with requirements/strategy as planned, and if so, further

developing internal planning, approval and solicitation documents that may potentially lead
to a solicitation;
B. refine the procurement strategy, project structure, cost estimate, timelines, requirements
definition, and other aspects of the requirement;
C. become a more "informed buyer" with an enhanced understanding of industry goods and
service offerings in the areas of interest; and
D. assess potential alternative solution concepts that would meet its requirement, such as
environmentally preferable solutions.
4.10 Solicitation Methods

(2010-01-11)
Various methods of solicitation may be used depending upon the circumstances of the particular procurement.
4.10.1 Request for Quotation

(2016-04-04)
a. A Request for Quotation (RFQ) may be used to solicit bids for commercial goods and/or services valued
below $25,000 (low dollar value), including all applicable taxes, from one or more suppliers.
b. Prior to soliciting a bid using an RFQ, contracting officers are to verify the Ineligibility and Suspension
List (http://www.tpsgc-pwgsc.gc.ca/ci-if/four-inel-eng.html) and ascertain that the bidder is not ineligible.
c. Because of its abbreviated nature, a RFQ may not contain all of the terms and conditions that are
typically used to form a contract, but must include the Integrity Provisions – Bid found in Standard
Instructions 2003 or 2004.
d. The contract requirement must be well defined such that bids may be evaluated and compared on the
basis of price and delivery and where contract award may be determined on the basis of lowest-priced
bid that meets the requirements.
e. RFQs are not publicly posted. Contracting officers may have suppliers submit their RFQs directly to
them if a specific date and time is set for the receipt of the quotation.
f. See section 5.16 Integrity Compliance for details on the process to be followed before contract award or
before issuing a purchase order.
4.10.5 Telephone Buy

(2016-04-04)
a. A telephone buy (T-buy) is a form of Request for Quotation (RFQ), where bids are solicited from one or
more selected suppliers verbally, in-person or over the telephone, for requirements below $25,000,
including all applicable taxes.
b. Prior to soliciting a telephone bid, the contracting officer must verify the Ineligibility and Suspension
List (http://www.tpsgc-pwgsc.gc.ca/ci-if/four-inel-eng.html) and ascertain that the bidder is not ineligible.
c. When soliciting bids through telephone buy, the contracting officer must ensure that the bidder is
informed that they will be subject to the Ineligibility and Suspension Policy (http://www.tpsgc-pwgsc.gc.ca/ci-
if/politique-policy-eng.html) , and that they must be compliant to the Policy to be awarded a contract. The
contracting officer must request that the bidder familiarises themselves with the Policy.
d. A verbal contract may be entered into by telephone (and order may be placed) if the contracting officer
has the appropriate authority.
e. Written confirmation from the bidder is not required for bids received by telephone, however the
contracting officer must record the details of the telephone bid on the procurement file and the order
must be confirmed in writing by issuing the applicable contract document and providing a copy to the
contractor.
f. See Chapter 7 Award of Contracts and Issuance of Standing Offers and Supply Arrangements and
section 5.16 Integrity Compliance for details on the process to be followed before contract award or
before issuing a purchase order.
4.10.10 Invitation to Tender

(2016-04-04)
a. An Invitation to Tender (ITT) is used where selection is based on the lowest price. It should be used
when all of the following criteria apply:
i. two or more sources are considered capable of carrying out the requirement;
ii. the requirement is adequately defined to permit the evaluation of bids against clearly stated
criteria;
iii. the market conditions are such that bids can be submitted on a common pricing basis;
iv. it is intended to accept the lowest-priced responsive bid without negotiations; and
v. the evaluation of bids will exclude any Product, Resource, Operating and Contingency (PROC)
costs or socio-economic considerations, other than the employment equity provisions.
b. An ITT can be used to solicit bids:
i. through public advertisement on the Government Electronic Tendering Service (GETS);
ii. through direct invitation of selected suppliers by means of a source list, where permitted; or
iii. by invitation of one source only if conditions for a non-competitive process have been met.
c. Prior to issuing an ITT, contracting officers are to verify the Ineligibility and Suspension List
(http://www.tpsgc-pwgsc.gc.ca/ci-if/four-inel-eng.html) and ensure that the invited suppliers are not ineligible, if
they have not been selected from a prequalified list.
d. An ITT must include the Integrity Provisions – Bid found in Standard Instructions 2003 or 2004.
e. An ITT can be opened publicly. Public opening should be considered for all ITTs estimated to
exceed $25,000. ITTs for requirements less than $25,000 may be opened publicly if circumstances
warrant. Public openings should be considered for any bid where the contract award will have a high
degree of public visibility.
f. See section 5.16 Integrity Compliance for details on the process to be followed before contract award.
4.10.15 Bid Solicitation

(2017-09-21)
a. A bid solicitation may be used for low dollar value (Simple), medium complexity (MC) and higher
complexity (HC) requirements. It can be used when the bidder selection is based on price or best value.
The Standard Instructions 2003 and 2004 of the Standard Acquisition Clauses and Conditions (SACC)
Manual must be used in bid solicitations for goods and/or services. Contracting officers establishing bid
solicitations for low dollar value, medium and higher complexity requirements must use the standard
procurement templates following the Standard Procurement Template Procedures
(http://www.gcpedia.gc.ca/wiki/Standard_Procurement_Template_Procedures) , which provides instructions on how to
use the templates.
b. A Request for Proposal (RFP) is a form of bid solicitation that is used when the bidder selection is based
on best value rather than on price alone. A RFP should be used when, owing to the nature of the
requirement, suppliers are invited to propose a solution to a problem, requirement or objective, and the
selection of the contractor is based on the effectiveness of the proposed solution.
c. Bids must be evaluated and the successful supplier must be selected in accordance with specific criteria
and procedures as set out in the bid solicitation.
d. A bid solicitation can be used to solicit bids through public advertisement on GETS, through direct
invitation of selected suppliers by means of a source list where permitted, or by invitation of one source
only if conditions for a non-competitive process have been met.
e. Responses to the bid solicitation may result in negotiations before contract award when the bid
solicitation states the right to negotiate in accordance with the international trade agreements and/or the
Canadian Free Trade Agreement (CFTA).
f. The preparation of bids is often costly to suppliers. To keep the total cost down while ensuring freedom
of access to suppliers, consideration should be given to soliciting bids in two steps.
i. during the first step of this process, suppliers are requested to provide letters of interest and
qualifications, from which a short list is developed. During the second step, suppliers on the short
list are requested to submit detailed bids;
ii. suppliers not included on the short list are still able to request the bid solicitation and submit bids.
g. Such a process might be appropriate where many suppliers are known. When doing a two-stage
procurement, contracting officers must follow procedures required under North American Free Trade
Agreement (NAFTA), Canada-European Union Comprehensive Economic and Trade Agreement
(CETA), World Trade Organization Agreement on Government Procurement (WTO-AGP) and
Canadian Free Trade Agreement (CFTA) for selective tendering.
h. The bid solicitation should include, as a minimum, the following information:
i. a clear definition of the requirement;

ii. bidder instructions;
iii. bid preparation instructions;
iv. clear evaluation procedures;
v. certification requirements;
vi. security and financial requirements;
vii. validity of the bid;
viii. resulting contract clauses; and
ix. instructions informing bidders that they may request information about the results of the RFP and
how their bid was evaluated. (See 7.40 Debriefings to Unsuccessful Bidders/Offerors/Suppliers
for information to be included in debriefings.)
4.10.20 Request for Standing Offers

(2014-06-26)
a. A Request for Standing Offers (RFSO) is used to solicit offers for standing offer methods of supply. For
more information on the application of standing offers, see 3.40 Standing offer method of supply.
b. A RFSO can be used to solicit offers through public advertisement on GETS, through direct invitation
of selected suppliers by means of a source list where permitted, or by invitation of one source only if
conditions for a non-competitive process have been met.
c. The RFSO must give instructions on the use, purpose and limitations of the proposed standing offer. The
Standard Acquisition Clauses and Conditions Manual (SACC) Standard Instructions 2006 (competitive)
and 2007 (non-competitive) and General Conditions 2005 are designed specifically for standing offers
and must be incorporated by reference in each RFSO. Contracting officers establishing an RFSO must
use the RFSO template (http://www.gcpedia.gc.ca/wiki/Standard_Procurement_Templates-
_APPD#Request_for_Standing_Offers_Template_.28RFSO.29) following the Standard Procurement Template

Procedures (http://www.gcpedia.gc.ca/wiki/Standard_Procurement_Template_Procedures) , which provides
instructions on how to use the templates.
d. A RFSO must include the following information, as a minimum:
i. a clear definition of the requirement and the period for making call-ups;
ii. information on the number of standing offers intended to be authorized for use;
iii. offer preparation instructions;
iv. clear evaluation criteria;
v. clear evaluation procedures and basis of selection;
vi. instructions informing offerors that they may request information about the results of the RFSO
and how their offer was evaluated. (See 7.40 Debriefings to Unsuccessful
Bidders/Offerors/Suppliers for information to be included in debriefings.)
vii. clear ranking methodology where applicable;
viii. clear call-up procedure(s) including the method of allocating the work among multiple standing
offers;
ix. a notice to offerors regarding disclosure of their unit prices (see SACC Manual General
Conditions 2005);
x. conditions applicable to the RFSO;
xi. conditions applicable to the standing offer;
xii. resulting contract clauses applicable to ensuing call-ups; and

xiii. the estimated utilization, whenever practical.
4.10.20.1 Standing Offer Procedures

(2013-06-27)
a. Call-up Limits: A call-up issued against a standing offer constitutes an individual contract and normal
Treasury Board (TB) contracting limits apply. Contracting officers will set the call-up limit in the
standing offer document for the client department as defined in the standing offer, as the case may be.
For standing offers for goods, services or construction, contracting officers may set the maximum call-
up limit using Appendix C - Treasury Board Contracts Directive (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?
id=14494&section=text#appC) , as a guide. The Directive sets the dollar limit for contract entry for goods,
services and construction, above which departments must seek the approval of TB to enter into the
contract. For most clients, their individual call-up limits (GST/HST included) are usually the normal TB
contracting limits as detailed in the table below; however, PWGSC has the authority to further limit the
value of individual call-ups.
Table 1 - Financial Call-Up Limitations for Clients
Competitive Non-competitive
Goods/Construction $400,000 $40,000
Services Excluding A&E $400,000 $100,000
A&E Services $40,000 $40,000
b. Financial Limitation: The inclusion of a limitation of expenditure in standing offers is optional. The
contracting officer will determine the need for inclusion of a limit on the basis of the type of standing
offer (Master or Individual), the degree of control over total expenditures and the needs of the client
department. SACC Manual clause M4506C may apply.
c. Identified Users: The identified users authorized to make call-ups against standing offers could include
any government department, agency or Crown corporation listed in Schedule I, Schedule I.1, Schedule
II, Schedule III of the Financial Administration Act. See SACC Manual template RFSO
(http://www.gcpedia.gc.ca/wiki/Standard_Procurement_Templates-
_APPD#Request_for_Standing_Offers_Template_.28RFSO.29) , Part 6B, article 6.
d. Standing Offers Reporting: The standing offer authority may indicate in the standing offer the reporting
requirement for the offeror, or the client, as applicable. The standing offer should indicate the time
frame within which each report must be submitted following the reporting period. See SACC Manual
clause M7010C. See also 8.75.1 Reporting for Standing Offers and Supply Arrangements for more
details on reporting.
4.10.20.5 Ranking and Methodology for Standing Offers

(2011-10-04)
a. One Standing Offer:

Where only one standing offer will be authorized for use as the result of a competitive RFSO, the
resulting call-ups are considered competitive and the competitive call-up authorities can be used.
b. Multiple Standing Offers:

If more than one standing offer will be authorized for use based on a reasonable expectation of business
activity such that a single offeror would lack the capacity to meet the demands, clear ranking
methodologies and call-up procedures must be described in the RFSO, so that suppliers are aware of
these when preparing their offer. The two models of ranking methodology are described below:
i. right of first refusal basis:

The call-up procedures require that when a requirement is identified, the identified user will
contact the highest-ranked offeror to determine if the requirement can be satisfied by that offeror.
If the highest-ranked offeror is able to meet the requirement, a call-up is made against its standing
offer. If that offeror is unable to meet the requirement, the identified user will contact the next
ranked offeror. The identified user will continue and proceed as above until one offeror indicates
that it can meet the requirement of the call-up. In other words, call-ups are made based on the
"right of first refusal" basis. When the highest-ranked offeror is unable to fulfill the need, the
identified user is required to document its file appropriately. The resulting call-ups are considered
competitive and the competitive call-up authorities can be used.
ii. proportional basis:

The call-up procedures require that call-ups be issued on a proportional basis such that the
highest-ranked offeror receives the largest predetermined portion of the work; the second highest-
ranked offeror receives the second largest predetermined portion of the work, etc. (for example,
50 percent to the highest-ranked offer, 30 percent to the next highest-ranked offer and 20 percent
to the third highest-ranked offer). This predetermined distribution of the resulting work is to be
described in the RFSO so that potential offerors are aware of these when preparing their offer. It is
also known as "collective best value". The highest-ranked standing offer represents the best value
for Canada, and its offeror receives the largest portion of the work. A clear advantage in terms of
distribution of expected business volume should be given to the highest-ranked offeror (for
example, 20 percent or more than the next offer) and the same for the others. The determination
of what constitutes a clear advantage is the responsibility of the contracting officer and may vary
by commodity, service or by business case. The resultant call-ups are considered competitive and
the competitive call-up authorities can be used.
Where individual standing offers are to be authorized based on the proportional basis approach,
the contracting officer should inform the authorized user of his/her obligation to monitor call-up
activities to ensure work is allocated in accordance with predetermined work distribution.
iii. In both cases above, contracting officers should clearly state in the RFSO the expected number of
standing offers that are intended to be authorized for use. If the intention is that multiple standing
offers will be authorized for use, the RFSO should state the basis upon which call-ups will be
issued, whether right of first refusal, proportional or another method. If call-ups must be issued
against standing offers under the proportional basis approach, the breakdown must be stated (for
example, 50 percent, 30 percent and 20 percent) in the RFSO.
iv. In addition to the above, when the intention is that multiple standing offers will be authorized for
use, contracting officers could include a condition that only those standing offers, which are
within, for example, 10 percent of the best-priced offer, will be considered. The method of such
calculations should be explicitly described in the RFSO.
c. Non-competitive call-ups:
In other instances, more than one SO will be authorized for use but no ranking is established. This
would occur, for example, when prices are sought for a full range of items contained in a catalogue
where items and ranking of offers is impossible. The authorized call-up authority may choose whichever
SO to use. For some requirements, the contracting officers may set parameters to guide the authorized
users in the selection of one of the standing offers. Call-ups made against these standing offers are non-
competitive and only the non-competitive call-up authorities can be used.
4.10.20.10 Standing Offer Forms

(2010-01-11)
The following forms are used for call-ups against a standing offer and are available through PWGSC Forms
Catalogue Web site:
Standing Offer Forms
Forms
Forms Title
Number
PWGSC- Call-up Against a Standing Offer

TPSGC 942
PWGSC- Call-up Against Multiple Standing Offers

TPSGC 944
PWGSC- Call-up Against a Standing Offer for Temporary Help

TPSGC
8251
PWGSC- Call-up Against a Standing Offer for Security Guard Services
TPSGC
7169-1
PWGSC- Acquisition Card Application (MasterCard)1 may also be used at the time of the call-up
TPSGC 191 against standing offers, as an alternative to other payment methods identified in the
standing offer2.
1Because use of a credit card results in immediate payment to the contractor, the normal payment period and
interest on overdue accounts provisions do not apply. (See SACC Manual template RFSO
(http://www.gcpedia.gc.ca/wiki/Standard_Procurement_Templates-_APPD#Request_for_Standing_Offers_Template_.28RFSO.29) , Part
6B, article 2.)
2Contracting officers should verify if the client(s) need such a service and include appropriate details in the
standing offers. In such cases a call-up form may, or may not, be warranted.
4.10.25 Request for Supply Arrangements

(2014-06-26)
a. A Request for Supply Arrangements (RFSA) is used to solicit arrangements from suppliers for the
establishment of supply arrangements (SA). For more information, see 3.45 Supply arrangement method
of supply.
b. Contracting officers establishing an RFSA must use the Standard Acquisition Clauses and Conditions
Manual Standard Instructions 2008, General Conditions 2020 and the RFSA template following the
Standard Procurement Template Procedures
(http://www.gcpedia.gc.ca/wiki/Standard_Procurement_Template_Procedures) , which provides instructions on how to
use the templates.
c. The RFSA should include, as a minimum, the following information:
i. a clear definition of the requirement;
ii. supplier instructions;
iii. arrangement preparation instructions;
iv. clear evaluation procedures and basis of selection for the establishment of the list of qualified
suppliers;
v. certification requirements;
vi. conditions applicable to the SA, including the terms of the solicitation;
vii. resulting contract clauses applicable to any contract resulting from each solicitation; and
viii. instructions informing suppliers that they may request information about the results of the RFSA
and how their offer was evaluated. (See 7.40 Debriefings to Unsuccessful
Bidders/Offerors/Suppliers for information to be included in debriefings.)
d. The list of qualified suppliers as a result of a RFSA is considered to be a source list under international
trade agreements.
4.10.25.1 Supply Arrangement Procedures

(2013-01-28)
a. Before establishing a supply arrangement (SA), the contracting officer will prepare and issue an RFSA,
which will allow for a suitable pool of suppliers who meet the stated evaluation criteria. Industrial
security requirements (that is, personnel, physical and information technology security) should be
identified at this time, when any or all of these security aspects will be applicable to all client
departments of the SA.
b. The following forms must be used by client departments for the first page of the bid solicitation issued
under a SA and for the first page of the resulting contract:
PWGSC-TPSGC 9400-3 , Bid Solicitation
PWGSC-TPSGC 9400-4 , Contract
c. Contracting officers will set the contracting limits in the SA document for the identified users as defined
in the supply arrangement, as the case may be. For supply arrangements for goods, services or
construction, contracting officers may set the maximum contract limit using the Appendix C - Treasury
Board Contracts Directive (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text#appC) , as a guide. The
TB Contracts Directive sets the dollar limit for contract entry for goods, services and construction,
above which departments must seek the approval of TB to enter into the contract.
d. A legal contract does not exist between Canada and the supplier until a contract is awarded through the
completion of form PWGSC-TPSGC 9400-4 .
e. Supply Arrangement Reporting: The supply arrangement authority may indicate in the supply
arrangement the reporting requirements for the supplier, or the client, as applicable. The SA should
indicate the time frame within which each report must be submitted following the reporting period. See
SACC Manual clause S0010C. See also 8.75.1 Reporting for Standing Offers and Supply Arrangements
for more details on reporting.
f. Financial Viability: Supply arrangement authorities should note that since the statement of work or
requirement cannot be adequately defined in advance, only a preliminary review of the supplier's
financial viability will be conducted for the sole purpose of pre-qualifying suppliers for SAs. See SACC
Manual clause S0030T. See also 5.60.1 Financial Capability for more details on financial capability.
g. Identified Users: The identified users authorized to use supply arrangements could include any
government department, agency or Crown corporation listed in Schedule I, Schedule II, Schedule III of
the Financial Administration Act. See SACC Manual template RFSA, Part 6A, article 6.
4.10.25.5 International Trade Agreements and Use of Supply Arrangements

(2010-09-21)
For bid solicitations and proposed contracts under a supply arrangement (SA), the following applies:
a. Where the estimated value of a proposed contract under the SA is below the applicable North American
Free Trade Agreement (NAFTA) threshold, Canada-European Union Comprehensive Economic and
Trade Agreement (CETA) threshold and/or the World Trade Organization - Agreement of Government
Procurement (WTO-AGP) threshold, these agreements do not apply.
b. Where the estimated value of a proposed contract under the SA is above the applicable NAFTA, CETA
and/or the WTO-AGP threshold, NAFTA, CETA and/or the WTO-AGP applies to the bid solicitation.
c. Where NAFTA, CETA and/or WTO-AGP apply to a bid solicitation under a SA, a Notice of Proposed
Procurement (NPP) must be published on the Government Electronic Tendering Service (GETS) and
suppliers must be given at least 40 calendar days to bid. In addition, a supplier that requests to
participate in the bid solicitation under the SA may apply for qualification. If qualified, the supplier
must be included in the SA within a reasonable period of time. However, after bid closing, the
contracting officer does not have to delay the contract award process in order to allow a supplier to go
through the qualification process.

(2010-09-21)
Pursuant to International Trade Agreements, the existence of a list of qualified suppliers must be published by
an invitation to qualify at least once a year on GETS. The invitation to qualify must contain the conditions to be
fulfilled by suppliers to qualify. Suppliers must be allowed to apply for qualification at any time. Refer to the
provisions set out in CETA Article 19.8.7-11 (http://www.international.gc.ca/trade-commerce/trade-agreements-accords-
commerciaux/agr-acc/ceta-aecg/text-texte/19.aspx?lang=eng) on the use of multi-use lists when working with source lists.
Note the same provisions are included in the WTO-AGP (Article IX: Qualification of Suppliers).
4.10.25.15 Agreement on Internal Trade, Canadian Free Trade Agreement and Use of
Supply Arrangements
(2017-07-01)
Where the estimated value of a proposed contract under the supply arrangement is above the CFTA or AIT
threshold, CFTA or AIT applies to the bid solicitation. Otherwise, CFTA or AIT does not apply to that proposed
contract.
Where CFTA or AIT apply to a bid solicitation under a supply arrangement, the CFTA and AIT allow the use of
source lists without publication of a NPP, provided that all suppliers on the source list be invited to bid and that
they be able to apply for qualification at any time. It is PWGSC policy that suppliers must be given at least
15 calendar days to bid.

(2017-07-01)
Pursuant to CFTA and AIT, the existence of a list of qualified suppliers must be published at least once a year
by an invitation to qualify on GETS or predetermined newspapers. The invitation to qualify must contain the
conditions to be fulfilled by suppliers to qualify. Suppliers must be allowed to apply for qualification at any
time.
4.10.30 Professional Services Sourcing Tools

(2017-07-01)
Professional services sourcing tools that may help client departments with their requirements are provided
below.
a. Temporary Help Services
i. THS are traditionally used:
A. when a public servant is absent for a temporary period of time;
B. when there is a requirement for additional staff during a temporary workload increase and
there is an insufficient number of public servants available to meet the requirement; or
C. a position is vacant and staffing action is being completed.
ii. THS is a tool to assist federal departments in the National Capital Region in their procurement of
THS with a value below the North American Free Trade Agreement (NAFTA) threshold,
including all subsequent amendments and Goods and Services Taxes. Some of the sources are:
A. Public Works and Government Services Canada (PWGSC) issues Regional Master
Standing Offers (RMSOs) to provide for qualified personnel for temporary assignments.
B. RMSOs for temporary help services are requested and authorized by the regional offices of
PWGSC. Contracting officers must keep client departments informed of contracting
processes, procedures and definitions of categories of service with respect to THS.
C. There is a temporary help contracting officers' network, which has been working with
functional guidance from the Professional Services Procurement Directorate, Services and
Technology Acquisition Management Sector.
iii. For additional information, consult the contact person identified on the Temporary Help Services
(http://www.tpsgc-pwgsc.gc.ca/app-acq/sat-ths/region-eng.html) (On-Line System) Web site.
b. ProServices (http://www.tpsgc-pwgsc.gc.ca/app-acq/sp-ps/index-eng.html) is a professional services mandatory

method of supply for requirements below the North American Free Trade Agreement (NAFTA)
threshold and is available through the Centralized Professional Services ePortal.
c. SELECT is a database of approved firms, providing construction, architectural and engineering services,
as well as related maintenance and consulting services. It is used by PWGSC to invite suppliers to bid
on real property consulting services below the NAFTA threshold, and for construction services below
the CFTA or AIT threshold.
d. In-Service Support Supply Arrangement (ISS SA) is currently limited to a supply arrangement for the
professional services related to Human Resources Management, Organizational Management and
Project Management.
4.15 Preparation of the Solicitation Documents

(2015-02-25)
a. The solicitation documents must be prepared in a way to reflect the approved procurement strategy.
b. Contracting officers are encouraged to obtain a review of the solicitation documents prior to release.
c. Contracting officers must perform due diligence in identifying potential conflicts of interests. This can
be done by asking the client department if anyone who is not an employee of Canada is or will be
involved in the preparation of the statement of work or requirement, the evaluation criteria, and the
evaluation. Contracting officers may also consider asking if any employees or former public servants
have connections in their personal or professional life, which may lead to suppliers asking questions
about favoritism. Contracting officers should consult the conflict of interest clause contained in the
Standard Acquisition Clauses and Conditions(SACC) Manual standard instructions.
4.15.1 Departmental Standard Procurement Templates

(2014-06-26)
a. Public Works and Government Services Canada (PWGSC) has committed to promoting a "common
look and feel" in acquisition documents by standardizing terminology, simplifying contract language by
using plain language, and ensuring more consistency and uniformity.
b. PWGSC has implemented departmental standard procurement documents which include standard
instructions, general conditions and templates for bid solicitations, requests for standing offers (RFSOs)
and requests for supply arrangements (RFSAs) for use by its contracting officers for the procurement of
goods, services or both, excluding construction and architectural and engineering requirements.
c. Subject to the applicable procedures for use of the Standard Procurement Templates contained in the
SACC Manual, contracting officers must use the bid solicitation and resulting contract templates for
competitive and non-competitive requirements for low dollar value (Simple), medium complexity (MC)
and higher complexity (HC), and the templates for Request for Standing Offers (RFSO) and Request for
Supply Arrangements (RFSA) for the procurement of goods, services or both. To maintain the "common
look and feel" for PWGSC's acquisition documents, contracting officers must not modify or change the
order and content of these templates, except where indicated. Where applicable, contracting officers
should obtain from their supervisor the most current standard template used within their respective area
that has been customized for specific requirements in accordance with the standard templates.
Directorates needing assistance in developing documents based on these templates should contact the
Procurement Process Tools Division of the Policy, Risk, Integrity and Strategic Management Sector, by
e-mail at: outilsapprov.proctools@tpsgc-pwgsc.gc.ca.
d. There are five standard procurement templates, available in Microsoft Word (.doc) and Word Pro (.lwp).
Associated marked-up PDF files showing the latest changes are also available for each template.
Standard Procurement Template Procedures
(http://www.gcpedia.gc.ca/wiki/Standard_Procurement_Template_Procedures) are also provided to instruct contracting
officers on how to use the templates.
e. Procurement of most goods and services must be carried out using the general conditions and
supplemental general conditions found in the SACC Manual. The conditions to be used depend on the
nature and complexity of the procurement and are provided in Annex 4.1: General Conditions and
Supplemental General Conditions.
f. Real Property Contracting utilizes their own separate standard templates for construction and
architectural and engineering services.
g. The cover pages of solicitations generated by the Automated Buyer Environment (ABE) must be used
for solicitations issued by PWGSC (whether issued through ABE or manually posted on GETS).
Manager's approval is required to issue solicitations that do not use ABE generated cover pages.
Solicitations must specify the solicitation closing date on the cover page.
h. Contracting officers must ensure that instructions for the submission of solicitations and the solicitation
closing date and time for each solicitation are clearly stated in the procurement documents. Contracting
officers must also ensure that the solicitation closing date, which appears on the Notice of Proposed
Procurement, is consistent with the solicitation.
4.15.5 Green Procurement Requirements

(2010-01-11)
a. Contracting officers must ensure that value for money has been achieved for Canada. Value for money
includes the consideration of many factors such as cost, performance, availability, quality and
environmental performance.
b. Contracting officers must consider green procurement in the preparation of solicitation documents and
resulting contracts, including requests for standing offers and requests for supply arrangements, to
ensure that environmental considerations, if appropriate, are addressed. Contracting officers must also
consult with relevant commodity teams with respect to Green Procurement Plans and Guide to
Completion (http://www.tpsgc-pwgsc.gc.ca/app-acq/ae-gp/pae-gpp-eng.html) . Environmental considerations that are
related to specific commodities can then be utilized in the procurement. Contracting officers should
consider departmental green procurement targets and the green procurement experience of other
departments.
c. Until such time as standard clauses and conditions on environmental performance considerations have
been developed centrally, they should be developed by contracting officers as appropriate to support the
inclusion of environmental performance requirements, recognizing that they will have to be approved by
Legal Services.
d. Contracting officers can consult Annex 2.2: Green Procurement: Environmental Factors and Evaluation
Indicators for a list of factors to be considered in developing the solicitation, as well as the Green
Procurement Checklist (http://www.tpsgc-pwgsc.gc.ca/ecologisation-greening/achats-procurement/trousse-toolkit/page-4-
eng.html) within the Environmental Awareness Tool Kit.
e. For additional information, consult the Developing Green Procurement Specifications within the
Environmental Awareness Tool Kit and section 3.2 Selection According to Technical Capacity of the
Guideline for Integration of Environmental Performance Considerations in Federal Government
Procurement.
f. Contracting officers can contact the Green Procurement Team, within the Procurement Renewal Office,
by e-mail at AchatsEcologiques.GreenProcurement@tpsgc-pwgsc.gc.ca, to obtain assistance with
integrating environmental considerations in their solicitation documents.
4.15.10 Methods of Responding to a Solicitation

(2011-10-04)
a. The method and location of bid receipt must be specified in the solicitation.
b. The following methods of response may be used:
i. in writing and submitted to the specified Bid Receiving Unit: all ($) dollar values;
ii. in writing and submitted directly to the contracting officer: below $25,000, including all
applicable taxes;
iii. verbally by telephone
A. below $25,000, including all applicable taxes;
B. any amount, in cases of documented extreme urgency (director's approval is mandatory);
iv. by electronic transmission (CD or facsimile) and submitted to the specified Bid Receiving Unit.
c. When some form of response is not acceptable, including any form of electronic transmission, this must
be clearly indicated in the solicitation and should be in the Notice of Proposed Procurement.
4.15.15 Technical Data

(2010-08-16)
a. For technical data, not owned by PWGSC, the contracting officer must ensure that the government
obtains the right for the distribution and use of such data.
b. For DND requirements form PWGSC-TPSGC 1065, Request for Distribution of Technical Data, must
be used. Contracting Officers must send (by fax,/ e-mail, etc.) the completed form to DSCOs repository
section / staff DSCO 4-7 @ the National Printing Bureau (NPB - 45 Blvd. Sacré-Coeur, Gatineau, QC)
in sufficient time to ensure that the data will be available when the bid solicitation is issued.
c. PWGSC will not provide data available to potential bidders through normal business channels.
Examples of such material technical data are specifications of Canadian Standards Association (CSA),
Society of Automotive Engineers (SAE), National Electrical Maintenance Association (NEMA),
Underwriters' Laboratories of Canada (ULC) Standards and the Canadian General Standards Board
(CGSB).
4.20 Official Languages Obligations in Procurement

(2010-01-11)
a. PWGSC must comply with the Official Languages Act and the Official Languages Regulations. The
basic rule is that any member of the public in Canada has the right to communicate with and to receive
available services in either official languages from federal institutions head or central office or from any
office in the National Capital Region, or elsewhere where there is significant demand in that language.
Relating to procurement, this generally means that a supplier may receive solicitation documents and
bid in either official language.
b. The official languages parameters provided below are pursuant to the TB Contracting Policy, Appendix
F - Official Languages (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?evttoo=C&section=text&id=14494#appF) , Official
Languages, for all federal departments and agencies that are subject to the Government Contract
Regulations.
c. When procurements are national in scopeor originate from an office having the obligation to serve the
public in both official languages, pursuant to the Act and Regulations, all regular or standardized
documents must be provided in both official languages. This requirement also applies to public notices,
statements of terms and conditions, basic forms, bid solicitations, standards, purchase descriptions and
contracts.
d. On an exceptional basis, when a bilingual office can justify that demand will be in one language only or
that it is legally and/or technically impossible to provide the non-standard documents such as
specifications in both languages, those documents may be issued in one language only. When this
occurs, the reason for not issuing the documents in both official languages must be clearly documented
on file.
e. Such a decision requires before the factsubstantiation. Acceptable justifications might include:
i. an industry that has specifically requested documents in one language; and
ii. a two-stage procurement, in which second stage suppliers have all indicated that the working
language is either English or French - not both.
f. The fact that documents have never been asked for in the second official language in the past is NOT an
acceptable justification. If there is subsequently a request from a supplier for documents in the second
official language, the client department must be notified immediately and requested to provide a
translation of the document, as soon as possible. The bidding process must be suspended while the
document is being translated and the solicitation closing date must be extended, accordingly. The
requester must have sufficient time, after receipt of the translated documents, to prepare a proper bid
using those documents. This may require an additional extension to the closing date in order to provide
equity of opportunity.
g. When the procurement is not national in scopeor when an office of a federal institution does not have
official languages obligations (i.e. unilingual offices), the solicitation documents may be prepared in the
official language of the majority of the population concerned only. It is suggested that when a unilingual
office anticipates significant demand for service (documents, etc.) relating to a particular procurement in
the second official language, it considers transferring the file to a bilingual office before the Notice of
Proposed Procurement (NPP) is issued, so that bilingual services will be available.
h. Another reason that could justify not publishing a bilingual solicitation is when the owner of a
copyright, trademark, patent, or licensed material refuses permission to have the material translated. In
that case, the NPP must indicate that the documents will be issued in one language only and the reason
included, when this would provide useful information to suppliers. A NPP might state: "Due to
copyright restrictions, document X is available only in English or in French."
i. Suppliers who carry out work on behalf of a department or agency in a location where the department or
agency would have to provide services or communications to the public in both official languages must
also do so in both official languages. This means that the Statement of Work must include the conditions
to ensure that, when the public includes members of both official language communities, the supplier
observes the requirements of the Act and Regulations on service to the public and, where applicable, of
Treasury Board policies.
j. While the Treasury Board Secretariat requires that contracts be available in the two official languages,
PWGSC Legal services advise that only one version should be signed, that is, that selected by the
contractor.
4.21 Integrity Provisions

(2016-06-09)
a. Further to the Integrity Regime as summarized in section 3.51 Integrity Overview, all solicitations must
include the appropriate standard instructions and general conditions which include the Integrity
Provisions. Any request for modification to the Integrity Provisions or exemption, in part or its entirety,
from the application of the Ineligibility and Suspension Policy (http://www.tpsgc-pwgsc.gc.ca/ci-if/politique-
policy-eng.html) must be escalated to the Assistant Deputy Minister, Acquisitions Branch through the
Acquisitions Program Integrity Secretariat, by email at TPSGC.DGAIntegrite-
ABIntegrity.PWGSC@tpsgc-pwgsc.gc.ca.
b. The Ineligibility and Suspension Policy identifies certain contracts and types of contracts that are
exempted from the application of the Policy, however all solicitations and contracts must include the
Integrity Provisions. As the Policy is incorporated by reference, any applicable exclusion will therefore
apply.
c. In accordance with the Integrity Provisions and the Ineligibility and Suspension Policy, the following
must be provided as part of the solicitation process.
i. Bidders, offerors or suppliers that are corporate entities, including those bidding as joint
ventures, must provide a complete list of names of all current directors or, for a privately owned
corporation, the names of the owners of the corporation.
ii. Bidders, offerors or suppliers bidding as sole proprietors, including sole proprietors bidding as
joint ventures, must provide a complete list of the names of all owners.
iii. Bidders, offerors or suppliers that are a partnership do not need to provide a list of names.
Contracting officers only need to submit the information provided by the bidder, offeror or
supplier when requesting an integrity verification.
A. The Integrity Database Services (IDS) will determine whether additional information is
required and will ask the contracting officer to contact the bidder, offeror or supplier if
needed.
B. If required by IDS, contracting officers must notify the bidder, offeror or supplier and
request that a list of names be provided within a recommended 10 business days. Failure to
provide the names within the specified timeframe will render the bid, offer or arrangement
non-responsive.
iv. All bidders, offerors or suppliers must provide, if applicable, a complete list of all foreign
criminal charges and convictions pertaining to itself, its affiliates and its proposed first tier
subcontractors that, to the best of their knowledge and belief may be similar to one of the listed
offences in the Ineligibility and Suspension Policy. This is to be provided using the Declaration
form for procurement (http://www.tpsgc-pwgsc.gc.ca/ci-if/declaration-eng.html) . See 5.5.5 Certifications,
declarations and proofs.
d. For existing contracts that do not contain the most recent Integrity Provisions:
i. Contracting officers are to propose adding the new Integrity Provisions to the contract when
exercising an option or modifying the terms of the contracts.
ii. Where the contractor refuses to make changes to the Integrity Provisions or provide the
Certification as requested in the Template Letter for Addition of Provisions to an Existing
Contract (see Annex 8.13: Letter Templates for Integrity), best efforts should be made to ensure
that the supplier has a clear understanding of the terms of the new Integrity Provisions. This may
include having a manager contact the contractor directly.
iii. Where the contractor still refuses to update the Integrity Provisions, the refusal should not prevent
the continuation of business operations and the contract amendment may proceed.
iv. For assistance, contact the Acquisitions Program Integrity Secretariat (APIS) by email at
TPSGC.DGAIntegrite-ABIntegrity.PWGSC@tpsgc-pwgsc.gc.ca.
e. See section 5.16 Integrity Compliance for details on the process to be followed before contract award,
issuance of a standing offer or supply arrangement, or publishing of a pre-qualified supplier list.
4.21.1 Administrative Agreements

(2016-04-04)
Administrative Agreements are managed by the Departmental Oversight Branch (DOB). They are negotiated
agreements between Public Works and Government Services Canada (PWGSC) and a bidder, offeror, or
supplier, current or potential, to, among other things:
a. reduce the period of ineligibility to contract with Canada;
b. enter into a contract where the Public Interest Exception (PIE) is invoked and where time is not of the
essence; or
c. continue a contract where the contracting authority has a right to terminate the contract due to non-
compliance with the Ineligibility and Suspension Policy (http://www.tpsgc-pwgsc.gc.ca/ci-if/politique-policy-
eng.html) .
Additional information on Administrative Agreements can be found in Section 14. Administrative Agreements
of the Ineligibility and Suspension Policy.
4.21.2 Public Interest Exception (PIE)

(2016-04-04)
a. Where it is necessary to do so in public interest, Public Works and Government Services Canada may
enter into a contract with a bidder, issue a standing offer with an offeror, or a supply arrangement with a
supplier, that has been determined to be ineligible or has been suspended under the Ineligibility and
Suspension Policy (http://www.tpsgc-pwgsc.gc.ca/ci-if/politique-policy-eng.html) .
b. A Public Interest Exception (PIE) cannot be invoked in situations where the supplier has no capacity to
contract with Canada pursuant to subsection 750(3) of the Criminal Code.
c. If a contract must be awarded to an ineligible or suspended supplier, the contracting officer must
escalate the request to the Assistant Deputy Minister, Acquisitions Branch through the Acquisition
Program Integrity Secretariat by email at TPSGC.DGAIntegrite-ABIntegrity.PWGSC@tpsgc-
pwgsc.gc.ca.
d. Complete details regarding Public Interest Exceptions are available in Section 15. Public Interest
Exception of the Ineligibility and Suspension Policy.
4.21.3 Contracting with Subcontractors

(2016-04-04)
a. When contracting with the Government of Canada, contractors understand that they cannot enter into a
contract with first tier subcontractors that have been determined to be ineligible or suspended under the
Ineligibility and Suspension Policy (http://www.tpsgc-pwgsc.gc.ca/ci-if/politique-policy-eng.html) . A first tier
contractor is defined in the Policy as “a subcontractor with whom a supplier has a direct contractual
relationship to perform a portion of the work pursuant to a contract or real property agreement between
the supplier and Canada, unless the subcontractor merely supplies commercial-off-the-shelf goods to the
supplier”.
b. Bidders are responsible for verifying the status of first tier subcontractors prior to submitting a bid that
identifies first tier subcontractors and before entering into a contractual relationship with first tier
subcontractors.
c. If a contractor must enter into a first tier subcontract with an ineligible or suspended subcontractor, they
must first obtain written approval of the appropriate deputy head or delegate by forwarding this request
to the contracting authority. Contractors who enter into a first tier subcontract with an ineligible or
suspended first tier subcontractor without the prior written consent from the relevant deputy head can be
declared ineligible for a period of five years from the date of Public Works and Government Services
Canada (PWGSC)’s determination.
d. If a successful bidder wishes to replace a first tier subcontractor that has been determined ineligible or
suspended prior to contract award, a rigorous re-evaluation process that ensures that all bidders are
treated fairly and equally must be followed. This process will be tailored, as appropriate, to individual
situations and the specific procurement circumstances at hand.
e. Any request from successful bidders wishing to replace a now ineligible or suspended first tier
subcontractor, or from contractors wishing to enter into a first tier subcontract with an ineligible or
suspended subcontractor must be sent to the Acquisition Program Integrity Secretariat (APIS) by email
at TPSGC.DGAIntegrite-ABIntegrity.PWGSC@tpsgc-pwgsc.gc.ca.
f. In situations where there is a prolonged bid evaluation period, contracting officers must remind the
successful bidder, using the template provided by APIS, that:
i. they are obligated to obtain PWGSC approval prior to entering into a contractual relationship with
an ineligible or suspended first tier subcontractor; or
ii. they can replace a now ineligible or suspended first tier subcontractor, whose eligibility standing
has changed since the bid was originally submitted, as long as the subcontractor suggested as a
replacement is accepted by Canada.
g. Additional information regarding contracting with ineligible or suspended subcontractors can be found
in Section 16. Subcontractors of the Ineligibility and Suspension Policy (http://www.tpsgc-pwgsc.gc.ca/ci-
if/politique-policy-eng.html) .
4.25 The Requirement

(2010-01-11)
a. The requirement could take the form of technical requirements for the procurement of goods or a
Statement of Work for the procurement of services. Requirements must be defined and specifications
and estimates established before bids/offers are solicited and contracts let, so that all potential suppliers
are treated equally. Adequate specification details must be available to all interested or qualified
suppliers.
b. For more information on the preparation of the requirement, consult Chapter 2 - Defining the
Requirement and Requisition Receipt.
4.30 General Instructions for the Preparation of a Solicitation

(2010-01-11)
4.30.1 Requirement and Statement of Work

(2013-04-25)
The requirement must be clearly identified, the deliverables and the delivery schedule defined and the tasks
must be included in the Statement of Work.
For more information, consult the Statement of Work Guide (available on GCpedia - Acquisitions Program
Policy Suite - Procurement Process (http://www.gcpedia.gc.ca/wiki/AP_-_Procurement_Process) ).
4.30.10 Industrial security in contracts

(2017-11-28)
a. For all proposed procurement with security requirements, including pre-contractual agreements,
contracts, call-ups and service agreements, the Security Requirements Check List (SRCL) must be
prepared by the client department and provided directly to the Canadian Industrial Security Directorate
(CISD) prior to sending the TPSGC-PWGSC 9200 Requisition for Goods and Services and
Construction form to PWGSC Allocation Unit. Therefore, for every proposed procurement, the
department identifies the security requirements by completing an SRCL or by certifying in writing that
there are no security requirements. CISD will then provide the security clauses to the client department.
The SRCL and the security clauses, or the Certification, must be provided along with the TPSGC-
PWGSC 9200 Requisition for Goods and Services and Construction form and must be on file and
available upon demand.
b. A Request for Private Sector Organization Screening (PSOS) form may also be included with the SRCL
if the client knows of possible bidders that are not registered with CISD. This form is prepared by the
client department, the contracting officer or prime contractor (where subcontracting is required) to
initiate registration with CISD.
Note: To request a copy of the PSOS form, please contact the Contract Security Program's Security and
Information Services at ssi-iss@pwgsc-tpsgc.gc.ca.
c. The PSOS form provides CISD with mandatory information not included in the SRCL to conduct
background and security screenings. As CISD is now under a cost recovery regime, costs will be
associated with all screening requests the client departments/contracting officers are sponsoring.
d. The role of CISD is to:
i. review the SRCL, Request for Private Sector Organization Screening (PSOS) form if applicable
and any attachments which contain security provisions, such as the Statement of Work, for
accuracy, completeness, and authorized signatures;
ii. for potential international contracts, ensure that the participating countries have the appropriate
industrial security Memorandum of Understanding (MOU), arrangements, or agreements with
Canada (see 4.30.25 Industrial Security and International Contracts). If foreign-based suppliers
are expected to bid, a list of the applicable country of origin should be provided to CISD, and the
appropriate clauses related to foreign-based suppliers will be provided;
iii. sign the SRCL form as the Contracting Security Authority and provide the applicable security
clauses to the client department;
iv. provide information to the contracting officer on the security status of each potential bidder,
contractor, or offeror, as applicable;
v. provide to Canadian-based bidders, contractors, or offerors, information on the preparation and

transmission of classified or protected information or assets. Classified information and assets
must be forwarded to the Document Control Section (DCS).
e. The fully signed SRCL must contain the following signatures:
i. the Organization Project Authority must sign the form to indicate that the SRCL properly reflects
the security requirements of the requirement;
ii. the Organization Security Authority must also sign the form to indicate that the SRCL properly
reflects the industrial security requirements of the requirement. CISD will not process the SRCL
and provide the applicable clauses if the above two signatures are not provided;
iii. the contracting officer must sign block 16 "Procurement Officer" only after CISD have advised
that the successful bidder has received their security clearance, which means just prior to award.
That signature on the SRCL confirms that:
A. all information on file relating to the industrial security requirement has been provided to
CISD for their review prior to solicitation stage;
B. the contracting officer intends to attach the fully completed and signed SRCL, as well as,
insert the security clauses provided by CISD into the contract; and
C. CISD has provided confirmation that the proposed contractor meets the security
requirements.
Important: When security clearances such at IT, Production and/or COMSEC are required,
seek assurance of these specific security types from CISD as they are contract specific and
not blanket clearances held by the organizations.
iv. CISD signs as indicated in (a) (iii) above.
f. Client departments may provide the hard copy of the SRCL form Security Requirements Check
List (SRCL) (form TBS/SCT 350-103) (http://www.tbs-sct.gc.ca/tbsf-fsct/350-103-eng.asp) or use the online
security requirements checklist (SRCL) service. To use the online service register online or contact the
Contract Security Program (http://www.tpsgc-pwgsc.gc.ca/esc-src/communiquer-contact-eng.html) .
g. If a requirement is cancelled, the contracting officer must advise CISD immediately so that the file can
be appropriately closed out.
h. Contracting officers may not reuse previously approved clauses, except in processes or instruments that
have been approved by CISD.
4.30.15 Industrial Security in Solicitations

(2013-01-28)
a. When there are industrial security requirements, the evaluation section or the security requirements
section of the solicitation documents must clearly state whether security requirements must be met
before solicitation closing date or before contract award. The contracting officer should be fully aware
of the time frames required for the required security clearances to be granted, and whether or not the
solicitation document will contain conditions or a time limit in which suppliers must obtain the required
security clearance, following the solicitation closing date. The choice of such time frames must not
unfairly discriminate between potential suppliers.
b. The completed SRCL must be attached as an annex to the solicitation, though the signature page may be
omitted.
c. Contracting officers should specify in their solicitation document whether or not suppliers must include
information in their bid to allow the security verification process or clearance process to begin.
Contracting officers may contact CISD for assistance in determining the best approach.
d. For procurements with security requirements for work to be performed or documents safeguarded at the
contractor’s facilities, security clearance has to be obtained for those facilities before any work can start.
The contractor’s address indicated in the bid document is not necessarily the location of where the
contractor intends to perform work or keep documents. It is important for the Canadian Industrial
Security Directorate (CISD) to know, as early as possible in the process, in which of the contractor’s
facilities the work will be performed or the government's sensitive information/assets will be
safeguarded if issued a contract, standing offer or supply arrangement.
e. In the solicitation document, the Contracting Officer needs to add, under the Security references
"Location(s) of Work Performance" for the contractor to complete.
4.30.20 Industrial Security in Standing Offers and Supply Arrangements

(2013-01-28)
a. When the contracting officer and the client department have determined that it is appropriate to use a
standing offer or supply arrangement method of supply for requirements with an industrial security
requirement, the solicitation documents should specify the minimum level of security clearance required
as well as the circumstances under which a higher level would be required. Instructions to users of the
arrangement must be clear on:
i. how to identify which level of security applies in resulting contracts; and
ii. the client department's responsibility in confirming with CISD, prior to issuing a contract or call-
up, that the suppliers meets the security requirement.
IMPORTANT: When security clearances such as IT, Production and/or COMSEC are required, seek
assurance of these specific security types from CISD as they are contract specific and not blanket
clearances held by the organizations.
b. Once the solicitation phase is complete, the contracting officer must provide CISD with a copy of the
Request for Standing Offers or Request for Supply Arrangements, as well as a list of proposed suppliers
so that CISD can validate that the selected suppliers meet the minimum security requirements stipulated
in the arrangement.
c. Resulting call-ups and contracts, which have security requirements, must identify the applicable security
requirement, and the applicable SRCL must be attached to the call-up or contract.
d. A copy of all such call-ups and contracts must be sent to CISD. It is not necessary to send the
"authorization to use" document to CISD.
4.30.25 Industrial Security and International Contracts

(2013-01-28)
a. For contracts with foreign-based suppliers, the contracting officer must advise CISD of the country of
origin for each foreign-based supplier that is interested in participating in the procurement activity.
CISD will then verify if there is an industrial security MOU or arrangement in place with the relevant
foreign country. If so, the appropriate equivalent security clauses will be provided to the contracting
officer.
b. Protected/classified information or assets for transmittal outside of Canada must be sent to the
Document Control Section (DCS) of CISD who will then forward it to the recipient. Onward
transmission and receipt through approved security channels will be undertaken by DCS.
c. The contracting officer must submit the Statement of Work to CISD for review of any security wording
to ensure compliance with the terms of the bilateral agreement.
4.30.30 Foreign ownership, control or influence

(2017-04-27)
a. A Foreign Ownership, Control or Influence (FOCI) evaluation must be done in all situations where a
third party individual, firm or government is assumed to possess dominance of, or authority over, a
Canadian facility to such a degree that a third party individual, firm or government may gain
unauthorized access to extremely sensitive information (INFOSEC). A FOCI evaluation is an
administrative determination of the nature and extent of foreign dominance over the contractor's
management and/or operations.
b. Requirements involving the potential release of extremely sensitive information (INFOSEC), a special
category of classified Communications Electronic Security (COMSEC) information, are subject to a
FOCI review by the Contract Security Program (CSP). Recommendations regarding the use of FOCI
will then be submitted to the procurement directorate, and if appropriate, to the Procurement Review
Committee Secretariat, Acquisitions Branch.
c. Suppliers must be informed of the requirement for a FOCI evaluation in the solicitation; however,
completed packages from suppliers should only be requested after the bid evaluation process has
determined which supplier(s) will be awarded a contract. The material that a supplier has to provide for
such an evaluation is often extensive and time consuming to provide.
d. Contracting officers must provide two copies of the FOCI submission for the successful supplier(s) to
CSP. Verification of the FOCI and the required Facility Security Clearance of the potential Canadian or
United States-based supplier must be obtained from CSP before contract award.
e. Any irregularity known to contracting officers regarding compliance with the INFOSEC access
approval of the contractor involving extremely sensitive INFOSEC must be immediately reported to the
Director of CSP.
4.30.35 Information on Comprehensive Land Claims Agreements

(2015-09-24)
For more information on Comprehensive Land Claims Agreements, consult 9.35 Comprehensive Land Claims
Agreements (CLCAs).
4.30.40 Information on the Procurement Strategy for Aboriginal Business

(2015-09-24)
For more information on the Procurement Strategy for Aboriginal Business, consult 9.40 Procurement Strategy
for Aboriginal Business.
4.30.45 Standard Instructions, Clauses and Conditions

(2010-01-11)
Standard instructions, clauses and conditions set out in the Standard Acquisition Clauses and Conditions
(SACC) Manual issued by PWGSC may be added in the solicitation documents to meet specific commodity
needs. Contracting officers must ensure that there are no inconsistencies with the applicable general conditions.
4.30.45.1 Equivalent Products

(2017-09-21)
a. When there is no alternative to specifying a particular manufactured product, the solicitation should,
whenever possible, include SACC Manual clause B3000T for equivalent products. Before issuing the
solicitation, the contracting officer should contact the client department to discuss the potential for
equivalent products and any mandatory performance criteria related to the item being specified that
must be included in the solicitation to ensure proper evaluation of a substitute product's equivalency.
Contracting officers must ensure that all references to a manufacturer's brand name, model and/or part
number contained anywhere within the solicitation are followed by the words "or equivalent".
b. For procurements subject to North American Free Trade Agreement (NAFTA), Canada-European Union
Comprehensive Economic and Trade Agreement (CETA), World Trade Organization Agreement on
Government Procurement (WTO-AGP), Canadian Free Trade Agreement (CFTA) or Agreement on
Internal Trade (AIT), provision for equivalent products must be made. Contracting officers must give
consideration to supplier claims of equivalence and have some way to determine if the proposed
products are, indeed, equivalent.
4.30.45.5 No Substitute Products

(2017-09-21)
When a manufacturer's brand name, model and/or part number are used in the item description and substitutes
will not be considered in a solicitation, SACC Manual clause B4024T should be used. This clause must not be
used in solicitations subject to NAFTA, CETA or WTO-AGP or CFTA.
4.30.45.10 Multi-Item Bids/Offers

(2010-08-16)
a. A requirement can either be on an aggregate basis or an item-by-item basis or a combination of the two.
If it is on aggregate basis, the entire requirement will be awarded to a single supplier. An item by item
basis will be used, for example to obtain better prices for certain products or to provide complete
coverage when one supplier cannot meet the entire requirement.
b. The evaluation of multi-item bids/offers should be governed by cost-benefit considerations.
c. The savings generated from the split of a requirement into more than one contract should be compared
with the additional costs usually associated with the award of multiple contracts or issuance of multiple
standing offers:
i. costs to PWGSC, for example, the costs of awarding, administering and closing-out contracts;
ii. costs to the client department, for example, extra billing and inspection, and other related
administrative costs; and
iii. costs to the contractor, for example, transportation costs, price per unit.
d. Sectors/regions should determine their own administrative premiums for costs such as those identified
in paragraphs (i) and (ii) above.
e. The savings from awarding more than one contract must also be weighed against possible
disadvantages, such as:
i. the difference in delivery times for components provided by different suppliers;
ii. the compatibility of items supplied by different suppliers; and
iii. the service or maintenance of items after delivery.
f. While the standard instructions of the bids and offers provide for their acceptance "in whole or in part",
it is sometimes appropriate to emphasize the option to award a contract or issue a standing offer, on
either an aggregate or an item-by-item basis. When using the aggregate or item-by-item basis, SACC
Manual clause A0272T should be used for bid solicitations and M0032T for Request for a Standing
Offer (RFSOs).
4.30.45.15 Bidders' Conferences and Site Visits

(2014-06-26)
a. The purpose of a bidders' conference is to provide information to suppliers and to ensure that all
suppliers receive the same information. For detailed information on bidder’s conferences, refer to
section 3.115 Bidders' Conference.
b. Site visits are meetings held on site to provide suppliers with opportunities to view and assess aspects of
the work that cannot be adequately described in performance specifications or the statement of work.
For more information on site visits, please see section 3.116 Site Visits.
4.30.45.20 Intellectual Property

(2010-01-11)
a. It is the policy of the Government of Canada that the contractor be the owner of any foreground
information (as defined in the conditions applicable to the contract) created by the contractor in
performance of the contract. This is however subject to some exceptions set out in Section 6 of TB
Policy, ARCHIVED - Title to Intellectual Property Arising Under Crown Procurement Contracts
(http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=13697&section=text#cha9) .
b. Client departments should be requested to fully justify any requests to retain ownership of intellectual
property (IP), as provided for in the policy, except for the case of non-software copyright, where the
practice of PWGSC practice is to make Canada ownership the norm.
c. The solicitation should make clear to suppliers the ownership of any IP rights, as determined by the
client department. SACC Manual clauses may be used in conjunction with the general conditions and
supplemental general conditions to meet the requirement of the client department. See Annex 4.2:
Intellectual Property.
4.30.45.25 Former Public Servants

(2015-02-25)
a. Former public servants must comply with the Conflict of Interest Act. This is a term of all general
conditions and forms part of all solicitations.
b. For service contracts, Standard Acquisition Clauses and Conditions (SACC) Manual clauses A3025T,
A3026T, M3025T and M3026T, as applicable, must be used in all solicitations to ensure compliance
with former public servant policies. Suppliers are required to self-identify as a former public servant, if
applicable, and to make available to Canada any additional details of their status with respect to cash-
out amounts and time equivalents, pension payment details and status of ownership.
c. Former public servants must provide the required information identified in the SACC clause (A3025T,
A3026T, M3025T, or M3026T) before contract award or issuance of a standing offer. Canada will
declare a bid or offer non-responsive if the required information is not completed and submitted as
requested.
d. The required information will be a condition precedent to contract award, as opposed to a mandatory
requirement for evaluation purposes.
e. All information that suppliers provide to Canada is subject to verification by Canada during the
evaluation period (before award of a contract) and after award of a contract to ensure compliance. For
more information on definitions and exceptional contracting authorities, consult Chapter 3 Procurement
Strategy and Chapter 6 Approvals and Authorities.
4.30.50 Taxes and Duties

(2010-01-11)
For more information on taxes and duties, consult annexes Annex 4.3: Taxes and Duties, Annex 4.4: Supplies
Exempt from Goods and Services Tax/Harmonized Sales Tax and Annex 4.5: Goods Subject to Excise Tax.

(2010-01-11)
Solicitations for janitorial, food catering and security services must include SACC Manual clause A0075T
whenever information concerning each employee of a previous supplier must be provided to other suppliers, in
accordance with the Ontario labour legislation. See 4.70.105 Ontario Labour Legislation and Annex 4.6:
Ontario Labour Legislation.
4.30.60 Communications Notification

(2012-07-16)
Process cancelled as per direction from Communications Branch in July 2010.
4.35 Evaluation Criteria

(2010-01-11)
All evaluation criteria must be clearly specified in the solicitation document and their relative weighing and
importance must be described. If applicable, the solicitation must also indicate whether, and under what
conditions, alternatives or substitutes will be considered. Additionally, consideration should be given to when a
condition will have to be met, that is a condition of contract award versus a condition of bid submission. For
example, a certificate of insurance may not be available at the time of submission as it may only be issued on
award of a contract. In this case, a requirement for a certificate of insurability may be more appropriate.
4.35.1 Mandatory Criteria

(2012-07-16)
Contracting officers must ensure that mandatory requirements represent truly essential requirements, since not
even a single mandatory requirement can be later waived when faced with an otherwise good
bid/offer/arrangement. Contracting officers should discuss this with client departments since the bulk of the
mandatory requirements are typically defined by the client department. Mandatory evaluation criteria identify
the minimum requirements that are essential to the successful completion of the work. Contracting officers must
minimize the number of mandatory criteria in order to increase probability of receiving responsive
bids/offers/arrangements. Mandatory criteria must be clearly specified in the solicitation document and may
include:
a. licensing requirements;
b. minimum performance characteristics of equipment;
c. requirements for delivery dates or condition;
d. essential minimum qualifications or experience of proposed personnel;
e. budget limitations.
4.35.5 Rated Criteria

(2010-01-11)
a. Only bids/offers/arrangements that meet the mandatory criteria are subject to point rating, as applicable.
Rated criteria are used to assess various elements of the technical bid/offer/arrangement so that the
relative merits of each bid/offer/arrangement can be used to distinguish one bid/offer/arrangement from
another. The maximum points that can be achieved for each rated criterion must be specified in the
solicitation document.
b. When point rating is used, bids/offers/arrangements may have to achieve a minimum number of points
overall to be considered responsive, and often they must achieve a minimum number of points for
certain individual criteria. Solicitation documents must clearly identify any minimum thresholds and
clearly indicate that such minimums are mandatory. When assigning weights to each criterion, the
contracting officer and the client department should ensure that a high aggregate of points for minor
criteria does not overcompensate for a low aggregate of points for major criteria.
c. When evaluating knowledge and experience is important, contracting officers must specify in the
solicitation documents how knowledge and experience will be assessed. In the case of joint ventures for
example, whose experience will be assessed, i.e. the experience of a joint venture member only or a
pooling of experience of all the members.
4.40 Evaluation Process and Method of Selection

(2013-04-25)
a. The evaluation process and the method of selection such a lowest price, best value, etc., must be clearly
described in the solicitation documents.
b. For detailed guidance on the development of evaluation and selection criteria, consult the Basic Guide
for Bid Evaluation Process (available on GCpedia - Acquisitions Program Policy Suite - Procurement
Process (http://www.gcpedia.gc.ca/wiki/AP_-_Procurement_Process) ).
c. For the basis of selection, contracting officers must use the appropriate SACC Manual clauses; for
example: A0027T, A0031T, A0034T, A0035T, A0036T, A0069T, M0031T, M0034T, M0035T,
M0069T, S1001T, S1002T, etc.
d. The Canadian International Trade Tribunal (CITT) has determined that although suppliers may be aware
of the department's normal practice to award contracts to the lowest-responsive supplier, this does not
relieve it of the obligation to state its method of selection in the solicitation. If the department intends to
rely on a publicly available policy, it must be incorporated into the solicitation.
e. For more information on evaluation procedures, consult Chapter 5 - Evaluation and Selecting the
Contractor.
4.45 Certifications and additional information

(2016-06-09)
A requirement for certifications must be included in all solicitation documents. Suppliers must provide the
required certifications to be awarded a contract or issued a standing offer or supply arrangement. Canada will
declare the bid non-responsive if the required certifications are not completed and submitted as requested.
Compliance with the certifications provided to Canada is subject to verification:
during the evaluation period (before award of a contract, or issuance of a standing offer or supply
arrangement), or
after award of a contract, or issuance of a standing offer or supply arrangement, during the entire period
of the contract, standing offer or supply arrangement.
Non-compliance with certification will or may lead to the termination of a contract.
In some cases, certifications are required as a precedent to contract award or the issuance of a standing offer or
supply arrangement. In other cases, the certifications are required at solicitation closing. Some common
certifications are provided below.
a. Federal Contractors Program for Employment Equity (See 5.5.5 Certifications, declarations and proofs)
i. The Federal Contractors Program (FCP) for employment equity is a program administered by
Employment and Social Development Canada (ESDC) – Labour Program. The FCP is intended to
address employment disadvantages for four designated groups: women, Aboriginal peoples,
persons with disabilities and members of visible minorities. Its goal is to achieve equality so that
no person is denied employment opportunities for reasons unrelated to ability.
ii. Public Works and Government Services Canada (PWGSC) is to request and obtain from the
bidder or offeror, the necessary evidence of compliance with the FCP in its procurement, in order
to comply with the Employment Equity Act.
iii. The FCP requires that bidders subject to the FCP, including a bidder who is a member of a joint
venture, bidding for federal government contracts, certify that they have not been declared non-
compliant with the FCP by ESDC-Labour Program and to make a formal commitment to
implement employment equity. Consult Annex 5.1 Federal Contractors Program for Employment
Equity for more information.
b. Canadian content (See 5.5.5 Certifications, declarations and proofs)
i. When the Canadian Content Policy applies to a requirement, the appropriate SACC Manual
Canadian content certification clause must be included in the solicitation. These clauses describe
the type of solicitation (limited, open or conditionally limited).
ii. SACC Manual clause A3050T, which defines Canadian content, must also be included in the
solicitation. See Chapter 3 Procurement Strategy.
c. Price certification and rate certification (See 5.5.5 Certifications, declarations and proofs)
i. A price certification or a rate certification is required for all negotiated firm-price and fixed-time
rate contracts valued at $50,000 or more, for the acquisition of commercial or non-commercial
goods and/or services.
ii. Price certification clauses:
A. C0001T: acquisition of goods and/or services from foreign-based suppliers;
B. C0002T: acquisition of commercial goods and/or services, other than petroleum products,
from Canadian-based suppliers, other than agency and resale outlets;
C. C0003T: acquisition of non-commercial goods and/or services from Canadian-based

suppliers;
D. C0004T: acquisition of commercial goods and/or services from Canadian agency and resale
outlets, including subsidiaries of foreign-based manufacturers; and
E. C0006T: acquisition of petroleum products.
iii. Rate certification clauses:
A. C0600T: acquisition of commercial goods and/or services from Canadian-based suppliers;

and
B. C0601T: acquisition of non-commercial goods and/or services from Canadian-based

suppliers.
d. Integrity Provisions (See 5.5.5 Certifications, declarations and proofs)
i. Integrity Provisions must be included in all procurement instruments. All competitive solicitations
must include standard instructions 2003, 2006 or 2008 and the applicable general conditions. All
solicitations negotiated on a sole source basis must either include standard instructions 2004 or
2007.
ii. By submitting a bid, an offer or an arrangement, the bidder, offeror or supplier is certifying that:
A. they have read and understand the Ineligibility and Suspension Policy (http://www.tpsgc-
pwgsc.gc.ca/ci-if/politique-policy-eng.html) ;
B. they understand that certain domestic and foreign criminal charges and convictions, and
other circumstances, as described in the Policy, will or may result in a determination of
ineligibility or suspension under the Policy;
C. they are aware that Canada may request additional information, certifications, and
validations from the Bidder or a third party for the purpose of making a determination of
ineligibility or suspension;
D. they have provided with their bid, if applicable, a complete list of all foreign criminal
charges and convictions pertaining to them, their affiliates and their proposed first-tier
subcontractors that, to the best of its knowledge and belief, may be similar to one of the
listed offences in the Policy;
E. none of the domestic criminal offences, and other circumstances, described in the Policy
that will or may result in a determination of ineligibility or suspension, applies to them,
their affiliates and their proposed first- tier subcontractors; and
F. they are not aware of a determination of ineligibility or suspension issued by PWGSC that
applies to them.
iii. Declaration Form: The bidder, offeror or supplier must provide a completed Declaration Form
(http://www.tpsgc-pwgsc.gc.ca/ci-if/declaration-eng.html) with its bid, offer or arrangement only if the
following situations apply:
A. it is unable to certify to the statements in section d.ii. above for itself, its affiliates and its
proposed first tier subcontractors; or
B. it must provide a complete list of all foreign criminal charges and convictions pertaining to
itself, its affiliate and its proposed first tier subcontractor that, to the best of its knowledge
and belief, may be similar to one of the listed offences in the Policy.
iv. See section 4.21 Integrity Provisions for details.
4.45.1 Code of Conduct (Certification)

(2014-03-03)
The content of this section was reviewed and moved to section 4.21 Integrity Provisions. For reference
purposes, section 4.45.1 is available in the Supply Manual Archive
4.50 Financial Security

(2010-01-11)
a. Financial security can be required from a supplier to:
i. protect Canada against loss should a supplier fail to enter into a contract (bid financial security);
ii. ensure that a contractor's obligations under a contract are carried out (contract financial security);
or
iii. protect subcontractors and material suppliers (payment bond).
b. The financial security may be a security deposit (government guaranteed bonds, bills of exchange,
irrevocable standby letters of credit or a surety bond).
c. The decision to obtain financial security for competitive solicitations must be taken before issuing the
solicitation and the solicitation must state clearly what is mandatory.
d. Suppliers have the right to determine which form of financial security they will provide. See SACC
Manual clauses E0004T and E0007C.
e. Government guaranteed bonds will be valued at current value;
f. Treasury Board has an updated list of Appendix L - Acceptable Bonding Companies (http://www.tbs-
sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text#appL) whose bonds may be accepted as security by the
government.
g. For more information on risk management, consult Chapter 3 - Procurement Strategy; for information
on the handling of bid and contract security, consult Chapter 7 Award of Contracts and Issuance of
Standing Offers and Supply Arrangements.
4.50.1 Surety Bond Forms

(2010-01-11)
The surety bond forms are:
a. PWGSC- TPSGC 504 (http://www.tpsgc-pwgsc.gc.ca/app-acq/forms/formulaires-forms-eng.html#f504) , Bid Bond;
b. PWGSC- TPSGC 505 (http://www.tpsgc-pwgsc.gc.ca/app-acq/forms/formulaires-forms-eng.html#f505) , Performance

Bond; and
c. PWGSC- TPSGC 506 (http://www.tpsgc-pwgsc.gc.ca/app-acq/forms/formulaires-forms-eng.html#f506) , Labour and

Material Payment Bond.
4.50.5 Bid Financial Security

(2010-01-11)
a. The decision to obtain bid financial security should take into account the following:
i. the extent of bidder prequalification possibility;
ii. the type of work and custom of the trade;
iii. the likelihood of attempts to withdraw;
iv. the consequences of the failure or inability of the bidder to enter into a contract.
b. The amount of bid financial security must be the minimum required to ensure that the bidder enters into
the contract. SACC Manual clause E0004T must be used in conjunction with E0008T when bid
financial security is required. When clause E0004T is used to require bid financial security and a
contract financial security is required under the resulting contract, it must be used with E0003T,
E0005C and E0008C. When clause E0004T is used to require bid financial security, but no contract
financial security is required, clause E0009T must be used.
c. If the estimated contract value is $250,000 or less, the security should not exceed 10 percent of the bid
price. In the case of larger acquisition values, the contracting officer will determine the percentage.
d. Any letter of credit received by Canada must have an appropriate expiry date. The letter of credit should
not have its expiry date coincide with the projected cessation of the risk that it covers. For instance, the
expiry date stated in the letter of credit should not be the same date as the one projected for the contract
award. The expiry date should allow for a comfortable turn-around time from the estimated date of the
contract award, to ensure that the contracting officer is satisfied that the bidder has discharged its
obligations for which the letter of credit was provided. If the bidder has not met its obligations, the
contracting officer must have sufficient time to prepare and present the required demand for payment
under the letter of credit.
e. To prevent problems in obtaining contract financial security (if required) at a later date, the solicitation
must specify that, if the required contract security is not provided within the period specified, a security
deposit (government guaranteed bonds, bills of exchange, irrevocable standby letters of credit) given as
bid security will be forfeited or payment demands will be made against the bid support letter of credit.
The amount forfeited must not exceed the difference between the bid price and the amount of the
contract entered into by Canada. This provision is also contained in form PWGSC- TPSGC 504
(http://www.tpsgc-pwgsc.gc.ca/app-acq/forms/formulaires-forms-eng.html#f504) .
f. Unless the acceptable form of security is limited to security deposits (government guaranteed bonds,
bills of exchange, irrevocable standby letters of credit), the solicitation must include a list of insurance
companies (Treasury Board Contracting Policy Appendix L - Acceptable Bonding Companies
(http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text#appL) ) whose bonds may be accepted as security
by the government, together with the applicable surety bond form. Deviation from the surety bond form
will be permitted only with the prior approval of Legal Services.
g. For more information on procedures on the handling bid security, consult Annex 5.2: Handling, Custody
and Safekeeping of Financial Security/Handling of Bills of Exchange. The contracting officer must
instruct the specified bid receiving unit of the handling of bid securities received.

(2011-05-16)
a. For the successful supplier, the contracting officer must ensure that bid financial security is not released
until the contractor provides the required contract financial security. The decision to obtain contract
financial security, and the amount of security required, should take into account the following:
i. the type of work and custom of the trade;
ii. the consequences of the failure or inability of the contractor to carry out its contractual
obligations;
iii. costs associated with the provision of security, compared with the degree of risk involved.
b. For construction contracts with an estimated value of $100,000 or more, contract financial security must
be sought.
c. Decisions as to whether and how much financial security will be required should be based on the
circumstances of the individual procurement. Some businesses may encounter difficulty in obtaining
certain kinds of security; therefore, contracting officers should be sensitive to this and not require
unreasonable contract security. In certain cases, perhaps an advance form of security may not be needed;
holdbacks in contract payment may suffice. Treasury Board recommends that financial security not be
considered until the estimated cost of the contract exceeds $100,000. However, issues relating to the
nature of the requirement are usually more important than the dollar value.
d. When the decision to obtain contract financial security has been taken, the contracting officer must
stipulate in the solicitation documents that contract financial security will be required. When the
contractor is required to provide contract financial security after contract award, SACC Manual clause
E0007C must be used in conjunction with E0008C. When the successful supplier must provide a
security deposit as contract financial security, clause E0005C must be used in conjunction with E0008C.

(2010-01-11)
Whenever the controlled goods program applies to a requirement, the following applies:
a. Controlled goods cannot be released to persons that are not registered, exempt or excluded by the
Controlled Goods Program (CGP). For more information on controlled goods, visit the Controlled
Goods Directorate Web site.
b. SACC Manual clause A9130T must be included in solicitations when there is production of or access to
controlled goods.
c. When the solicitation contains controlled goods (for example, a drawing or Statement of Work), only
those controlled goods cannot be released to any persons that are not registered, exempt or excluded
under the CGP. The remainders of the items are processed as usual.
Note: "Not all drawings" or Statements of Work are controlled goods themselves, even if they relate to
controlled goods.
d. Registered Persons are listed on the Controlled Goods Directorate (CGD) Web site. (Note: the
information contained in this list is for information purposes only.) This list is updated daily based on
information provided by registered persons. Canada cannot guarantee the completeness of the
information contained in this list, as some registered persons have asked not to be listed. If a registered
person does not appear in this list, contact CGD at 1-866-368-4646 or by e-mail at dmc-cgd@tpsgc-
pwgsc.gc.ca for further verification. Once the contracting officer has verified that the person requesting
the controlled goods is registered, the solicitation documents, drawings, statements of work, etc.
containing the controlled goods may then be released through adequate means to preclude the
examination of controlled goods by unauthorized persons.
e. An export permit to ship a controlled Technical Data Package (TDP) is required to all countries except,
in most cases, the United States. Contracting officers must first determine if their TDP is, in fact,
controlled. The ultimate authority for making this determination is the Export Controls Division,
Department of Foreign Affairs and International Trade Canada (DFAIT). A determination needs to be
made as to whether or not the supplier has access to controlled goods, in Canada, under the Defence
Production Act.
f. Generally, if the TDP contains technical information for the "development, production or use" of an
item controlled under the DFAIT's Export Control List (most items under Group 2; Item 5504 under
Group 5; and all items under Group 6), then the TDP is also controlled. Refer also to a shorter version,
published by CGD, of the items that are controlled. If the TDP is designed solely for the solicitation of
bids, it is probably not controlled. Contracting officers should contact the Export Controls Division,
DFAIT, at 613-996-2387, for assistance in making this determination.
g. Security precautions for transferring controlled goods will vary, depending on the type and size of the
controlled goods. Safeguards chosen must adequately preclude the examination and unauthorized
transfer of controlled goods by a person who is not registered, exempt or excluded under the CGP and
should be such as to make tampering evident. These include:
i. using double envelopes, security seals and security-sealed containers;
ii. marking transfer containers with a return address;
iii. recording how the controlled good is being transferred;
iv. determining the reliability of a postal or courier service;
v. transferring controlled goods by first class or registered mail, or by a reliable postal or courier
service that offers: proof of mailing, a record while in transit, and a record of delivery;
vi. recording the controlled good being transferred, who is transferring it, and the identity and
address of the person to whom it was transferred; or
vii. upon receipt, examining the packaging and sealing devices, and reporting tampering.
4.60 Transportation Costs

(2010-01-11)
a. For most requirements with an estimated expenditure of $25,000 or more, including Goods and
Services/Harmonized Sales Tax (GST/HST), with known delivery points, bids/offers should be solicited
on the basis of Free On-Board (FOB) destination.
b. For requirements with unknown delivery points, bids/offers should be solicited on the basis of FOB
origin only. See the Glossary " Incoterms (http://www.iccwbo.org/incoterms/id3042/index.html) " .
c. When Incoterms are used, contracting officers must ensure that suppliers understand the differences in
the acronyms used particularly those that use the same letters: FOB in Incoterms means Free On-Board,
not Freight on Board.
d. For more information on transportation costs and the applicable SACC Manual clauses to be used for
good requirements, consult 4.70.100 Transportation Costs Information.
4.65 Exchange Rate Fluctuation Risk Mitigation

(2017-08-17)
a. The exchange rate risk on the purchase of materials, components or products from outside Canada is
generally considered a normal business risk for suppliers. However, in some cases, it may be in the
interest of Canada to accept the risks and benefits of currency fluctuations. In such circumstances, the
bidder may be offered the choice to mitigate their risk by having an exchange rate fluctuation provision
included in the contract.
b. When determining if an exchange rate fluctuation provision will be included, contracting officers may
consider such factors as: the likelihood that currency fluctuations will reduce the number of bidders; the
duration and value of the contract; previous concerns of suppliers; potential impact on prices, and the
willingness and/or ability of the client department to accept such provision.
c. An exchange rate fluctuation provision would not generally be applied to procurements done by the
European and Washington regions, or procurements on the behalf of the Canadian Commercial
Corporation. This provision should also not be used with telephone buys nor with cost reimbursable
contracts (or cost reimbursable items of a contract).
d. The solicitation must indicate if an exchange rate fluctuation provision is included as a choice for the
bidder, and explain clearly how such provision will be applied. The solicitation must indicate the
method for determining the initial exchange rate. For example the initial exchange rate is the Bank of
Canada rate published on the solicitation closing date. The Bank of Canada publishes its rates each
business day by 16:30 Eastern Time (ET).
e. The solicitation must also indicate the date to be used in determining the exchange rate for adjustment
purposes. This will be the rate published by the Bank of Canada on such a date, by 16:30 ET. It is often
preferable to use the delivery date as the exchange rate for adjustment purposes. Contracting officers
may also choose to use the direct shipment date, as indicated on the Canada Customs Coding Form
(http://www.cbsa-asfc.gc.ca/publications/forms-formulaires/b3-3-eng.html) , CBSA Form B3-3, or some other date.
Contracting officers must always ensure that the solicitation (and contract) clearly specifies the method
for determining the date for the exchange rate for adjustment. Where a modification to a clause is
required, contracting officers are encouraged to work with the Procurement Process Tools Division
(outilsapprov.proctools@tpsgc-pwgsc.gc.ca) and legal services to modify the appropriate Standard
Acquisition Clauses and Conditions (SACC) Manual clause. Generally, bids must be submitted in
Canadian currency.
f. Exchange rate fluctuation provisions must be identified in procurement plans, contract requests, and
Contract Planning and Advance Approvals (CPAA), since it is part of the basis of payment and may
impact the total contract costs. The client should be informed of and agree with the decision to use this
provision in the solicitation and the contract. The client should provide a buffer in the commitment, or
alternatively, be aware that a supplemental section 32 certification of the Financial Administration Act
may become necessary in order for the payment to be made. The client project authority may need to
inform the department financial authority of a potential impact to the commitment. Approval of the
procurement/contract does not need to be sought again due to any increases in the total contract value
resulting from exchange rate fluctuation that may occur.
g. To have the exchange rate fluctuation provision apply, bidders must identify this choice as per the
instructions in subsection j. The FCC is defined as the portion of the price or rate that will be directly
affected by exchange rate fluctuation. The FCC should include all related taxes, duties and other costs
paid by the supplier and which are to be included in the adjustment amount.
h. When bidders are offered the choice to mitigate their risk against the exchange rate fluctuation, SACC
Manual clause C3010T must be incorporated by reference in the solicitation, and clause C3015C, which
may be used for various methods of payment such as milestone and cost incurred progress payments,
must be used in the resulting contract clauses.
i. Whenever exchange rate fluctuation is not expected to be an issue, and therefore it is not proposed to
offer mitigation against it, the SACC Manual clause C3011T must be included in the solicitation to
clearly indicate to bidders that a request for exchange rate adjustment will not be considered and that
inclusion of such request in the bid will render the bid non-responsive.
j. To have the exchange rate fluctuation provision apply, the bidders must identify this choice and clearly
indicate the applicable FCC, generally in Canadian dollars, and the applicable foreign currency for each
line item in the financial proposal for which the adjustment will be applied. Bidders may indicate this
using form PWGSC-TPSGC 450 Claim for Exchange Rate Adjustments (http://www.tpsgc-pwgsc.gc.ca/app-
acq/forms/formulaires-forms-eng.html#f2) . The FCC amount will then be used in the calculation of the
adjustment amount when invoiced and paid.
k. The exchange rate adjustment amount will be calculated by the successful bidder using the following
formula:
Exchange Rate Adjustment = FCC x Qty x ( i1 - i0 ) / i0
where formula variables correspond to:
FCC
Foreign Currency Component (per unit)
Qty
quantity of units
i0
initial exchange rate (CAN$ per unit of foreign currency [for example US$1])
i1
exchange rate for adjustment (CAN$ per unit of foreign currency [for example US$1])
This calculation may be done for each line item and the sum of adjustments shown as a single line item
on the invoice.
l. Example: In a solicitation for 100 "regular chairs", the successful bidder bid CAN$200 per chair and
specified an FCC for each chair of CAN$100 (50%) representing the initial value of materials from the
US, including all applicable customs, taxes and exchange rate costs which are impacted by the exchange
rate. The solicitation specified that the initial rate is based on the bid closing date and that the rate for
adjustment is based on the delivery date. The bid closed on March 1, and on that day, the exchange rate
was 1.0000 CAN$ per US dollar. On May 1, when the chairs were delivered, the exchange rate changed
significantly to 1.1500 CAN$/US$.
Calculation:
Exchange Rate Adjustment
= (FCC per unit) x Qty x ( i1 - i0 ) / i0
= $100 x 100 x (1.1500 CAN$/US$ – 1.0000 CAN$/US$) / 1.0000 CAN$/US$
= $1,500
Figure 1: Sample invoice including exchange rate adjustment
Unit price Value

Description of unit Qty
(CAN$) (CAN$)
Regular chair 100 $200 $20,000
Exchange rate adjustment (on regular chairs, US$ exchange rate 100 $15 $1,500
for March 1, 2013 to May 1, 2013)
Subtotal: $21,500
Alternatively, had the new rate been 0.8900 CAN$/US$, then the exchange rate adjustment would be:
$1,235.96 representing a reduction in the price paid by Canada.
Note: Suppliers should submit a separate calculation sheet for each invoice submitted showing the
exchange rate adjustment for all line items with an FCC.
m. The exchange rate adjustment will only be applied when the exchange rate fluctuation is greater than
2% (increase or decrease), i.e. abs[(i1 – i0) / i0] > .02, where "abs" represents the absolute value.
n. The choice by a bidder to mitigate their risk against the exchange rate fluctuation will not have an
impact on the evaluated price. The exchange rate adjustment is applied at the time of payment.
o. The client payment office is responsible for ensuring that the adjustment is in accordance with the
contract provisions.
p. Contracting officers must ensure that the initial exchange rate, the FCC for each item, and the associated
foreign currency for each FCC is clearly indicated with the prices in the contract to facilitate the
payment process.
q. Contracting officers must also ensure that the basis of payment clause specifies:
"The price paid will be adjusted in accordance with the exchange rate fluctuation provision (as
applicable)."
Note: The words "as applicable" are used, since it is the bidder's choice to include an exchange rate
fluctuation provision and the exchange rate fluctuation must be greater than 2% (increase or decrease).
r. Invoicing: The supplier must indicate the exchange rate adjustment amount (either upward, downward
or present no change) as a separate item on each invoice or claim for payment submitted under the
contract. This must be shown even when there is no adjustment claim due to the change in the rate being
below the threshold.
s. The total estimated cost of the contract must be amended upward, where needed, to address changes due
to the exchange rate fluctuation. The final contract amendment should amend the contract price upward
or downward, as needed, to reflect the actual price paid.
4.70 Conditions of the Resulting Contract

(2010-01-11)
4.70.5 General Conditions

(2010-01-11)
a. Standard Acquisition Clauses and Conditions (SACC) Manual general conditions describe the rights
and obligations of both the government and the contractors in various types of contractual situations.
Contracting officers must determine which general conditions apply to a specific requirement. Only one
set of general conditions is to be used for a requirement. Additional conditions, not addressed in the
chosen general conditions, may be added to the procurement document; however, contracting officers
must ensure that there are no contradictions, inconsistencies and redundancies in the clauses contained
in the template, the standard instructions and the general conditions. Legal Services should be consulted
for any additional conditions.
b. The general conditions are incorporated by reference in the procurement document. The remarks
contained in the general conditions provide instructions on their application.
c. For more information on the general conditions and their use, consult Annex 4.1: General Conditions
and Supplemental General Conditions.
4.70.5.1 Warranty
(2010-01-11)
a. In a contract for the sale of goods, any affirmation of fact or any promise by the supplier relating to the
goods is an express warranty. The warranty provisions in the general conditions do not negate or limit in
any way the operation of other relevant warranties that are, as a general rule, implied or imposed by law.
b. Examples of relevant warranties that are implied by law are:
i. the fitness of the goods for the purpose intended; or
ii. the merchantable quality of the goods.
c. These warranties are implied in most contracts for the sale of goods through the International Sale of
Goods Contracts Convention Act, a version of which exists in all Canadian provinces and territories
except Quebec. In Quebec, the warranty under the Civil Code is a warranty of ownership and of quality,
which includes latent defects.
d. The contracting officer may negotiate an increase to the warranty time period in a contract, subject to
client department agreement to the proposed time period and related cost. This change in warranty time
period should be addressed in the contract approval document.
e. Any requests for lessening Canada's full rights at law, a disclaimer, limitation of the contractor's
liability, or decrease of the warranty time period, must be reviewed by Legal Services, be acceptable to
the client department, and form part of the contract approval document.
f. It may be necessary to consider obtaining a broader warranty than that contemplated by the warranty
provision appearing in the SACC Manual general conditions to cover "symptomatic defects" or
"epidemic failures."
g. These are cases where the same or similar defects have developed in several identical items of finished
work, or components, and it is reasonable to assume that the same defects will be found in the total
quantity of such items, which have already been delivered, or will be delivered.
h. Where this type of warranty is requested by the client department, or considered desirable by PWGSC,
the contracting officer, in consultation with the client department, must determine the extent and nature
of the warranty required, and request Legal Services to prepare a suitable provision to cover the
requirement. In the case of negotiated firm price contracts, the contracting officer must obtain the client
department's agreement to the estimated cost of this warranty.
i. The general conditions provide that contractors must carry out warranty work at their own expense. The
following interpretations apply:
i. in the case of firm price contracts awarded as a result of a competitive solicitation, where the
procurement process precludes any adjustment to the price quoted, costs incurred as a
consequence of warranty consideration must be the responsibility of the contractor;
ii. in the case of negotiated firm price contracts, where contingency for warranty work becomes a
factor for consideration during the price negotiations, the amount included in the firm price must
be kept to reasonable levels, and must be specifically approved. Supporting details must be part of
the cost summary presented in the contract approval document;
iii. in the case of negotiated firm price contracts governed by the Defence Production Act, the
contractor must certify that the price is based on costs computed in accordance with Contract Cost
Principles 1031-2, which do not permit any increase in reserves for guaranteed work. Therefore,
costs for work and/or expenses in order to provide for product correction/adjustment/replacement
under warranty requirements, are not to be included in the contract price since provision for these
expenses has already been included in the certified price;
iv. in cost reimbursable contracts, the contractor is not allowed to charge any contingency for
warranty as an element of cost. If the contractor is required to make good under the warranty
provisions, the contracting officer may allow recovery of the reasonable cost incurred for direct
labour and direct material only. There is to be no allowance for overhead or profit;
v. if the contracting officer is of the opinion that reasonable warranty costs may be allowed, then an
appropriate clause approved by Legal Services must be inserted in the contract to authorize such
costs. The contract should contain a line item providing for the allowance of costs, with or
without a maximum estimated expenditure.
4.70.10 Supplemental General Conditions

(2010-01-11)
a. Contracting officers must determine which SACC Manual supplemental general conditions apply to a
specific requirement. The supplemental general conditions must be used in conjunction with one set of
SACC Manual general conditions. Their purpose is to expand upon and clarify specific points within the
context of an identified subject area.
b. The supplemental general conditions are incorporated by reference in the procurement document. The
remarks contained in each set of the supplemental general conditions provide instructions on their
application.
c. For more information on the use of supplemental general conditions, consult Annex 4.1: General
Conditions and Supplemental General Conditions and the SACC Manual.
4.70.15 Term of the Contract and Options

(2010-01-11)
The period of the contract or the delivery date must be indicated, as applicable. SACC Manual clause A9022C
may be used in contracts for services. If the contract contains option periods, use in conjunction with A9009C.
4.70.20 Basis of payment

(2017-08-17)
a. The following are the bases of payment that may be used, in descending order of preference, these are:
i. firm price;
ii. firm price subject to economic price adjustment;
iii. fixed time rate;
iv. cost reimbursable with incentive fee;
v. cost reimbursable with fixed fee;
vi. cost reimbursable with fee based on actual costs;
vii. cost reimbursable with no fee.
b. The basis of payment should reflect the commodity, the duration of the contract, and how adequately the
requirement was defined. Multiple bases of payment may be used in one contract.
c. A contract or part of a contract with a fixed time rate or a cost reimbursable basis of payment must
include either a ceiling price or a limitation of expenditure.
4.70.20.1 Firm Price

(2010-01-11)
a. This provides for a price, which is not subject to adjustment for performance of the contract or part of it.
It gives maximum profit incentive to the contractor for cost control in that the contractor assumes full
responsibility for all costs under or over the firm price. In addition, it places a minimum administrative
burden on both contracting parties. See SACC Manual clause C0207C.
b. Use this basis of payment when buying commercially available goods or readily quantifiable services
when:
i. the contractor has previously manufactured the particular good or provided the particular service,
or similar goods or services, and has sufficient experience to permit a realistic statement of work
based on firm specifications;
ii. the statement of work can have a cost applied to it in terms of quantities of material and labour
time required; and
iii. a realistic estimate of the material prices and labour and overhead rates applicable during the
contract period can be made.
c. Subsequent to the negotiation of a firm price basis of payment for a non-competitive requirement, the
contractor must resubmit the price bid based on the agreement reached.
d. A discretionary audit clause may be included in the contract, as appropriate, subject to the receipt of a
price certification in accordance with SACC Manual clauses C0002T or C0004T or C0006T.
4.70.20.5 Economic Price Adjustments in Firm Price Contracts

(2017-09-21)
a. It may not be possible to obtain a realistic estimate of the material prices and/or labour and overhead
rates required for the use of a firm price basis of payment, and it may be necessary to negotiate
provisions for price adjustments. These provisions provide for revisions to the firm base price upon the
occurrence of certain contingencies.
b. Under changing market conditions, one or more elements of the cost of a good or service may be subject
to significant fluctuations in price, so that neither the buyer nor the supplier would have confidence in
accepting a fixed or firm price over an extended period of time. The purpose of including an economic
price adjustment (EPA) and/or a foreign currency adjustment (FCA) in the contract is to eliminate these
risks for the contractor, as they are outside of the contractor's control. Contracting officers must identify
in their approval documents (including any approval documents subject to Treasury Board approval)
any provisions for EPA and/or FCA.
c. Economic price adjustments should not normally be included in contracts with delivery schedules of
less than 12 months, or contracts valued under $100,000.
d. There are a number of possible actions:
i. postpone the procurement;
ii. use available substitute products;
iii. provide advance information on requirements to potential contractors, to benefit from their
improved ability to control costs by forward planning, and to make full use of the commodity
futures markets in appropriate circumstances;
iv. reduce the period of term contracts or the quantities ordered on production contracts;
v. increase production rates to compress the duration of contracts;
vi. reduce administrative time allowances in the procurement process (solicitation, award decision,
award of contract and authority to commence work), but taking into account required time frames
under the North American Free Trade Agreement, Canada-European Union Comprehensive
Economic and Trade Agreement and the World Trade Organization Agreement on Government
Procurement;
vii. procure the unstable element separately in the construction industry. This technique is known as
pre-bidding;
viii. isolate the unstable element in pricing the work and providing for price adjustment, both upward
and downward, on it alone, in accordance with a reliable predetermined formula such as an
established economic index.
e. When a competitive bidding process is used, the proposed economic price adjustment provisions must
be considered in the evaluation of the bid. In all other situations, economic price adjustment provisions
must be agreed upon during negotiation of the initial or base year contract price.
f. When a provision for future wage or price adjustments on one or more elements of the cost of a good or
service, is necessary to protect the contractor and the government against significant economic
fluctuations, economic price adjustment provisions may be used in firm price type contracts and in
contracts that contain firm price elements within the basis of payment.
g. Adjustments to firm prices in a contract will be allowed only if provided for in the contract.
4.70.20.10 Fixed time rate

(2017-08-17)
a. This basis of payment provides for the payment to the contractor for the actual amount of time spent in
performance of the work. The actual amount of time spent in performance of the work may be subject to
government audit. The amount paid for these hours is calculated based on a predetermined fixed time
rate. The fixed time rate usually includes direct labour rates, overhead rate and profit. Refer to the
SACC Manual clauses C0212C and C0214C.
b. Use this basis of payment when:
i. it is not possible to estimate in advance the extent or duration of the work, but it is possible to
determine within reasonable limits the applicable direct labour and overhead rates during the
contract period; and
ii. there is provision for adequate controls to ensure that the contractor is not using inefficient or
wasteful methods.
c. For a contract or part of a contract with a fixed time rate basis of payment, which include a ceiling price,
the contractor must complete the prescribed work without additional payment, whether or not the actual
costs exceed the ceiling price. When a ceiling price is used, there must be full agreement between the
parties as to what constitutes the prescribed work. SACC Manual clause C6000C must be used in a
ceiling price contract where it is necessary to ensure against the contractor making changes or carrying
out additional work without the prior approval of the contracting officer.
d. When a contract or part of a contract with a fixed time rate basis of payment does not include a ceiling
price, SACC Manual clause C6001C - Limitation of expenditure must be included in the contract. A
limitation of expenditure is the maximum amount the contractor may be paid for the prescribed work.
The limitation of expenditure is normally used when the level of effort cannot be accurately estimated at
the outset. At the client’s request, the contracting authority will amend the contract to provide additional
funds, or request the contractor to complete the work to the extent that the original funding permits.
e. Following the negotiation of fixed time rates, the contractor must resubmit the price bid based on the
agreement reached and include a rate certification.
f. Time verifications, rate certifications and discretionary audits must be provided for in contracts.
4.70.20.15 Cost reimbursable with incentive fee

(2017-08-17)
a. This basis of payment provides for the reimbursement to the contractor of costs incurred in performance
of the work, as determined by government audit, and adds a fee which is adjusted by formula in
accordance with the relationship that total allowable actual costs bear to a predetermined target.
b. Use this basis of payment when the criteria required for a firm price basis of payment are lacking and
the goods and services being acquired are of a nature that the assumption by the contractor of a degree
of cost responsibility is likely to provide a positive incentive for effective cost control and contract
performance.
c. When a cost reimbursable with incentive fee basis of payment is used, it is necessary to negotiate in
advance a target, a target fee, a maximum fee and a formula for fee adjustment.
d. The target should be the estimated costs of performing the work, computed in accordance with Contract
Cost Principles 1031-2, assuming the contractor's current efficiency trend is maintained.
e. The target fee, based on the target cost, and the maximum fee should be an amount no greater than that
calculated in accordance with the procedures for profit determination.
f. The formula provides for both an increase in fee above the target fee, up to the maximum fee, based on
a sharing between the contractor and Canada of any decrease in actual acceptable costs below the target,
and a decrease in the fee below the target fee, based on a sharing between the contractor and Canada of
any increase in actual acceptable costs above target.
g. A contract or part of a contract with this basis of payment should not include a ceiling price, which
requires agreement between the parties as to what constitutes the prescribed work, since this conflicts
with the reason why this basis of payment is being used in the first place, that is, the fact that a realistic
statement of work cannot be submitted by the contractor.
h. In a contract or part of a contract with this basis of payment, which does not include a ceiling price,
SACC Manual clause C6001C - Limitation of expenditure must be included in the contract.
4.70.20.20 Cost reimbursable with fixed fee

(2017-08-17)
government audit. The amount paid for these hours is calculated based on a predetermined fixed fee.
Although the fixed fee does not vary with actual costs incurred, it may be renegotiated under certain
circumstances. Refer to SACC Manual clause C0202C.
b. Use this basis of payment when circumstances do not permit the use of a firm price or fixed time rate,
and the possible savings from the use of an incentive fee are likely to be more than offset by the
complexities of contract administration resulting from its use.
c. The amount of the fixed fee, based on an estimate of the costs to be incurred, should be no greater than
the appropriate amount of profit. If it is not possible for both parties to reach agreement on an estimate
of the costs to be incurred, as a basis for calculating the fixed fee, swing points are used. Swing points
are the amounts of estimated costs, one higher and one lower than the amount used for the calculation of
the fixed fee, at which the fixed fee will be renegotiated.
d. In a contract or part of a contract with this basis of payment, which include a ceiling price, the
contractor must complete the prescribed work without additional payment, whether or not actual costs
exceed the ceiling price.
When a ceiling price is used, there must be full agreement between the parties as to what constitutes the
prescribed work. SACC Manual clause C6000C must be used in a ceiling price contract where it is
necessary to ensure against the contractor making changes or carrying out additional work without the
prior approval of the contracting officer. If it is possible to determine the prescribed work and for the
parties to agree on an estimated amount to complete it as a basis for the ceiling price, it may be
appropriate to use another basis of payment, that is, one which provides for a more equitable sharing of
responsibilities and risks between the contractor and Canada.
e. In a contract or part of a contract with this basis of payment, which does not include a ceiling price,
SACC Manual clause C6001C - Limitation of expenditure must be included in the contract.
4.70.20.25 Cost reimbursable with fee based on actual costs

(2017-08-17)
government audit. The amount paid for these hours is calculated based on actual costs incurred. Refer to
SACC Manual clause C0205C.
b. Use this basis of payment only when circumstances permit the use of no other basis of payment.
c. The amount of fee, based on the actual costs incurred, as determined by government audit, will be no
greater than the appropriate level of profit.
d. Ceiling prices are not applicable when this basis of payment is used.
e. In a contract or part of a contract with this basis of payment, SACC Manual clause C6001C - Limitation
of expenditure must be included in the contract.
4.70.20.30 Cost reimbursable with no fee

(2017-08-17)
a. This basis of payment provides only for the reimbursement to the contractor of actual costs incurred, as
determined by government audit. Refer to SACC Manual clause C0201C.
b. Except for contracts covering the provision of assistance to a contractor, this basis of payment is rarely
used. Contractors cannot normally be expected to accept a contract, which provides for no profit for the
manufacture of goods or the provision of services.
c. A contract or part of a contract with this basis of payment should not include a ceiling price, which
requires agreement between the parties as to what constitutes the prescribed work, since this conflicts
with the reason why this basis of payment is being used in the first place, that is, the fact that a realistic
statement of work cannot be submitted by the contractor.
d. In a contract or part of a contract with this basis of payment, which does not include a ceiling price,
SACC Manual clause C6001C - limitation of expenditure must be included in the contract.
4.70.20.35 Cost Reimbursable Contracts - Audit

(2010-01-11)
a. Cost reimbursable contracts or contracts with cost reimbursable elements require special attention
because the price is not specified in the contract, but rather is determined after the completion of the
work. All cost reimbursable contracts must include a clause indicating that the costs incurred will be
subject to audit by PWGSC. See SACC Manual clause C0205C.
b. For all cost reimbursable contracts valued at $50,000 or more awarded to Canadian suppliers, the
contracting officer must, on completion of the work, place on file a certification that the final amount
paid represents a reasonable price.
c. This certification may be based on the findings of a formal or an informal audit. This audit provides the
basis for certification that the price is reasonable.
d. All contracts containing cost reimbursable elements must include an appropriate basis of payment
clause (see clauses C0201C, C0202C, C0203C and C0205C.)
e. All cost reimbursable contracts must also include clause C0300C, which calls upon the contractor to
provide a cost submission to the contracting officer upon completion of the contract or annually for
multi-year contracts spanning more than one contractor fiscal year.
f. The requirement for a cost submission will be listed as a mandatory deliverable item within the contract.
However, for repair and overhaul (R&O) service contracts, the contracting officer or audit agency may
determine whether a cost submission is needed as a deliverable item. The clause C0307C pertaining to
R&O service contracts must be used.
4.70.20.40 Cost and Profit

(2010-01-11)
Whenever a contract is to be awarded on a non-competitive basis, or when, following a competitive process,

price negotiations with the successful supplier are required, contracting officers must consult Chapter 10 Cost
and Profit.
4.70.20.45 Withholding of 15 percent on Service Contracts with Non-residents

(2010-01-11)
a. The Income Tax Act and the Income Tax Regulations require client departments, on whose behalf a
contract for services rendered in Canada has been awarded by PWGSC to a non-resident contractor, to
withhold 15 percent from the payment of fees, commissions or other amounts paid to non-resident
individuals, partnerships or corporations, other than for services performed in the course of
employment. Client departments are responsible for: withholding 15 percent of any amounts payable, in
lieu of taxes; remittance of this amount to CRA; and reporting the amounts paid, and withheld, to CRA.
The SACC Manual general conditions include a provision regarding the withholding of 15 percent from
the payment. A waiver or a reduction of the withholding may be obtainable as detailed in paragraph (e)
below.
Withholding of the 15 percent of the payment does not represent a definite tax, but rather a payment on
account of the non-resident contractor's overall tax liability to Canada.
b. Payments for duties of employment performed in Canada, made to non-resident individuals, are not
subject to the 15 percent withholding, but are subject to tax deductions on a basis similar to that
applicable to residents.
c. Withholding pursuant to subsection 105(1) of the Income Tax Regulations does not apply to travel
expenses as detailed in the following:
Reasonable travel expenses
24. The CRA provides an administrative exception from withholding for reasonable travel
expenses. Travel expenses reimbursed to the non-resident for meals to a maximum of CAN$45 a
day per person and accommodation to a maximum of CAN$100 a day per person will not be
subject to Regulation 105 withholding and will not require vouchers to be retained by the payer.
25. Reasonable travel expenses, in excess of the above amounts, supported by vouchers retained
by the payer and either paid directly to third parties on behalf of a non-resident, or reimbursed to
a non-resident will also not be subject to Regulation 105 withholding.
26. Such travel expenses are limited to those expenses incurred for transportation,
accommodation, or meals. These amounts have to be reported on a T4A-NR information slip
(see 41-42) as travel expenses, but are not to be included in gross income on this information
slip. Canada Revenue Agency
Income Tax Information Circular IC75-6R2 (http://www.cra-arc.gc.ca/E/pub/tp/ic75-6r2/ic75-6r2-e.html)
d. When a contract provides for services to be performed in more than one country, including Canada, an
allocation of the contract price is required. Only the portion of the payment attributable to services
performed in Canada will be subject to a withholding of 15 percent. (Client departments should consult
sections 32-34 of Income Tax Information Circular IC75-6R2 (http://www.cra-arc.gc.ca/E/pub/tp/ic75-6r2/ic75-
6r2-e.html) .)
e. Although most tax treaties between Canada and other countries provide for some relief from Canadian
tax, Canada does not normally relinquish its right to withhold tax pursuant to the provisions of
section 153 of the Income Tax Act and subsection 105(1) of the Income Tax Regulations. If the non-
resident contractor can adequately demonstrate, based on treaty protection, that the withholding
normally required is in excess of the ultimate tax liability, or that the withholding creates undue
hardship to the contractor, then the CRA may issue permission to the payer authorizing a reduction of
the subsection 105(1) withholdings. The procedure to apply for a reduction of withholding is detailed in
Income Tax Information Circular IC75-6R2 (http://www.cra-arc.gc.ca/E/pub/tp/ic75-6r2/ic75-6r2-e.html)
Appendices A and B, as well as in CRA's T4061, Non resident Tax Withholding, Remitting, and
Reporting 2-8 (http://www.cra-arc.gc.ca/E/pub/tg/t4061/t4061-e.html) . Requests for a waiver or a reduction of the
withholding will not be entertained unless deductions at source are remitted to CRA.
f. If asked for information on the withholding, contracting officers may refer client departments and
suppliers to CRA's Income Tax Information Circular IC75-6R2 (http://www.cra-arc.gc.ca/E/pub/tp/ic75-6r2/ic75-
6r2-e.html) or CRA's helpline (http://www.cra-arc.gc.ca/cntct/international-eng.html) .
4.70.20.50 Types of price adjustments

(2017-11-28)
a. The price adjustment formula must provide for both upward and downward revision of the firm base
price, and include a ceiling price or limitation of expenditure. It must identify, if applicable, the
economic wage or price index to be used, the firm price element, and the base period for which
adjustments are to be made.
b. The calculation of any adjustment formula should remain consistent with the cost/price accounting
treatment used to arrive at the firm base price. This will ensure accuracy in measuring the amount of
variation from the firm base price.
c. The various economic price adjustment clauses are in subsection 5-C of the SACC Manual. The price
adjustment method used should be the simplest, most suitable adjustment formula to provide the
protection necessary to both parties with the least administrative effort. The requirements of materiality
and practicality must be met.
The advice of a cost analyst is appropriate in the development of any significant or major economic
price adjustment provisions, or for the implementation of an economic price adjustment provision
through the use of an accounting type formula, in accordance with the Guideline on the Use of Cost and
Price Analysis Services

(http://www.gcpedia.gc.ca/gcwiki/images/d/dd/Guideline_on_the_Use_of_Cost_and_Profit_Analysis_FINAL_EN.pdf) (PDF).
d. Adjustment provisions to prices for commercial goods and services should be based on increases or
decreases from an agreed upon posted reference or firm base price. If the original contract or firm base
price includes a discount factor, from the initial or then current established catalogue price, the same
discount factor should be applied to the adjusted price, unless otherwise stated in the contract.
e. Statistics Canada publishes a variety of reports, providing changes in price indices, material and labour
costs. The Department of Labour performs this function in the United States. Private sector surveys may
also be used.
f. Adjustments to actual rates for labour or actual costs for material are based on the increases or decreases
in firm base price elements experienced by the contractor.
g. The use of this adjustment method is limited to contingencies beyond the contractor's control, and where
the contractor's accounting system permits timely compilation of all necessary cost data relative to the
economic price adjustment during contract performance.
h. A company's union agreement with its employees may be considered an acceptable economic labour
rate index for that company, provided that it reflects comparable labour rate movements within that
industrial sector.
4.70.25 Contract Performance Incentives

(2010-01-11)
a. Contract performance means the fulfillment or accomplishment of the work that is required under the
contract.
b. When required, the contract may contain various mechanisms for encouraging timely performance, such
as:
i. Contract financial security:
A. security deposits, whereby the contractor deposits securities (government guaranteed bonds,
bill of exchanges or irrevocable standby letters of credit), which PWGSC may convert to
complete the contractor's obligation; or
B. performance bonds, which are a type of surety bond used to guarantee the performance of
the contract.
ii. Holdbacks, whereby an amount is withheld to ensure the due performance of the contract.
The normal arrangements for holdbacks will be incorporated by including the SACC Manual
clause H1003C in the contracts.
iii. Liquidated damages clause, whereby provision is made for Canada to recover the pre-estimated
loss or rate of loss that would result from a delivery default, without being required to prove
actual damages.
c. Where the inclusion of a liquidated damages clause is appropriate, the contracting officer must
incorporate such provisions by including the SACC Manual clause D0024C in the contract.
d. Care should be taken to ensure that the rate of assessment of liquidated damages is reasonable. The
probable damages should be established by reference to the individual circumstances of the particular
procurement. The contract should specify the ceilings for collection of liquidated damages. Such
ceilings or maximums can be stated in either of the following two ways:
i. by specifying a fixed amount payable upon delinquency. This method should be used when it is
intended that the contract will be terminated immediately when delinquency occurs and the goods
or services "reprocured" elsewhere. The cost of "reprocurement" must be included in the overall
fixed amount; or
ii. by specifying a rate of assessment of damages. This rate per calendar day of delay must not
exceed a stated percent of the contract price. This method should be used when, upon default
occurring, it is intended to serve notice of default requiring the contractor to remedy the default
within a stated period of time. The cost of "reprocurement" must be excluded in computing
liquidated damages, since this item will be claimable separately in the event that the contract is
terminated and the goods or services procured elsewhere.
e. To ensure uniformity of application, the amount or overall ceiling should not exceed 10 percent of the
contract price. Ceiling prices in excess of 10 percent may be used when justified by the individual
circumstances of the particular acquisition, subject to the approval of the contract approval authority.
f. Incentive payments, whereby provision is made in the pricing basis for increased value to Canada.
g. Such incentives (e.g., for early delivery cost savings, enhanced performance or additional warranty or
other benefits) should be considered only in the case of major procurements with long lead times for
delivery, where such payment provisions can act as an incentive to the contractor in putting forth special
efforts to achieve earlier than scheduled delivery, and the client department agrees because of substantial
realizable cost savings and other benefits.
4.70.30 Method of Payment

(2010-01-11)
The method of payment is the way Canada will pay for work performed or goods delivered, such as all arrears
(preferred), in advance, as a lot delivery or as each item are delivered. Different types of methods of payment
are described below:
4.70.30.1 Standard Payment Period and Interest on Overdue Account

(2010-01-11)
Canada pays for work performed or goods received under a contract in accordance with Canada's standard
payment period of 30 days as provided in the general conditions. The general conditions also reflect Canada's
policy to automatically pay interest to contractors when an account is overdue and Canada is responsible for the
delay. When dealing with federally or provincially regulated public utility companies, the conditions for
payment of interest must conform to those approved by the appropriate regulatory bodies. The provisions for
payment of interest on overdue accounts set out in the general conditions must be strictly adhered to, except in
special cases where the client department requisition specifies a payment period longer than 30 days; for
example, when extensive product evaluation, inspection or testing requirements are involved. In such cases, the
general conditions may be modified subject to consultation Legal Services.
4.70.30.5 Determination of the Method of Payment

(2010-01-11)
The most appropriate method of payment must be determined based on the particular procurement. Some of the
factors for consideration are the following:
a. Risk exposure for Canada, if situations such as insolvency, work cancellation or work default occurs.
Pertinent factors include:
i. Can securing unconditional guarantees protect an advance payment or performance bonds from
financial institutions or from associated or parent companies with good financial credentials?
ii. What is the likely marketability and resale value of work-in-process to which Canada acquires
title by virtue of making progress payments? The disparity between the amount of progress
payments and the resale value of inventory is a measure of the risk exposure for Canada.
b. Financing Cost Estimates: Since provision for progress payments or advance payments involves a real
or imputed cost to Canada, this cost should be calculated for each of the available options. Apply the
chartered bank prime lending rate, as advised periodically by the Director, Cost and Forensic
Accounting Directorate, to the cumulative net financing (that is, cumulative cash payout by Canada
minus cumulative value of deliveries under the contract), using reasonable assumptions regarding work
progress and item deliveries.
c. The potential reduction in contract price resulting from the various methods of payment.
d. Since progress payments or advance payments reduce the need for borrowing by the contractor, or
reduce the size of equity capital on which a return must be realized, lower prices should flow through to
Canada. The price reduction will vary with the different methods of payment and their relative
attractiveness to the contractor.
e. Financial circumstances that may affect the ability of the client department to finance the various
options.
4.70.30.10 Types of Method of Payment

(2010-01-11)
a. There are a number of ways payment may be carried out. Payment for the work performed or goods
delivered may be made as a single payment, multiple payments or progress payments.
i. Single payment: When a single payment will be made upon completion of all work and deliveries,
Standard Acquisition Clauses and Conditions (SACC) Manual clause H1000C may be used for
contracts for goods and services (except construction and utility contracts).
ii. Multiple payments: When there are multiple deliveries and payments will be made on completion
of each delivery, SACC Manual clause H1001C may be used in contracts for goods (except
construction and utility contracts).
iii. Progress Payments and Advance Payments: In all cases, a payment cannot be made in the current
fiscal year for a contract that will not start until the next fiscal year. The requirement that payment
be made only for goods or services received in the same fiscal year may require modification of
the method of payment for requirements whose period of delivery or service spans fiscal years.
Specifically, it may be necessary to provide for multiple payments, at the appropriate point in the
contract period.
b. Progress payments or advance payments may be considered only if all of the following conditions are
met:
i. adequate security for the payment is ensured;
ii. Canada receives value commensurate with the amount of the payment;
iii. the client department has adequate funds to provide the financing; and
iv. one of the following circumstances exists:
A. There is economic advantage to Canada that clearly outweighs the financing cost associated
with the progress payment or advance payment.
B. The contractor could suffer hardship or provide financing only with difficulty or at rates
considered to be uneconomical in relation to prevailing chartered bank prime lending rates.
C. The value of the contract is considered to be beyond the assessed financial capabilities of
the contractor.
D. There is to be a long duration for contract performance; orthere is an entrenched tradition or

practice of receiving progress payments or advance payments from the purchaser in a
particular industry or segment of industry. However, payments can only be made for goods
or services received in the same fiscal year. Funds must be spent in the fiscal year for which
they are appropriated and cannot be carried forward by means of advance payments.
E. In the case of subscriptions or insurance premiums, which are often for a term of one full
year and which may not start exactly on April 1, payments can be restricted to goods or
services provided in no more than the current and next fiscal years. For instance, a
publication subscription paid in February 2009 cannot cover a period beyond March 2010.
F. In the case of multi-year contracts requiring continuing advances, contracting officers can
negotiate the payment of a series of separate advances covering each fiscal year. Thus, a
payment can be made for a maintenance contract, for the period of a contract, from
February to March 2009, and then another payment covering the period from April 2009 to
March 2010.
G. In exceptional situations, such as armament purchases or extended warranty service, where

up-front payments covering more than one fiscal year must be made to the supplier,
contracting officers can determine if an advance payment is unavoidable and can be
substantiated. This type of case should be extremely rare.
c. Special Considerations for Foreign Purchases:
i. in the case of United States purchases, progress payments or other payments on account have an
effect on the application of taxes, relating to the time and place of ownership being transferred to
Canada. Legal Services should be consulted to ensure that appropriate terms in the contract
protect against unnecessary taxes;
ii. for other foreign purchases, where progress payments or other payments on account are granted, a
check should be made to determine if the application of sales, use, or some other form of tax is
related to the time and place of ownership being transferred to Canada. If this is the case, Legal
Services must be consulted.
4.70.30.15 Progress Payments

(2010-01-11)
a. In the case of a progress payment, SACC Manual general conditions 2010A, 2029, 2030, 2035 and 2040
provide that ownership of the materials or work-in-process will be transferred to Canada upon making
such payment.
b. When a progress payment is to be used; milestones, when possible, should be specified to relate
payments to measurable progress on the contract. Technical or other contractual achievement yardsticks
may be used as milestones. Milestone payment is a form of progress payment addressed under the
policy related to progress payments. The value of each milestone should be negotiated before contract
award. SACC Manual clause H3009C may be used in contracts when progress payment against
milestone will be made in accordance with an established schedule of milestones using form PWGSC-
TPSGC 1111 (http://www.tpsgc-pwgsc.gc.ca/app-acq/forms/formulaires-forms-eng.html#f1111) and the amount claimed
is subject to holdback. When the amount claimed is not subject to holdback, clause H3010C may be
used. Either clause may be used in conjunction with H3022C or H3024C and H4012C.
c. When progress payments against milestones are not possible because of the nature of the contract,
progress payments may be made at set periods of time on a calendar basis (time payment method), or
based upon the actual costs incurred for material purchases and the partial completion of work, as
certified by company and government inspectors. When progress payments will be made based on cost
incurred using progress claim form PWGSC- TPSGC 1111, clause H1003C may be used in conjunction
with H3022C or H3024C, if applicable. The clause H1003C may also be used in conjunction with
H4500C in all contracts for goods with a Canadian-based contractor when advance or progress
payments will be made. When payment will be made on a monthly basis for work performed in
contracts for services, clause H1008C may be used. In contracts for maintenance services invoiced
monthly or bi-monthly or quarterly, the clause H3020C may be used. The clause H3018C may be used
in standing offers for air charter services for the carriage of goods and people.
d. A combination of milestone and cost incurred progress payments is also possible for different phases of
the contract. The combination method can be used, for example, to pay incurred costs in the early stages
of a major procurement when it would be difficult to define milestones, with payments for later and
more definable stages of the production process made against specified milestone achievements.
e. If milestone or cost incurred progress payments are not possible, the time payment method of making
progress payments should be used with caution. The overriding requirement for use of this method is the
existence of a project progress monitoring and control system, to provide the contracting officer with
reliable indicators of the actual value of work accomplished when a payment is due. With the exception
of rental and service contracts, the time payment method must be approved at the director level or
above.
4.70.30.20 Advance Payments

(2010-01-11)
a. TB guidelines specify that advance payments should be considered only in extraordinary circumstances.
i. Contracts for services: Contracts for services valued over $25,000, some form of guarantee given
by a financially strong third party should protect any advance payment. The guarantee usually
takes the form of a surety bond from an associated or parent company or a financial institution, or
an irrevocable Letter of Credit from a Canadian bank. It should provide for return to Canada of
the unliquidated balance of the advance, plus interest, in the event of work cancellation or other
contract termination for Canada's convenience. Other types of guarantees may be discussed with a
cost analyst.
ii. A decision to not request guarantees requires a strong business case.
iii. Contracts for services valued to less than $25,000, security may be dispensed with where the
contracting officer certifies that the contractor has been actively engaged in the particular industry
and enjoys a good reputation in that industry, and that PWGSC has no record of significant
financial or performance problems encountered in past dealings, if any, with the contractor.
b. Cash Discount Considerations: For all contracts, except those for advertising, payment may be made in
advance of the due date when the contractor offers a cash discount for advance payment and the
discount at least offsets the cost to Canada for early payment. Cash discounts for advance payment will
not be considered in the evaluation of bids/offers.
c. Special Considerations for Foreign Purchases: In the case of purchases from the United States (U.S.)
Government, through the Foreign Military Sales (FMS) program, advance payments are required in
accordance with U.S. law before the start of delivery for any goods and services to a foreign-based
contractor. In this case, Treasury Board has approved the standard conditions for FMS sales from the
U.S. Government. Any change in the standard conditions will require a submission for Treasury Board
approval.
4.70.30.25 Holdbacks
(2010-01-11)
a. For all contracts where progress payments are provided, holdbacks must be used to avoid overpayment
and to act as an incentive for the contractor to complete the job. However, for contracts using milestone
payments, a requirement for a holdback may be included at the discretion of the contracting officer.
b. The following limits on payments for contracts involving progress payments apply:
i. Firm Price with milestone payments:

Total Allowable Costs: up to 100 percent of negotiated milestones
Purchased Accountable Advance Materials: Nil
Goods and Services Tax/Harmonized Sales Tax: Nil
Profit: Nil
ii. Firm Price with progress payment on basis of negotiated cost3:

Total Allowable Costs: Up to 90 percent
Purchased Accountable Advance Materials: 100 percent
Goods and Services Tax/Harmonized Sales Tax: If payable
Profit: Pro rata
iii. Cost Reimbursable:

Goods and Services Tax/Harmonized Sales tax: If payable

Profit: Pro rata
iv. Fixed Time Rate:

Profit: Pro rata
v. Price to be negotiated:
A. Last year's negotiated rates/prices serve as interim rates for the new year4:
Profit: Pro rata
B. All Other Contracts3:

Profit: Pro rata
c. Exceptions to these payment ceilings may be considered:
i. when recognized trade practices supporting such exceptions can be demonstrated;
ii. in the case of organizations that do not receive a profit or fee; or
iii. when alternative methods of financial protection are employed, for example, security deposits
(government guaranteed bonds, bills of exchange, irrevocable standby letters of credit) or surety
bonds.
d. The timing for making decisions relating to the method of payment to be used varies with the
solicitation method employed:
i. for an Invitation to Tender (ITT), the method of payment must be selected, before issuing, and
included in the solicitation documents (see SACC Manual clause H1003C.) Financing costs will
not constitute an evaluation factor;
ii. for competitive solicitations, the solicitation will clearly specify that any requirement on the part
of the supplier for receipt of progress or advance payments will constitute an evaluation criterion
(this may require SACC Manual clause H1003C). When evaluating bids/offers, the cost to
Canada of providing the progress payments or advance payments will be taken into account, as
will the risk of exposure from the method of payment, and the availability of funds.
e. This cost determination may be waived when all responsive suppliers have requested the identical
method and pattern of payment (for example, progress payments on a cost-incurred basis with virtually
identical payout schedules).
3The percentages shown apply to incurred costs (incurred hours for fixed time rate contracts).
4The percentages shown apply to the previous year's rates.
4.70.35 Audit
(2010-01-11)
a. The provision for audit is an integral part of the procurement planning process. SACC Manual general
conditions 2029, 2010A, 2010B and 2010C include a clause allowing the government to audit the
amount claimed. The general conditions 2030, 2035 and 2040 include a clause allowing authorized
representatives of Canada to audit, inspect and examine the accounts and records of the contractor.
b. There are a number of circumstances where additional, specific provisions for audit (or verification)
must be included in a contract. The need for additional audit (or verification) provisions is most often
associated with the requirements of a contract to include price certification, time verification, and/or rate
certification clauses.
4.70.35.1 Firm Price Contracts - Price Certification and Discretionary Audit

(2010-01-11)
a. All non-competitive firm price contracts valued over $50,000 whether for the acquisition of commercial
or non-commercial goods and services require the submission of a price certification by the contractor.
All such contracts must also have a discretionary audit clause included in the contract.
b. This applies to all such contracts issued by PWGSC and those issued by Canadian Commercial
Corporation (CCC) on behalf of the United States Department of Defence (DoD) and the National
Aeronautics and Space Administration (NASA), except for contracts for which the price is based on
tariffs fixed by public regulatory bodies and not subject to negotiation by PWGSC.
4.70.35.5 Cost Reimbursable Contracts - Certification and Audit

(2012-07-16)
a. In the case of cost reimbursable contracts, a price is not specified in the contract but will be ascertained
after completion of the work. Therefore, in accordance with section 34 of the Financial Administration
Act, it is necessary for the appropriate authority to certify that the price, based on actual costs incurred
when these are known on completion of the work, is reasonable. The purpose of the reference, in all cost
reimbursable contracts valued over $50,000, to the costs incurred being determined by government
audit, is to provide a basis for such certification of the reasonableness of the price.
b. Contracts containing cost reimbursable elements must contain an appropriate audit clause. The cost
reimbursable bases of payment are: cost reimbursable with fixed time rate; cost reimbursable with
incentive fee; cost reimbursable with fixed fee; cost reimbursable with fee based on actual costs; and
cost reimbursable with no fee.
c. Upon completion of a cost reimbursable contract, the contractor will be required to provide a cost
submission to the contracting officer. The requirement for a cost submission must be listed as a
mandatory deliverable item within the contract, except that it is discretionary in the case of repair and
overhaul contracts. (See SACC Manual clause C0300C.)
4.70.35.10 Fixed Time Rate Contracts - Time Verification

(2010-01-11)
a. Time charged and the accuracy of the contractor's time recording system are subject to verification by
Canada, before or after payment is made to the contractor under the terms of the contract, whether
competitive or non-competitive and regardless of value. The extent of the verification carried out
should, however, reflect the value of the contract. (See SACC Manual clause C0711C.)
b. This applies to all such contracts except those for provision of temporary help services and rental of
equipment.
c. Upon completion of a fixed time rate contract, the contractor must provide a submission detailing the
actual time incurred in performance of the contract. In addition, SACC Manual clause C0710C or
C0711C must be used to provide for the verification of time charged and the contractor's time recording
system.
4.70.35.15 Audit of contract with a foreign contractor

(2017-10-24)
When there is a requirement for an audit of a contract with a contractor, or that includes a subcontractor where a
significant portion has been subcontracted, from a North Atlantic Treaty Organization (NATO) allied country,
the contracting officer should consider using the services of the foreign contractor or subcontractor's country's
government to conduct the audit. This service can be called up by submitting a request through the Price
Support Directorate (PSD). More information on this service is provided at 9.56 Price certifications and audits
of foreign contractors.
4.70.40 Discretionary Audit Clauses

(2010-01-11)
Contracting officers must include the following applicable discretionary audit SACC Manual clause in
contracts, as follows:
C0100C:
for commercial goods and/or services when price certification clause C0002T, C0004T, or
C0006T is used; or when rate certification clause C0600T is used;
C0101C:
for non-commercial goods and/or services when price certification clause C0003T is used; or
when rate certification clause C0601T is used.
4.70.45 Time Verification Clauses

(2010-01-11)
Contracting officers must include the following applicable time verification SACC Manual clause in contracts,
as follows:
C0710C:
for fixed time rate contracts for services and material;
C0711C:
for fixed time rate contracts for the verification of time charged and accuracy of recording. Do not
use this clause when C0705C is used.
4.70.50 Invoicing Instructions

(2010-01-11)
a. The SACC Manual general conditions provide conditions on invoice submission, and the procurement
templates provide invoicing instructions.
b. SACC Manual clause H5001C must be used in contracts for goods or services when the contractor must
submit invoices in accordance with all the information required under section "Invoice Submission" of
the applicable general conditions, and invoices will be submitted once all the work identified in the
invoice has been completed.
c. When progress payments or advance payments are proposed, the appropriate clause from the SACC
Manual must be included in the contract. When progress claim form PWGSC- TPSGC 1111
(http://www.tpsgc-pwgsc.gc.ca/app-acq/forms/1111-eng.html) is required to make progress or milestone payments
and supporting documents must be submitted with the claim, clause H3022C may be used.
Alternatively, clause H3024C may be used when no supporting document is required with the claim. In
contracts for maintenance services invoiced monthly or bi-monthly or quarterly, clause H3020C may be
used.
4.70.55 Payment instruments

(2016-01-28)
a. The Government of Canada (GC) can use various methods to settle the payment of a good or a service,
which are referred to as "payment instruments". These instruments determine how the contractor will be
paid.
b. Contractor invoices may be paid using the following payment instruments:
i. Direct Deposit (for domestic and international payments);
ii. GC acquisition card (GC Visa and GC MasterCard for domestic and international payments);
iii. Electronic Data Interchange (for domestic payments);
iv. Wire Transfer (for international payments only);
v. Large Value Transfer System (for domestic payments over $25M);
vi. Cheque (for domestic and international payments); and
vii. Petty cash (for domestic payments).
c. With the exception of cheque and petty cash, all of the above are electronic payment instruments.
Electronic payment instruments are GC's preferred payment instruments.
d. In instances where the client department or agency wishes to make payment using electronic payment
instruments, they may identify their preference in the bid solicitation and resulting contract
document(s), allowing bidders or contractors to indicate their capacity to accept various forms of
electronic payment. Refer to the SACC Manual clauses H3027T and H3027C.
e. For more information on the electronic payment instruments, please consult the Receiver General
website.
4.70.55.5 Direct deposit

(2016-01-28)
a. Contractor invoices may be paid via direct deposit. Direct deposit is an electronic fund transfer and is
the preferred payment instrument by the Government of Canada (GC). Contractors are strongly
encouraged but not obligated to accept payment via direct deposit. The GC offers direct deposit in
Canada as well as in a large number of foreign countries (for a list, please consult the Receiver General
website).
b. While direct deposit does not carry the remittance information or "stub information", client departments
and agencies can now send payment details via an email to contractors.
c. If contractors want to receive a payment through direct deposit, they must follow the appropriate
enrolment steps with the client department or agency responsible for issuing payment. Normally, a void
cheque is required to document the accurate banking information.
4.70.55.10 Payment by acquisition card

(2017-06-21)
a. Contractor invoices may be paid using Canada acquisition cards (credit cards), which includes Visa and
MasterCard. However, contractors are not obligated to accept acquisition cards as a payment instrument.
b. The decision to use acquisition cards for payment of contractor invoices or for payment at point of sale
is a cash management decision made by the client department or agency.
c. Acquisition cards can also be used for call-ups under certain established standing offers (SOs). Where it
is anticipated that the client department or agency may use the acquisition card for procurement and/or
payment at point of sale in an SO, consult the clauses contained in the Request for Standing Offers
Template (RFSO)
(http://www.gcpedia.gc.ca/wiki/Standard_Procurement_Templates#Request_for_Standing_Offers_Template_.28RFSO.29) and
General Conditions 2005.
4.70.55.15 Electronic Data Interchange

(2016-01-28)
a. Electronic Data Interchange (EDI) payments are electronic payments used for domestic payments, that
include structured remittance information or "stub information" concerning the payment (e.g.,
describing the purpose of the payment).
b. When the payment is made into the contractor’s account, additional remittance information is also
provided to the contractor. The manner in which the contractor receives the information from its
financial institution is determined between the contractor and its financial institution. It is the
contractor’s obligation to ensure that its account is EDI-capable.
4.70.55.20 Wire transfer

(2016-01-28)
a. A wire transfer is an electronic transfer of funds that is often the most expedient method for transferring
funds to a bank account in a foreign country. Unlike foreign direct deposit, it is possible to issue a wire
transfer in a currency other than the local currency of the country where the bank account resides.
b. Due to high transaction costs to the Government of Canada, wires should be limited to large value, low
volume, and time-sensitive foreign payments or to payments that need to be issued in a currency other
than that of the country of destination.
4.70.55.25 Large Value Transfer System

(2016-01-28)
a. The Large Value Transfer System (LVTS) is an electronic wire transfer system, which is used to
facilitate the transfer of irrevocable payments in Canadian dollars within Canada.
b. Although LVTS payments can be of any value, they should be used mainly for large value payments.
All Government of Canada domestic payments greater than $25 million must be issued with LVTS.
c. Through LVTS, funds are transferred in real time between participating financial institutions on behalf
of client departments and agencies, and the money is available to the contractor immediately.
4.70.60 Certifications
(2013-01-28)
When the supplier provides certifications in its bid/offer/arrangement, these certifications are subject to
verification by Canada during the entire period of the contract/offer/arrangement. If the
contractor/offeror/supplier does not comply with any certification or it is determined that any certification made
by the contractor/offeror/supplier is untrue, whether knowingly or unknowingly, then Canada may terminate the
contract for default, set aside the standing offer or the supply arrangement and remove the supplier from the list
of qualified suppliers. Consult the standard procurement templates (MC, HC, RFSO and RFSA) for the
certification clause.
4.70.65 Defence Contract and Defence Supplies

(2010-01-11)
a. Any contract constituting a "defence supplies", as defined in the Defence Production Act (DPA), must
contain Standard Acquisition Clauses and Conditions(SACC) Manual clause A9006C.
b. A contract awarded on behalf of the Department of National Defence (DND) is not necessarily a
defence contract. For example, a contract for goods purchased for DND's day-to-day operations is not a
defence contract. Furthermore, it is also possible for a defence contract to be awarded on behalf of a
department other than DND. The client department, as the technical authority, will determine whether a
particular requirement will result in a defence contract, as defined in the DPA.
c. Solicitations and contracts for defence supplies valued at $250,000 or more, which involve importation
of defence supplies, and require the contractor to be the importer, must contain SACC Manual clause
C2611C. This clause specifies that the contractor will be responsible for pre-arranging remission on
importation or for paying customs duties on importation and applying to the Canada Border Services
Agency (CRA) for a refund. Use SACC Manual clause C2610C when DND is the importer. DND is
responsible for applying to Public Works and Government Services Canada in good time for the
certification required by the Customs Tariff.
d. According to CRA, "defence supplies" include only those specified goods that are, or may be, used
directly or indirectly in the defence of Canada. Goods purchased for DND's day-to-day operations are
not eligible.
4.70.70 Services - Non-permanent Residents

(2010-01-11)
a. The Immigration and Refugee Protection Act and Regulations set out the conditions under which non-
permanent residents obtain employment authorization before receiving permission to enter Canada for
temporary work. This includes temporary entry to perform work under contract to the federal
government.
b. For the procurement of goods and services that may result in the need for the services of non-permanent
residents to be performed in Canada, the following appropriate SACC Manual clauses must be included:
i. A2000C when the contract is to be with a Canadian-based supplier; and
ii. A2001C when the contract is to be with a foreign-based supplier.
4.70.75 Insurance
(2010-01-11)
a. When there are specific insurance requirements for a requirement, SACC Manual clause G1001C may
be used in the contract. Alternatively, when insurance provisions do not apply to a specific requirement,
clause G1005C may be used in the contract.
b. Contracting officers must insert the applicable insurance clauses contained in subsection 5-G of the
SACC Manual. For more information, see Annex 4.7: Insurance Clauses for insurance clauses, Annex
4.8: Insurance of Government-owned or Leased Vehicles for insurance of government-owned or leased
vehicles, and Annex 4.9: Insurance of Government-owned or Leased Equipment for insurance of
government-owned or leased equipment. Also consult the Risk Management Web site. For any
additional information related to insurance, contracting officers may contact the Risk Management
Advisory Services, PWGSC, by e-mail at rcnscgra.ncrrmias@tpsgc-pwgsc.gc.ca.

(2010-01-11)
a. When the decision to obtain contract financial security has been taken, the contracting officer must
stipulate in the solicitation documents that contract financial security will be required. SACC Manual
clause E0007C must be used in conjunction with E0008C when the contractor is required to provide
contract financial security after contract award. The clause E0005C must be used in conjunction with
E0008C when the successful supplier must provide a security deposit as contract financial security.
b. Any letter of credit received by Canada must have an appropriate expiry date. The letter of credit should
not have its expiry date coincide with the projected cessation of the risk it covers. For instance, the
expiry date stated in the letter of credit should not be the same date as that projected for the completion
of the work. The expiry date should allow for a comfortable turn-around time from the estimated date of
completion of the work to ensure that the contracting officer is satisfied that the contractor has
discharged its obligations for which the letter of credit was provided. If the contractor has not met its
obligations, the contracting officer must have sufficient time to prepare and present the required demand
for payment under the letter of credit.
c. When financial security in the form of a performance bond is required in the contract, clause E5000C
must be used.
d. When a contract financial security in the form of labour and material payment bond is required, clause
E8000C must be used.
4.70.85 Controlled Goods

(2010-01-11)
Whenever the controlled goods program applies to a requirement, SACC Manual clause A9131C must be used
in contracts to inform the contractor of its obligations under the controlled goods program. When the contract is
for the Department of National Defense, clause B4060C must be used in the contract.
4.70.90 Limitation of Liability

(2010-01-11)
When limitation of liability applies to a requirement, SACC Manual limitation of liability clauses may be
included in the contract.
a. For Information Management/Information Technology (IM/IT) requirements where special authority

was granted by the Treasury Board to allocate risk, SACC Manual clause N0000C must be used only for
IM/IT contracts. The applicable dollar amount in the clause is to be determined from the appropriate
commodity grouping (usually "the Contract Price at the time the damage occurs" or a pre-determined
dollar amount established by the commodity grouping), or in consultation with Risk Management
Advisory Services (RMAS).
b. When limiting a contractor's liability to Canada, but not limiting each party's liability for damages to
third parties, clause N0001C must be used. Typically, this clause would be used when a commodity
grouping exists (other than IM/IT or satellite services, which have their own clauses) or after a risk
assessment has been performed to determine the risk exposure and amount of protection required by
Canada. Limiting a contractor's liability should be an exception to the normal practice of using the
standard conditions. When the decision is made to limit a contractor's liability to Canada, contracting
officers, in conjunction with client departments, must be able to demonstrate that the risks associated
with the procurement have been analyzed and that the limitation of liability provides adequate
protection to Canada. Decisions with respect to limiting a contractor's liability should be made before
the solicitation release or, in instances of non-competitive contracts, before the start of negotiations. The
applicable dollar amount in the clause must be determined using the amount from the appropriate
commodity grouping, or in consultation with RMAS.
c. When limiting a contractor's liability to Canada and requiring the contractor to indemnify Canada
against third party claims, clause N0002C must be used. Limiting a contractor's liability should be an
exception to the normal practice of using the standard conditions. When the decision is made to limit a
contractor's liability to Canada, contracting officers, in conjunction with client departments, must be
able to demonstrate that the risks associated with the procurement have been analyzed and that the
limitation of liability provides adequate protection to Canada. Decisions with respect to limiting a
contractor's liability should be made before solicitation release or, in instances of non-competitive
contracts, before the start of negotiations. The applicable dollar amount in the clause is to be determined
using the amount from the appropriate commodity grouping, or in consultation with RMAS.
d. Clauses N0001C and N0002C are similar, in that both create a limit on the contractor's liability for
damages to Canada. However, the two clauses deal with the contractor's liability for claims made by
third parties in different ways. N0001C essentially provides that the parties agree to allow the laws in
the jurisdiction of the contract to determine who is responsible for any damages to third parties. It then
goes on to provide that, if Canada must pay the third party for damages caused by the contractor
because of joint and several liability, the contractor must reimburse Canada for that amount. In short,
under clause N0001C, each party is responsible for any damages that it causes to third parties. On the
other hand, clause N0002C states that the contractor must indemnify Canada against any third party
claims that relate to the contract.
e. When limiting a contractor's liability to Canada for first and third party claims, clause N0003C must be
used. Limiting a contractor's liability to Canada should be an exception to the normal practice of using
the standard conditions. Limiting a contractor's liability to Canada for third party claims should be
avoided at all costs, as the exposure of risk to Canada could be extensive. Limiting a contractor's
third party liability can only be done under a very limited number of circumstances, the main one being
non-competitive contracts. When the decision is made to limit a contractor's liability to Canada,
contracting officers, in conjunction with client departments, must be able to demonstrate that the risks
associated with the procurement have been analyzed and that the limitation of liability provides
adequate protection to Canada or, if there is a substantive transfer of risk to Canada, that appropriate
approvals have been sought. Decisions with respect to limiting a contractor's liability should be made
before the start of negotiations. The applicable dollar amount in the clause is to be determined using the
amount from the appropriate commodity grouping, or in consultation with RMAS.
f. For the satellite services requirements where special authority was granted by the Treasury Board to
allocate risk, clause N0008C must be used. The applicable dollar amount in the clause is to be
determined in consultation with RMAS or in accordance with published commodity groupings approved
by RMAS.
g. For more information on risk management, consult Chapter 3 - Procurement Strategy.
4.70.95 Fair Wages

(2014-06-26)
This section is removed from the Supply Manual as a result of the repeal of the Fair Wages and Hours of
Labour Act on January 1, 2014.
4.70.100 Transportation Costs Information

(2017-09-21)
a. All goods requirements with an estimated expenditure of $25,000 or more, including the Goods and
Services Tax or Harmonized Sales Tax, as applicable, and with transportation costs exceeding $7,500,
must be submitted to the Traffic Management Directorate, with the following exceptions:
i. requirements for repair and overhaul, development, engineering services, technical studies and
tooling;
ii. capital assistance;
iii. construction of complete ships or complete aircraft;
iv. contracts in which client departments retain control of all or part of the delivery;
v. contracts for perishable foods;
vi. purchases from Canadian suppliers on behalf of a foreign government or agency, unless assistance
is requested by that government or agency;
vii. standing offers, where order quantities and destination are unknown;
viii. food and bulk fertilizer purchases under an external aid program;
ix. requirements for multiple items that may result in more than one contract and for which
identification of individual transportation costs is not practicable;
x. contracts for complete systems where multiple components may be shipped from multiple sources
and locations, and for which establishment of an FOB Origin cost is impractical;
xi. service contracts; and
xii. procurements covered by the North American Free Trade Agreement (NAFTA), Canada-
European Comprehensive Economic and Trade Agreement (CETA) or the World Trade
Organization Agreement on Government Procurement (WTO-AGP), unless a non-competitive
process under one of the limited tendering reasons in the agreement is used.
b. The Incoterms 2000 " FCA Free Carrier (...named place)" must be used in all Department of National
Defence (DND) sole source contracts, all repair and overhaul contracts where transportation is not part
of the competitive bid, and in all United States (U.S.) Foreign Military Sales contracts (not all U.S.
contracts). DND will manage the inbound logistics (coordinate, arrange and pay for all inbound
transportation) for these contracts. For these contracts, the contractor must deliver these goods " FCA
Free Carrier", and the named place will always be the contractor's facility, unless specified otherwise by
DND. The contracting officer must include in the contract either Standard Acquisition Clauses and
Conditions (SACC) Manual transportation clause D0035C or D0037C. These clauses direct the
contractor to obtain shipping instructions from DND and how to do so.
c. If the contractor is not located in Canada, and the goods are to be imported into Canada by DND, the
contracting officer must include clause C2608C and, when applicable, clause C2610C. If the goods are
to be imported into Canada by the contractor, include clause C2611C, if applicable.
d. To assist contracting officers in determining which shipping clause is applicable for use in their
procurement, the following list of clauses and their application is provided for consideration:
i. DND contracts:
A. D0035C: for foreign-based contractors and US Foreign Military Sales contracts (clauses
C2608C and C2610C may apply);
B. D0037C: for Canadian contractors;
C. D4001C: for delivery FOB destination.
ii. All other government departments:
A. D4000C: for delivery FOB origin (use clauses C5200T in bid solicitations and C5200C or
C5201C in contracts);
B. D4001C: for delivery FOB destination (use clauses C5200T in bid solicitations and
C5200C in contracts).

(2010-01-11)
For contracts for janitorial, food catering and security services when the contractor must keep its employees'
records up to date and provide, upon request, information to the contracting officer in accordance with Ontario
labour legislation, SACC Manual clause A0075C must be used. See Annex 4.6: Ontario Labour Legislation.
4.75 Issuance of the Solicitation

(2010-01-11)
4.75.1 Client Department Review of Elements of a Solicitation

(2010-01-11)
a. For sensitive or high-risk procurements, before issuing the solicitation, the contracting officer must
clearly explain to the client department their responsibilities with respect to the solicitation and obtain
written confirmation from the client department via e-mail, facsimile or mail, the following:
i. that the Statement of Work, Statement of Requirement and/or the technical specifications, which
will be included in the solicitation, accurately represent their requirements; and
ii. that the client department concurs with the evaluation criteria and contractor selection
methodology detailed in the solicitation, and that the ratio of percentages with respect to the
technical evaluation in relation to the price evaluation represents value for money.
b. Contracting officers should refer their client departments to any formal agreements between PWGSC
and the client department concerning the division of responsibilities relating to the procurement process
(see Annex 1.1: Matrix of Responsibilities between PWGSC and Client Departments for the
Procurement of Goods and Services (Generic)). The contracting officer must record on file all
significant decisions made in consultation with the client department, regarding requirement definition
and technical evaluation. For more information on evaluation criteria, see 4.35 Evaluation Criteria.
c. It is the client department's responsibility to determine the required level of authority of the personnel
authorized to provide the client department confirmation detailed above.
4.75.5 Determining the Solicitation Period

(2017-09-21)
a. The setting of a solicitation closing date must take into account the level of complexity of the
procurement, the extent of subcontracting anticipated. Sufficient time must be allowed for a supplier to
obtain the solicitation, and any additional material, if applicable, and to prepare and submit a response.
b. For procurements that are not subject to North American Free Trade Agreement (NAFTA), Canada-
European Union Comprehensive Economic and Trade Agreement (CETA) or the World Trade
Organization Agreement on Government Procurement (WTO-AGP), the solicitation period (whether
publicly advertised or not), unless there are pressing circumstances, should not be less than 15 calendar
days either from the date the requirement is posted publicly, or, in the case of procurements not publicly
advertised, from the date the solicitation is released. Low dollar value procurements below $25,000,
including all applicable taxes, may be for less than 15 days, as appropriate for efficiency and cost
effectiveness.
c. For procurements that are subject to NAFTA, CETA and/or WTO-AGP, the following periods apply:
i. For open tendering procedures, the solicitation period must not be less than 40 calendar days from
the date that the Notice of Proposed Procurement (NPP) is published on Government Electronic
Tendering Service (GETS).
ii. For selective tendering procedures not involving the use of a permanent list of qualified suppliers,
an invitation to qualify must be published for a minimum of 25 days on GETS. Following the 25-
day period, a NPP can then be published on GETS for a period of no less than 40 days.
iii. When conducting procurement using selective tendering from a permanent list of qualified
suppliers, in addition to sending solicitations to the selected suppliers from the list, a NPP must be
published. The NPP should be published at the same time as the initial issuance of the
solicitations. When this is done, the period for receipt of solicitation must be no less than 40 days
from the date of the publication of the NPP.
iv. any time period for publication noted above may be reduced in certain circumstances:
A. in the case of recurring contracts where the original NPP provided an estimate of when the
subsequent notices will be published, the solicitation period for subsequent procurements
may be reduced, but not to less than 24 calendar days; and
B. where a state of urgency can be duly substantiated, the solicitation period may be reduced,
but not less than 10 calendar days.
v. When using electronic tendering, CETA (Article 19.10.5 (http://www.international.gc.ca/trade-

commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/19.aspx?lang=eng) ) allows for a
reduction of the minimum tendering period by five days for each one of the following
circumstances:
A. the notice of intended procurement is published by electronic means;
B. all the tender documentation is made available by electronic means from the date of the
publication of the notice of intended procurement; and
C. the entity accepts tenders by electronic means.
d. NAFTA, CETA and the WTO-AGP specify minimum publication periods. At that point, the contracting
officer must make a business decision on how much the solicitation period need to be reduced.
e. Notices with closing dates only appear as “Expired” on GETS the next business day.. The expired notice
and and the associated documents remain available on GETS.
4.75.10 Public Advertisement

(2013-11-06)
Public advertisement using the Government Electronic Tendering Service (GETS) is Public Works and
Government Services Canada's (PWGSC) preferred notification process for competitive procurement.
GETS is where the Government of Canada posts procurement opportunities and allows suppliers to search for
them on-line. Buyandsell.gc.ca/tenders is the official site for Canada to meet its trade agreement obligations and
is the authoritative and first source for Government of Canada tenders. For more information about GETS visit
the Buyandsell.gc.ca Tenders or contact the InfoLine at 1-800-811-1148.
4.75.15 Notice of Proposed Procurement

(2014-06-26)
a. Notification that a solicitation opportunity is available occurs through the posting of a Notice of
Proposed Procurement (NPP) on the Government Electronic Tendering Service (GETS).
b. A NPP is a summary of the solicitation that briefly describes the requirement, and provides pertinent
information that will assist suppliers to determine their interest in fulfilling the requirement and their
ability to successfully meet any key conditions for participating. If applicable, contracting officers must
indicate in the NPP which trade agreement or agreements apply or if Canadian content restrictions
apply. (For example, solicitations may specify that the requirement has been set aside under the
Procurement Strategy for Aboriginal Business or restricted to Canadian-based suppliers as a result of a
National Security Exception. In these cases only aboriginal suppliers or Canadian-based suppliers
respectively would be eligible to bid.)
c. The NPP must indicate whether additional material will be posted on GETS or made available
separately.
d. Many procurement units have developed templates to assist contracting officers to develop NPPs.
Contracting officers should consult with their managers to determine if templates are routinely used in
that procurement unit.
e. The NPP should advise the suppliers of their option to request a debriefing. For samples of suggested
text, refer to the Standard Procurement Templates (Simple, MC, HC, RFSO and RFSA) of the SACC
Manual. Any other notices (i.e. newspapers) should contain the same statement.
f. When entering the point of delivery information on the NPP within the Automated Buyer Environment
(ABE) for a standing offer or supply arrangement, the contracting officer must select only those
provinces or territories where potential deliveries may occur. The "Canadian flag button" in the NPP
must only be selected if it is for a National (Master or Individual) Standing Offer and potential
deliveries may take place in all of the provinces and territories.
4.75.15.1 Official Language Policy Applicable to a Notice of Proposed Procurement

(2010-01-11)
a. All NPPs must be prepared and posted in both official languages and are to specify the language of
service of the issuing office. Suggested wording is:
"This PWGSC office provides procurement services to the public in their ___(insert one of the
following: "official languages"; "English" or "French")".
Note: This notice is not automatically generated by the system.
b. Contracting officers who are identified in NPPs issued by bilingual offices, must be able to deal with
inquiries equally well in both official languages. This may require identifying different officers in each
language version of the NPP. Contracting officers who are identified in NPPs issued by unilingual
offices will provide service in the language of that office. Contracting officers identified in the NPP
should be familiar with the requirements associated with the NPPs.
4.75.15.5 Language Designation of Offices

(2010-01-11)
a. PWGSC offices designated as being bilingual offices:

Moncton, N.B.
Montreal, Que.
Saint John, N.B.
Quebec, Que.
National Capital Region
Bagotville, Que.
b. PWGSC offices designated as being unilingual offices:

St. John's, N.L.
Winnipeg, Man.
Calgary, Alta.
Halifax, N.S.
Brandon, Man.
Vancouver, B.C.
Pembroke, Ont.
Saskatoon, Sask.
Victoria, B.C.
Willowdale, Ont.
Regina, Sask.
Whitehorse, Y.T.
Mississauga, Ont.
Edmonton, Alta.
4.75.20 Procedure for Posting of Notice of Proposed Procurement on Government

Electronic Tendering Service
(2017-09-21)
a. For procurements subject to NAFTA, CETA, WTO-AGP, CFTA and AIT, posting on GETS is required
when using:
i. open tendering; and,
ii. selective tendering:
A. subject to NAFTA, CETA and WTO-AGP (or these agreements in combination with other
agreements, including the CFTA or AIT);
B. when using a one-time source list, notice must be published to invite suppliers to qualify for
inclusion on the list. Notice must also be given to solicit bids/offers/arrangements. This
would normally require the publishing of two separate notices;
C. when using a permanent source list, a notice must be published annually (see CETA Article
19.8.7(b) (http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-
aecg/text-texte/19.aspx?lang=eng) ), identifying the existence of the source list, and how to
qualify. Notice must also be published for each bid solicitation, involving the use of the list;
and
D. covered by CFTA or AIT only when using a one-time or permanent source list: a notice
must be published annually, identifying the existence of the source list and how to qualify.
b. Contracting officers can create and transmit NPPs, as well as the solicitation document to GETS,
through the Automated Buyer Environment (ABE).
c. ABE sends the NPP and solicitation documents for posting on GETS
d. To ensure that solicitation packages are posted to GETS the next business day, contracting officers must
issue their ABE-generated notices and solicitation documents no later than 4:00 p.m. (ET). Extra time
for posting to GETS is required if there is a Drawings and Specifications Package (DSP) or a native file
attachment requirement external to ABE. The required files are attached using the Tender Management
Application (TMA) prior to posting on GETS. For more information about file attachment through
TMA, please contact the InfoLine at: 1-800-811-1148.
e. The regular daily posting schedule to ABE is after midnight (ET).
f. Contracting officers are responsible for preparing and posting procurement notices on GETS, and, in the
case of selective tendering procedures, any annual notices, which establish and maintain a permanent
list of qualified suppliers.
4.75.25 Procedures for Posting Solicitation Documents on Government Electronic

Tendering Service
(2013-11-06)
a. PWGSC Contracting officers use ABE or TMA to create their solicitations for each publicly advertised
competitive solicitation that are then posted on GETS.
b. The ABE Support Team - Acquisitions Services Support Desk (ASSD), Business Operations Service
Management Directorate, acts as a focal point between GETS and the contracting officers to facilitate
corrections.
c. Contracting officers should check GETS the day after issuing the notice from ABE. If there are
discrepancies, or the notice has not been posted, the contracting officer should notify ASSD. The ASSD
Team may be contacted either by telephone at 819-956-3325, or by e-mail at: basa-assd@tpsgc-
pwgsc.gc.ca.
d. The contracting officer must ensure that the notice and solicitation(s) (including all attachments) are
accurate, complete and have been successfully posted on GETS. Corrections required on solicitations
remain the responsibility of the contracting officer.
4.75.30 Distribution of Material Not Electronically Available

(2013-11-06)
a. When the solicitation or additional material cannot be posted on GETS, contracting officers must ensure
the solicitations, in a physical format (such as paper, CD or DVD), or the additional materials (for
example, samples, technical drawings and specifications) are available and are distributed to others.
b. Contracting officers should confirm that documents are not protected by any ownership restrictions and
that they can be copied and distributed.
c. To obtain the required copies of non-electronic solicitations, contracting officers may make the copies
themselves or request the required copies from the client department. The client department initiating
the requisition will be responsible for the duplication costs associated with ensuring that sufficient
copies of a procurement package are available.
d. When additional materials associated with a solicitation (for example, samples or protected documents)
are being sent directly to suppliers, the originating PWGSC office is responsible for selecting an
appropriate method to ensure that this documentation or material is sent to each supplier that requests a
solicitation.
e. If technical data must be sent to suppliers from a different source, for example, distributed by the client
department), the solicitation should not be posted until the data is available from that source. The
solicitation must identify the source.
f. Suppliers are responsible for obtaining copies of the necessary technical data if they are available to the
trade through normal business channels.
4.75.35 Contacting Suppliers Directly During the Solicitation Period

(2010-01-11)
a. On occasion, based on commodity/market knowledge, a contracting officer may conclude that suppliers
of a good or service will not see or respond to a solicitation if it appears only on the GETS. In such
cases, in order to stimulate effective competition and seek best value for Canadian taxpayers, the
contracting officer may contact all such known suppliers to inform them that the solicitation opportunity
has been posted.
b. This contact must only take place after the Notice of Proposed Procurement has appeared on the GETS,
and it should take place as quickly as possible so that the suppliers contacted do not lose time. To ensure
that there will be no question of preferential treatment, this communication should be in writing so that
it can be shown that all suppliers had access to the same information at the same time.
c. The specific purpose of this contact is to ensure that the suppliers know that there is an opportunity
available and to direct them to GETS. For that reason, the contact will be limited to giving brief
information about the good or service being procured and to providing the appropriate reference (one or
more of reference number, Source ID and solicitation number). It must not include any information that
will not be available to suppliers who find out about the opportunity directly through GETS.
d. Contracting officers must document on the file, the date and name of each supplier that was contacted.
The recommended method of notification is the provision of a copy of the NPP.
4.75.40 Distribution of Solicitation Material to Invited Suppliers

(2013-11-06)
a. When procurement is not going to be advertised on GETS, the contracting officer must ensure the
distribution of solicitations to invited suppliers.
b. For requirements not subject to public advertising, the list of suppliers being invited must be released
automatically to all suppliers on that list at the time of solicitation. Lists should be updated as new
suppliers request the solicitation.
c. When the client department is responsible for distributing additional technical documentation that may
accompany the solicitation, the contracting officer must forward the name and address of the invited
suppliers to the client department. Client departments should be requested to document that the
technical material was distributed to the appropriate recipients.
d. When dealing with sensitive (designated/classified) requirements, the source list or solicitation and
contract information are not generally released. Requests for the List of Suppliers should be referred to
the Access to Information and Privacy Office at 819-956-1820.
4.75.45 Use of Source Lists

(2010-01-11)
4.75.45.1 Solicitation by Direct Invitation

(2010-08-16)
a. Source lists are generally the basis for requesting suppliers to bid/provide an offer or arrangement when
a competitive procurement is not publicly advertised.
b. Normally, where source lists are used, other than rotational source lists:
i. Any other supplier making a request may be provided with a bid solicitation and be considered
for evaluation.
ii. These lists may be supplemented by a contracting officer's knowledge of potential sources and
recommendations made by the client.
4.75.45.5 Requirements Subject to Trade Agreements

(2017-09-21)
a. For requirements subject to the international trade agreements and the Canadian Free Trade Agreement,
source lists may be established for particular goods and services, where it is appropriate to establish a
list of pre-qualified suppliers. Such lists should be refreshed at a minimum annually.
b. Open tendering procedures, using GETS, should be used to invite suppliers to submit their expressions
of qualifications for evaluation and placement on the list, if they meet the selection criteria. Suppliers
will be allowed to qualify at any time between the refreshment of the list.
c. Selective tendering procedures can then be used to invite the suppliers on the list to submit
bids/offers/arrangements for a particular requirement for the specific good or service for which the list
was created. See Article 1010 and Article 1011 of NAFTA, Article 19.8 (http://www.international.gc.ca/trade-
commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/19.aspx?lang=eng) of CETA, Article VIII
(http://www.wto.org/english/docs_e/legal_e/gpr-94_01_e.htm#articleVIII) of WTO-AGP and Article 508 of the CFTA.
4.75.45.10 Requirements Not Subject to Trade Agreements

(2010-08-16)
a. For requirements, which are not subject to the international trade agreements and where open
competition is not appropriate, due to the nature of the requirement, bids/offers/arrangements may be
solicited directly from a list of suppliers. If a source list for the particular good or service does not exist,
contracting officers should consider using the Supplier Registration Information service to identify
potential sources of supply, especially for low dollar value goods and services.
In preparing the source list, the contracting officer may include suppliers suggested by the client
department.
b. Automated Source Lists such as the Automated Vendor Rotation System (AVRS)and SELECT, provide
a systematic rotation of vendors in order to ensure equity of opportunity for suppliers, and must be used
where they apply.
c. Whenever a supplier requests an opportunity to submit a bid/offer/arrangement on a specific

requirement, that supplier must be given the opportunity, provided that it is not necessary to cancel the
existing solicitation and issue a new one. This provision does not generally apply to rotational source
lists such as SELECT, which typically limits the solicitation to those suppliers selected for a particular
requirement.
d. Contracting officers are reminded that an effort should be made to ensure best value to Canada in terms
of who is invited, and also that the principle of "fairness and access" be displayed in a practical manner
by rotating opportunities to submit a bid/offer/arrangement within the suppliers on any given list.
4.80 Solicitation Period

(2010-01-11)
The following information is in relation to activities that may occur during the solicitation period. For more
information on setting the solicitation period, see Chapter 3 - Procurement Strategy.
4.80.1 Communications during the Solicitation Period

(2010-01-11)
a. To ensure the integrity of the competitive solicitation process, enquiries and other communications,
regarding the solicitation, must be directed only to the contracting officer that is identified in the
solicitation, not to the client department, or other government officials. See Standard Acquisition
Clauses and Conditions Manual standard instructions and clause A0012T.
b. Contracting officers should avoid one-on-one contact or meetings with suppliers during the solicitation
period. All communications should be in writing, to the extent possible.
4.80.5 Handling Questions during the Solicitation Period

(2014-06-26)
a. Questions from suppliers should be submitted in writing to the contracting officer before the date
indicated in the solicitation document.
b. Simple questions where the answer does not affect other suppliers and how they will respond to the
solicitation, may be answered directly to the supplier asking the question.
c. More complex questions or questions concerning the requirement itself should be forwarded to the
client department for response back to the contracting officer. Technical questions and answers, together
with questions and answers that can be addressed by the contracting officer, should be accumulated and
posted as an addendum/amendment to the solicitation, in the case of public advertisement, or issued
directly as an addendum/amendment to the suppliers. When posting questions during the solicitation
period, care should be taken to protect the identity of the supplier asking the question(s).
d. Changes to the solicitation itself, to reflect clarifications resulting from the questions, including
extensions to the solicitation period, if granted, must be released as an amendment to the solicitation.
e. It is the responsibility of the bidder to monitor the Government Electronic Tendering Service (GETS)
for any updates or amendments to the solicitation notices.
4.80.10 Changes to the Solicitation

(2013-11-06)
a. Any significant change in the information provided in the Notice of Proposed Procurement (NPP) or
solicitation documents before the solicitation closing date, requires an amendment to the NPP and/or
solicitation document. All amendments must be given the same circulation as the original NPP and/or
solicitation documents.
b. Contracting officers must ensure that the amendments to the NPP and/or solicitation documents are
complete. The supplier may then view the actual solicitation amendment document on GETS and/or
download it electronically. The update will then form part of the solicitation document.
c. When a solicitation document is cancelled and reissued, a new NPP must be submitted for posting on
GETS.
d. Any significant information given to one supplier with respect to a proposed procurement must be given
to all other interested suppliers in adequate time to permit the suppliers to consider such information and
respond to the solicitation. In providing this information, contracting officers must take into
consideration the time required to post amendments on GETS.
e. If there is insufficient time to ensure that all suppliers can consider the information and respond
accordingly, contracting officers may consider extending the solicitation period or cancelling and
reissuing the solicitation.
f. The contracting officer must inform the Bid Receiving Unit (BRU) of any change to solicitation closing
dates or times and must ensure that such notification has been received by the BRU.
g. A decision to extend the solicitation period beyond the initially established closing date is a business
decision that can be made by the contracting officer, based on the circumstances of the particular
procurement. It may be possible to process an extension of the bidding period in a relatively short time
frame (more or less 24 hours) when the solicitation of bids has been done using source lists or when the
publicly advertised procurement is posted on GETS.
4.80.15 Assistance to Suppliers

(2013-11-06)
a. For general information on doing business with the federal government, contracting officers should
direct suppliers to Buyandsell.gc.ca.
b. Suppliers interested in doing business with the federal government are encouraged to register in the
Supplier Registration Information system to be assigned a Procurement Business Number (PBN).
c. Suppliers are encouraged to check the Government Electronic Tendering Service (GETS) to search for
government procurement opportunities.
For general procurement enquiries, suppliers should contact the InfoLine at 1-800-811-1148.
d. Questions about a particular solicitation must be addressed to the contracting officer identified in the
solicitation.
4.85 Closing Procedures

(2010-01-11)
In the National Capital Region, bids/offers/arrangements are received and processed centrally at the Bid
Receiving Unit (BRU) located in Place du Portage, Gatineau, Quebec. In the regions, operating procedures may
be adapted to suit local conditions.
4.85.1 Late Bids/Offers/Arrangements

(2010-01-11)
a. For all solicitations, except requests for quotations sent directly to the contracting officer, the solicitation
closing date and time stipulated in the solicitation are firm. It is the responsibility of suppliers to ensure
that the bid/offer/arrangement is delivered on time to the BRU that is specified in the solicitation. The
only acceptable evidence to show timely receipt of the bid/offer/arrangement is the receipt issued by the
specified BRU.
b. Late bids/offers/arrangements will not to be accepted and will be returned. Records will be kept of all
returned bids/offer/arrangements.
c. Contracting officers should consult the applicable Standard Acquisition Clauses and Conditions (SACC)
Manual standard instructions for late bids/offers/arrangements.
4.85.5 Delayed Bids/Offers/Arrangements

(2010-08-16)
a. Contracting officers should consult the applicable SACC Manual standard instructions for delayed
bids/offers/arrangements.
b. However, when dealing with bids submissions for construction contracts, contracting officers should
refer to section 9.10.15 Construction Services.
4.85.10 Transmission by Facsimile

(2010-01-11)
a. Contracting officers should consult the applicable SACC Manual standard instructions on transmission
by facsimile for bids/offers/arrangements.
b. To ensure that official receipt time-keeping equipment represents the correct time, the specified Bid
Receiving Unit must calibrate this equipment and other official time pieces against the official National
Research Council (NRC) time standard, at least once every two working days.
The NRC time standard can be checked 24 hours a day at 613-745-1576 (English) or 613-745-
9426 (French).
4.90 Receipt of Bids/Offers/Arrangements

(2010-08-16)
a. Contracting officers should consult the section on submission of the bid or offer or arrangement
contained in the applicable SACC Manual standard instructions.
b. Bids, offers and arrangements received by the specified BRU will be logged and kept unopened in a
locked receptacle until after the closing date and time.
c. If the envelope or the package containing the bid/offer/arrangement does not provide sufficient
information for identification, that is, the solicitation number, the name of the supplier, return address
and solicitation closing date and time, it will be necessary to open the envelope or the package. The
specified BRU staff will, in these instances, transfer the necessary information to the envelope or the
package, reseal and initial the envelope or the package before it is placed in the bid box.
d. Bids/offers/arrangements received after the solicitation closing date and time, or any solicitations that
have been cancelled, are returned to the suppliers unopened, if possible, with a covering letter,
explaining why the bid/offer/arrangement is being returned. If the envelope or the package does not
contain sufficient information to identify the supplier and/or the solicitation number, the specified BRU
staff will open the envelope or the package for identification purposes, and return the
bid/offer/arrangement with the appropriate letter explaining the reason for opening the
bid/offer/arrangement.
e. In the NCR, bids/offers/arrangements received by the mailroom are time and date stamped and
delivered unopened to the BRU.
f. After the solicitation closing date and time, bids/offers/arrangements are removed from the locked
receptacle and opened by a designated official, in the presence of at least one witness.
g. The specified BRU will screen bids/offers/arrangements to ensure that they are complete. Where
penciled in or corrected information is shown, a photocopy of the bid/offers/ arrangements is made and
kept for audit purposes. This is to ensure that a bid/offer/arrangement cannot be altered. As evidence
that the documents were processed and verified, all financial security documents are perforated, and the
front page of each technical documentation volume is hand-stamped. The bids/offers/arrangements are
then verified and certified against the source list, which is kept on the procurement file.
h. When a need is identified to receive bids/offers/arrangements at a location other than the specified BRU
(for example, a large number of bulky bids/offers/arrangements are expected), contracting officers must
make arrangements with the bid receiving personnel before establishing a solicitation closing date.
i. An assessment of this other location will be carried out by bid receiving personnel, in consultation with
departmental security personnel, to ensure the complete physical security of bids/offers/arrangements
from the time of receipt to the time of opening. The personnel of the bid receiving location are
responsible for recording bids/offers/arrangements received at these locations.
j. When bids/offers/arrangements are solicited by telephone, the contracting officer must accurately
transcribe the information taken, enter the time and date, and initial the written record on file
immediately.
4.90.1 Secure Handling of Bids/Offers/Arrangements

(2010-01-11)
a. The specified Bid Receiving Unit (BRU) will follow the instructions given by the contracting officer
regarding security of bids/offers/arrangements.
b. If a bid/offer/arrangement is marked as "protected", "confidential", "secret" or "top secret", the

government procedures for the transmittal of "Protected/Classified" information or assets must be
followed. All bids/offers/arrangements and other information or assets concerning a sensitive
bid/offer/arrangement must be hand-delivered to the contracting officer that originated the solicitation,
and a receipt must be obtained.
c. Information about security procedures is available from the Canadian Industrial Security Directorate
Web site.
4.90.5 Public Opening

(2010-01-11)
a. When bids are opened publicly, they are removed from the locked receptacle, transported to the place of
public opening and opened in the presence of a witness. The name and address of each bidder and the
amount of each bid are read out.
b. If there are multi-items listed in the bid but there is no total bid price, the bid price on each item is read
out. It is also confirmed that bid security (if required) is included in the bid.
4.90.10 Receipt of Quotations

(2010-01-11)
a. Written bids (quotations) submitted in response to a Request for Quotations, which are sent directly to
the contracting officer, will be declared non-responsive if received after the closing date and time,
regardless of the date of mailing.
b. To ensure that all responsive quotations are considered and to accommodate internal mail delivery
schedules, contracting officers may need to delay the award of a purchase order until after delivery of
the first morning mail on the day following the closing date.
c. Quotations must be signed and dated by the contracting officer upon receipt. Sectors/regions must
ensure that the receipt, custody and handling of quotations submitted directly to the contracting officer
are conducted in a manner that reflects the principle of fairness to all suppliers.
4.95 Modification and Withdrawal of Bids

(2010-01-11)
a. Bids/offers/arrangements may normally be modified, withdrawn or resubmitted before the solicitation

closing date if it is done in writing. This includes electronically transmitted responses.
b. For quotations directed to the contracting officer only, to maintain the integrity of the bidding system,
no modification will be considered after receipt of the quotation, unless negotiated by PWGSC.
Negotiations must be held with all suppliers that submitted responsive quotations.
c. If the solicitation conditions permit and a supplier increases a price before closing, any additional
financial security required must be received within a reasonable period of time ( normally within five
working days).
d. A bid/offer/arrangement withdrawn after solicitation closing cannot be resubmitted.
e. Bids submitted with bid security may be withdrawn without compensation to Canada if there is a
significant error on the face of the bid. Approval at the director level is required before an error can be
declared significant on the face of the bid. Examples of such errors include a missing page.
f. If a supplier wishes to withdraw a bid/offer/arrangement for any reason other than a significant error on
the face of the bid/offer/arrangement, Legal Services must be consulted.
g. If PWGSC allows a supplier to withdraw a bid submitted with bid security without a penalty due to a
significant error on the face of the bid, and there was a public opening, an advice notice to that effect,
signed by a director, must be sent to all suppliers.
4.100 Canceling and Reissuing a Solicitation

(2017-09-21)
a. If a solicitation is cancelled before the closing date, contracting officers must issue a cancellation notice
through the Automated Buyer Environment (ABE) for transmission to the Government Electronic
Tendering Service (GETS). The Notice of Proposed Procurement (NPP) will then be marked as
"cancelled" on GETS. Contracting officers can no longer cancel solicitations directly on GETS.
b. Contracting officers must notify the Bid Receiving Unit of the cancellation and provide instructions
regarding the disposal of any responses to the original solicitation.
c. Contracting officers are responsible for internal distribution of solicitations and updates within PWGSC
and to the client departments.
d. If the cancellation takes place after the closing date, suppliers should be advised within 10 calendar days
of the cancellation of the solicitation.
e. Contracting officers may reissue a solicitation, where:
i. A significant change has occurred in a requirement before a contract is awarded or a standing

offer or supply arrangement is issued.
A. If a significant change affects the procurement strategy or has an impact on the level of risk,
another procurement risk assessment must be performed.
B. For example, if the original strategy was to compete electronically and the revised strategy
is to direct (or sole source) the requirement, then another procurement risk assessment must
be performed to determine if the change in strategy has an impact on the risks already
identified.
C. At the same time, the procurement risk assessment will also identify the appropriate level of
contract entry approval based on the revised identified risks.
D. Approval of the revised procurement strategy is required even if the risk assessment
indicates the same approval level as was originally sought.
E. The approval document must include the details about the new solicitation.
ii. All bids/offers/arrangements are non-responsive or do not represent fair value or where no
bids/offers/arrangements were received in response to a competitive solicitation. The North
American Free Trade Agreement (NAFTA), the Canada-European Union Comprehensive
Economic and Trade Agreement (CETA), the World Trade Organization Agreement on
Government Procurement (WTO-AGP), the Canadian Free Trade Agreement (CFTA) and the
Agreement on Internal Trade (AIT) permit limited tendering procedure in such circumstances.
iii. The acceptance period for the bid or offer or arrangement has expired before a contract is awarded
or a standing offer or supply arrangement is issued.
f. For the following procurements, authorization from the appropriate approval authority must be obtained
prior to reissuing a solicitation with no change to the requirement or strategy:
i. Complexity Level 1: Contracting Officer
ii. Complexity Level 2: Manager
iii. Complexity Level 3: Manager
iv. Complexity Level 4: Director/Regional Director
v. Complexity Level 5: Director General/Regional Director General
g. Whenever a solicitation is issued to replace an earlier one, the contracting officers must insert Standard
Acquisition Clauses and Conditions Manual clause A9043T as the first statement in the reissued
solicitation and new Notice of Proposed Procurement (NPP).
h. For procurements that are subject to the international trade agreements and the Canadian Free Trade
Agreement (CFTA), a new NPP should be published when a solicitation is cancelled and reissued. If
there were no responsive bids/offers/arrangements received in response to the original competitive
solicitation and the requirement is not being changed significantly, contracting officers may send
solicitations directly to suppliers without publishing a new NPP. However, when following this
approach, it is strongly recommended that contracting officers consider reposting the NPP in the
interests of openness and transparency, and include in the notice that some suppliers will be invited
directly.
i. If a solicitation is cancelled or reissued, the procurement file must be documented to provide details on
the rationale to support such a decision.

(2012-07-16)
Supplemental
General Conditions and Supplemental General
General Conditions General
Conditions
Conditions
General Conditions - Standing Offers - Goods or Services 2005

General Conditions - Goods (Medium Complexity) 2010A 4009
General Conditions - Professional Services (Medium 2010B 4011
Complexity)
General Conditions - Services (Medium Complexity) 2010C
General Conditions - Supply Arrangement - Goods or 2020
Services
General Conditions - Goods or Services (Low Dollar 2029
Value)
General Conditions - Higher Complexity - Goods 2030 4010
Goods with some research and development, contractor to 2030 4006
own intellectual property rights in foreground information
Goods with some R&D, Canada to own intellectual 2030 4007
property rights in foreground information
General Conditions - Research & Development (contractor 2040
to own intellectual property rights)
General Conditions - Higher Complexity -Services (except 2035 4012
those listed below)
Supplemental
Electronic Data Processing (EDP) Requirements General Conditions General
Conditions
Hardware Purchase, Lease and Maintenance All general conditions 4001

except 2010C and
2029
Software Development and Modification Services All general conditions 4002
except 2010C and
2029
Licensed Software All general conditions 4003
except 2010C, and
2029
Maintenance and Support Services for Licensed Software All general conditions 4004
except 2010C, and

2029
Supplemental
Ships General Conditions General
Conditions
General Conditions – Higher Complexity - Goods 2030 1028 or 4006 or

4007
General Conditions – Higher Complexity - Goods 2030 1029
Construction Subsection 5-R ARCHIVED -
LAB 180
Supplemental
Procurement for the Canadian Commercial
General Conditions General
Corporation
Conditions
Defence requirements (other than US Government) 2030

Defence requirements (US Government) 2030 (See CCC-6 for
exceptions)
Non-defence requirements CCC50
a. If any software must be delivered under the contract, including any software necessary to run the
hardware, supplemental general conditions 4003 must form part of the contract. Other supplemental
general conditions must also be incorporated, if applicable.
b. General conditions and supplemental general conditions must be used as complete sets. Do not include
two sets of general conditions. A clause can be taken from a set of general conditions and added to the
Articles of Agreement (i.e. a warranty provision in a contract mainly for services but that includes the
delivery of some equipment).
c. A specific procurement may require the modification or deletion of individual conditions. These
changes must be discussed with the client department before inclusion in the solicitation or contract, to
ensure that complete understanding exists as to the extent of the client department's rights and
responsibilities. Modifications may be discussed with Legal services to ensure that the rights of Canada
are protected.
Annex 4.2: Intellectual Property

(2010-01-11)
Structure for Use of Intellectual Property Terms
GENERAL CONDITIONS, SUPPLEMENTAL GENERAL CONDITIONS,

CLAUSES
1: Research and Development Contracts
1A: Client Department Decision: CONTRACTOR to own Foreground Intellectual Property (IP)
Number Title Comments
General Conditions & Supplemental General Conditions
2040 General Conditions - Research & Development Broader background license
Optional Clauses:
K3015C Confidentiality of Foreground Information

K3020C License to Canada's Information
K3415C Commercialization in Canada
K3420C Liquidated Damages - Commercial Exploitation To enforce K3415C
1: Research and Development Contracts - 1B: Client Department Decision: CANADA to own
Foreground IP
1B: Client Department Decision: CANADA to own Foreground IP
2040 General Conditions - Research & Development IP terms replaced by

K3410C
K3410C Canada to Own Intellectual Property Rights in Foreground Broader background
Information license
Mandatory Fill-in Clause
K3200T Basis for Canada's Ownership of Intellectual Property
Optional Clauses
K3305C License to Intellectual Property Rights in Foreground

Information
K3310C No Right for Contractor to Sub-license
K3315C License to Intellectual Property Rights in Canada-owned
Information
2: Goods Contract with associated Research and Development
2A: Client Department Decision: CONTRACTOR to own Foreground IP
2030 General Conditions - Higher Complexity - Goods IP terms replaced by

4006
4006 Contractor to Own Intellectual Property Rights in Foreground Narrower background
Information license
Optional Clauses
K3015C Confidentiality of Foreground Information

K3020C Licence to Canada's Information
K3415C Commercialization in Canada
K3420C Liquidated Damages - Commercial Exploitation To enforce K3415C
2. Goods Contract with associated Research and Development - 2B: Client Department Decision:
CANADA to own Foreground
2B: Client Department Decision: CANADA to own Foreground IP
2030 General Conditions - Higher Complexity - Goods IP terms replaced by 4007

4007 Canada to Own Intellectual Property Rights in Foreground Narrower background
Information license
Mandatory Fill-in Clause
K3200T Basis for Canada's Ownership of Intellectual Property
Optional Clauses
K3305C License to Intellectual Property Rights in Foreground

Information
K3310C No Right for Contractor to Sub-license
K3315C License to Intellectual Property Rights in Canada-owned
information
3: Goods Contract with no Research and Development Expected
3A: Client Department Decision: CONTRACTOR to own all Foreground IP, including Copyright
General Conditions & Supplemental General Conditions (Alternatives)
2030 General Conditions - Copyright (Re: Treasury Board Policy on IP, ARCHIVED - Section
Higher Complexity - 6.5 (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=13697&section=text#cha6) ,
Goods Exceptions to Contractor Ownership)
2010A General Conditions -
Goods (Medium
Complexity)
Clause Needed to effect Client Department Decision
K3002C Contractor to Own IP:

No Explicit License
Rights for Canada
Optional Clause
K3030C License to Material For use with K3002C

Subject to Copyright
4: Services Contract with no Research and Development Expected
4A: Client Department Decision: CONTRACTOR to own all Foreground IP, including Copyright
2035 General Conditions - Copyright (Re: Treasury Board Policy on IP, ARCHIVED - Section
Higher Complexity - 6.5 (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=13697&section=text#cha6) ,
Services Exceptions to Contractor Ownership)
Clause Needed to effect Client Department Decision
K3002C Contractor to Own IP:

No Explicit License
Rights for Canada
Optional Clause
K3030C License to Material For use with K3002C

Subject to Copyright
4: Services Contract with no Research and Development Expected - 4B: Client Department Decision:
CONTRACTOR to own all Foreground IP, including Copyright
4B: Client Department Decision: CANADA to own Foreground IP(Copyright)
2035 General Conditions Copyright (Re: Treasury Board Policy on IP, ARCHIVED - Section
- Services 6.5 (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=13697&section=text#cha6) ,
Exceptions to Contractor Ownership)
Note: The above terms provide Canada with ownership of Foreground IP that is subject to copyright, other
than software and its associated documentation. Contract is silent on other IP.
Mandatory Clause
K3200T Basis for Canada's

Ownership of
Intellectual Property
Annex 4.3: Taxes and Duties

(2015-09-17)
1. Goods and Services Tax or Harmonized Sales Tax

Suppliers must show the Goods and Services Tax/Harmonized Sales Tax (GST/HST) separately in the
bid/offer/arrangement. They must also indicate whether their items are fully taxable, zero-rated, or
exempt (see Annex 4.4: Supplies Exempt from Goods and Services Tax/Harmonized Sales Tax), and
must show into which category each item falls.
2. Customs Duties
a. Solicitations must contain all customs duties information necessary to permit suppliers to submit
responsive bids/offers/arrangements.
b. Canadian-based suppliers must include all applicable customs duties in their prices, unless
otherwise specified. In resulting contracts, all applicable customs duties and taxes must be
included in the price and the total estimated price.
c. Foreign-based suppliers must not include Canadian customs duties, except when it is specifically
requested that the prices include the customs duties and taxes in Canadian dollars. In resulting
contracts, customs duties must not be included in the price, but will be paid by the client
department, upon the importation of goods. However, a foreign-based supplier who subcontracts
in Canada for the manufacture and delivery of goods in Canada will include all customs duties
applicable to the subcontract.
d. For the purpose of the solicitation, suppliers with an address in Canada are considered Canadian-
based suppliers and suppliers with an address outside of Canada are considered foreign-based
suppliers.
3. Customs Duties and Excise Taxes
a. Suppliers located in Canada must include all applicable excise taxes in the solicitations. In
resulting contracts, the applicable taxes must be included in the total estimated price. Suppliers
located outside Canada must not include excise taxes. In resulting contracts, the applicable taxes
must not be included in the total estimated price.
b. When foreign-based suppliers are requested to submit firm prices in their bids/offers, in Canadian
dollars, Canadian customs duties and excise taxes and GST/HST must be excluded from those
prices. See Standard Acquisition Clauses and Conditions (SACC) Manual clause A0222T for bid
solicitations and M0222T for standing offers.
c. In resulting contracts, customs duties must not be included in the price, but will be paid, upon the
importation of goods, by the client department. However, a foreign-based supplier who
subcontracts in Canada for manufacture and delivery of goods in Canada will include all
acceptable customs duties, applicable to the subcontract.
d. Occasionally, it may be appropriate to request foreign-based suppliers to respond on prices, in

Canadian dollars, inclusive of these customs duties and excise taxes. (See SACC Manual clause
A0220T.) However, this may have an effect on the number of suppliers, many of who are
accustomed to bidding FOB plant, and who are not prepared to take the time to gather the
required information and make the necessary calculations. Note: it is the importer of record who
is responsible for paying these customs duties and excise taxes, so a foreign-based supplier has no
direct interest in the calculations unless the requirement is to be FOB destination.
4. Goods and Services Tax/Harmonized Sales Tax

This section provides information on GST/HST and the application of GST/HST to the federal
government.
a. GST/HST, as applicable, is payable on the invoiced amount, before any discount for prompt
payment or penalty for late payment.
b. GST/HST is payable when the progress payment, milestone payment or advance payment
becomes due, or the client department pays it.
c. Canada Revenue Agency (http://www.cra-arc.gc.ca/menu-eng.html) (CRA) considers advance payments

to be progress payments.
d. GST/HST is normally paid on the total amount claimed before any holdback is deducted. No
GST/HST is paid when the holdback is released.
e. The exception is a holdback under legislation or under a contract for the construction, renovation
or repair of a marine vessel or real property. GST/HST calculated on the holdback amount
becomes payable on the earlier part of the day on which the holdback is paid or the day on which
the holdback period expires.
f. The GST/HST applies to supplies made in Canada of real property, tangible personal property
(that is, goods), intangible personal property (such as intellectual property) and services. "Supply"
means provision of property or service in any manner.
g. The GST/HST on a supply made in Canada is payable by the recipient of the supply to a supplier
who is registered for GST/HST. The supplier is responsible to remit the tax to CRA.
h. A supply is declared to be made in Canada if:
i. for a supply of goods, the goods are made available or delivered in Canada to the recipient
of the supply. This means the goods are in Canada when they are sold and transferred from
the supplier to the purchaser, or they are imported into Canada for the delivery to the
purchaser;
ii. for a supply of intangible personal property, the property may be used in Canada or relate to
real property situated in Canada, to tangible personal property situated in Canada or to a
service to be performed in Canada;
iii. for a supply of real property or a service in respect of real property when the property is
situated in Canada;
iv. for a supply of other services, the service is performed in whole, or in part, in Canada;
v. for a supply of a telecommunications service consisting of making available

telecommunication facilities when the facilities, or any part thereof, are located in Canada.
i. The GST/HST applies also to goods imported into Canada. The GST/HST on the importation of
goods is payable on the duty paid value of the goods (determined under the Customs Act) and is
payable by the importer of the goods directly to Canada Border Services Agency. It is payable at
the time of importation or when the goods are taken out of bond for use.
j. Goods imported into Canada for supply are subject to GST at the time of importation and are
subject to GST/HST when supplied in Canada by a supplier who is registered for GST/HST.
k. The GST/HST also applies to supplies of services and intangible personal properties made outside
Canada (generally by a non-resident supplier) to a person who is resident in Canada, if the person
acquires the supply for use in Canada, but not exclusively in the course of commercial activities.
These supplies are referred to as "imported taxable supplies". The GST/HST on imported taxable
supplies is determined by the Canadian recipient of the supply (self-assessment) and remitted
directly to Canada Revenue Agency (CRA).
l. Lease payments on tangible goods under a lease entered into before August 8, 1989, are not
subject to GST. If a lease for tangible goods is amended to alter its term, or the property is leased
on or after August 8, 1989, then the payments become subject to GST/HST, as applicable.
m. The trade-in of a used good on the purchase of a new good constitutes two separate transactions
for the purposes of the GST/HST. The GST/HST applies to the full sale price of the new good,
regardless of the allowance for the trade-in. Each party must collect GST/HST on the fair market
value of the supply to the other, and both pay the GST/HST. This treatment applies where the
person trading in the used goods on the purchase of new goods is a GST/HST registrant.
n. If the person trading in the used goods is not required to charge tax on the supply (for example,
non-registrant supplier, or goods not used in commercial activities), then the supplier of the new
goods deducts the value of the old goods accepted as a trade-in from the value of the new goods
when determining the GST/HST on the supply.
o. The GST/HST does not apply to: exempt supplies; zero-rated supplies; or certain imports. These
areas are covered in Annex 4.4: Supplies Exempt from Goods and Services Tax/Harmonized
Sales Tax. Also, it generally does not apply to Indian, Indian Bands and Band-empowered
Entities; this is also covered in Annex 4.4: Supplies Exempt from Goods and Services
Tax/Harmonized Sales Tax.
p. The GST/HST does not apply to transactions between parts of the same organization. As the
federal government has registered its departments (those entities listed in Schedule I, Schedule I.I
and Schedule II of the Financial Administration Act), as a single person, the GST/HST does not
apply to transactions between departments. However, the GST/HST will apply to taxable
transactions between departments and Crown corporations.
q. Government-supplied Materiel (GSM) is not subject to additional GST/HST costs, as the

owner/end-user has already paid it. Contractors should not charge GST/HST against the value of
GSM used in the performance of a contract. Foreign-based contractors must identify the GST
separately on Canada Border Services Agency's Form CI1 - Canada Customs Invoice (PDF 429
KB) (http://www.cbsa-asfc.gc.ca/publications/forms-formulaires/ci1.pdf) - (Help on File Formats), describing
them as Canadian goods returned and providing a value. Should GSM be provided from one
foreign-based contractor directly to another, this value should be included in the value of the item
for customs clearance purposes, as this GSM would not have had GST paid yet.
r. The federal government does not pay GST/HST on imported taxable supplies, as the federal
government is not required to self-assess tax. Imported taxable supplies include services
performed wholly outside Canada for use in Canada, or services performed in Canada and
supplied by a non-resident supplier who is not registered for GST/HST purposes. They also
include intangible personal property supplied by a non-resident supplier who is not registered for
GST/HST purposes.
s. The federal government is required to pay tax on importation of goods if it is the importer of
record, unless the goods qualify as non-taxable importations.
5. Taxes and Duties Associated with Payments

This section provides information on the taxes and duties associated with progress and final payments
made to the contractor.
a. After-imposed and after-relieved taxes
i. A contract price will be increased by the actual amount of any after-imposed taxes,
provided the contractor forwards to the contracting officer a certified statement, showing
that the increase in cost is directly attributable to the after-imposed taxes, and that no
amount for such newly imposed taxes was included in the contract price.
ii. A contract price will be decreased by the actual amount of any after-relieved taxes.
b. After-imposed and after-relieved duties – firm price contract
i. Provision for price adjustments, upward or downward, may be made in firm price contracts,
in the event that changes in duties, which affect the cost of the work to the contractor, are
made after the contract date.
ii. The contract price must be increased by the actual amount of any after-imposed duties,
provided the contractor forwards to the contracting officer a certified statement, showing
that the increase in cost is directly attributed to the after-imposed duties, and that no amount
for such newly imposed duties was included in the contract price.
iii. The contract price must be decreased by the actual amount of any after-relieved duties.
c. Excise taxes: the general conditions provide for contract price, in the event of changes in duties,
excise taxes, charges and impositions after the contract date.
6. Taxes and Duties Associated with Customs and Imports/Exports

This section provides information relevant to customs, imports/exports, drawbacks and taxes and duties.
a. Excise taxes, duties and GST/HST
i. Excise taxes are payable on certain goods (see Annex 4.5: Goods Subject to Excise Tax.)
A. When goods are manufactured or produced and sold in Canada, the excise tax is
payable by the manufacturer or producer, at the time of delivery of such goods.
B. When goods are imported, the excise tax is payable by the importer or transferee,
who takes the goods out of bond, at the time of importation or when taken out of
bond for consumption.
ii. Federal government contract enquiries regarding excise taxes and duties; including those
relating to rates, exemptions, refunds, other methods of valuation, prohibited items, and
other applications of legislation concerning excise taxes and duties, should be referred to
the nearest Canada Border Services Agency (CBSA) office.
iii. Federal government contract enquiries related to the GST/HST, Defence Supplies
Remission of Customs Duty and Federal/Provincial Reciprocal Tax Agreements should be
referred to the Acquisitions Program Policy Directorate.
b. Customs duty
i. Imported goods are charged with duties from the time of importation. The rates of duties on
imported goods will be the rates applicable to the goods at the time when the
documentation is presented to obtain release of the goods from CBSA.
ii. The primary basis for determining the value of duty on imported goods is the Transaction
Value System of Valuation, which is generally the invoice price (see Memorandum D13-3-1
(http://www.cbsa-asfc.gc.ca/publications/dm-md/d13/d13-3-1-eng.html) from CBSA). For assistance,
contact the CBSA Business Enquiry and Registration.
iii. If this method cannot be used, contact the nearest CBSA office.
c. Drawbacks and duties relief
i. Drawbacks and duties relief programs are intended to help exporters become and remain
more competitive in foreign markets, by granting them relief from the duties and taxes paid
in respect of:
A. goods imported and then exported before any use is made of those goods;
B. goods imported and used in the manufacture in Canada of goods that are exported; or
C. materials imported and consumed or expended in the manufacture in Canada of

exported goods.
ii. The Duty Deferral Program grants relief from duties on imported goods that are exported
either in the same condition or after having been manufactured. Those goods qualify for
relief from the customs duties, anti-dumping and countervailing duties, and excise duties
and taxes other than the GST. Relief is granted at the time the goods are imported. For more
information, see Memorandum D7-4-1 (http://www.cbsa-asfc.gc.ca/publications/dm-md/d7/d7-4-1-
eng.html) .
iii. The Duty Drawback Program has similar characteristics and advantages as the Duties
Relief Program, with the exception that duties and taxes must be paid at the time of
importation and are refunded after the goods have been exported. For more information, see
Memorandum D7-4-2 (http://www.cbsa-asfc.gc.ca/publications/dm-md/d7/d7-4-2-eng.html) .
7. Remission of Customs Duty for Defence Supplies
a. Remission of customs duty payable (for more information, see Memorandum D13-3-1
(http://www.cbsa-asfc.gc.ca/publications/dm-md/d13/d13-3-1-eng.html) ) is granted under the Tariff Item
No. 9982.00.00 when:
i. the total contract value of the defence supplies is $250,000 or more. This reflects the import
value of the goods plus the duty that would be applicable in the absence of the customs
tariff;
ii. the goods are certified by Public Works and Government Services Canada ( PWGSC) to be
defence supplies;
iii. for more information, see Memorandum D8-9-3 (http://www.cbsa-asfc.gc.ca/publications/dm-

md/d8/d8-9-3-eng.html) .
b. Since duty rates vary depending on the type of product, country of origin and mix of imported
components, it may be difficult to decide whether the defence supply is subject to the tariff.
Where there is uncertainty as to whether the total estimated expenditure would exceed
the $250,000 threshold, contracting officers should request prices with customs duty identified as
a separate item.
c. When the party responsible for importation is other than the Department of National Defence
(DND), a copy of the following certification must be attached to the contract.
CERTIFICATE FOR DEFENCE SUPPLIES
I certify that the items purchased under contract number____________ are "defence supplies", as
defined in the Defence Production Act, pursuant to Tariff Item No. 9982.00.00.
Approved by Authorized Officer:
Signature ___________________
Date _______________________
Title _______________________
The only proof acceptable to the Canada Border Services Agency (CBSA) from the contractor
that the import is a defence supply is a copy of the certification.
d. A copy of the certification may be requested by the DND Director Supply Chain Operations /
Customs, or by the investigating Regional Compliance Verification Division of the CBSA. These
parties investigate claims for remission and may contact the contracting officer to verify the
claim.
e. When DND is the party responsible for importation, a copy of the contract for defence supplies is
accepted by the CBSA, as sufficient proof for remission. A copy of the certification for defence
supplies does NOT need to be attached to the awarded contract.
f. When the total estimated value of a standing offer exceeds $250,000, each call-up is subject to the
Tariff Item No. 9982.00.00.
8. Duty and the GST/HST on Tools, Equipment or Spare Parts in Contracts for Services by Non-residents
a. Customs duty and the GST/HST, as applicable, may be imposed on any tools, equipment or spare
parts that are brought into Canada by non-resident personnel performing certain services under a
PWGSC contract. When assessed, such duties and the GST/HST are payable to the CBSA.
b. The following interpretation of applicable regulations is intended as background information only.

If necessary, specific questions relating to actual cases should be directed to the nearest regional
CBSA Office. The application or relief of customs duty and the GST/HST is stated in each item
below in italics:
i. a non-resident worker entering Canada with personal tools or other equipment to erect,
install or repair machinery or other plant equipment, the said worker being sent here by the
foreign manufacturer of the machinery or plant equipment, may import the tools or other
equipment under authority of the Temporary Importation (Tariff Item no. 9993.00.00)
Regulations. For more information, see CBSA Memorandum D8-1-1 (http://www.cbsa-
asfc.gc.ca/publications/dm-md/d8/d8-1-1-eng.html) ;
(Full relief of customs duty. The GST/HST is payable on 1/60 thof the value of the tools
and/or equipment for each month the goods remain in Canada.)
ii. a non-resident worker entering Canada with tools or other equipment supplied by the
manufacturer of the machine to be erected, installed or repaired may bring the tools or other
equipment into Canada on a 1/60 th basis under the Temporary Importation (Tariff Item
No. 9993.00.00) Regulations. For more information, see Memorandum D8-1-1
(http://www.cbsa-asfc.gc.ca/publications/dm-md/d8/d8-1-1-eng.html) ;
iii. a non-resident worker entering Canada with tools or other equipment to repair, erect or
install machinery or other equipment, when the contract is with a foreign-based supplier,
which is not the manufacturer of the machinery or other equipment;
(Full customs duty will apply. The GST/HST is also payable on full value where there is no
relief available under any other provision ([for example, Canadian Goods Returned])
iv. duty and the GST/HST are levied on all spare parts at the time of entry. Following the
export from Canada of the balance of the unused spare parts under CBSA supervision, a
drawback claim may be filed for return of the customs duty applicable to the unused spare
parts under authority of the Goods Imported and Exported Drawback Regulations.
(The GST is not refundable.)
c. Contracts for the services in Canada of a non-resident must contain a provision, which instructs
the non-resident contractor, its employees or a subcontractor and its employees, to comply with
CBSA's requirements and to pay customs duties, excess taxes and the GST/HST, as applicable.
d. If it is anticipated that a non-resident may be required to import tools, equipment or spare parts to
perform services in Canada, Standard Acquisition Clauses and Conditions(SACC) Manual clause
C2604C must be used.
e. When customs duties, excise taxes and GST/HST associated with payment or customs and
imports/exports apply, see Chapter 8 - Contract Management.
9. Duty and GST/HST on the Repair and Overhaul of Canadian Goods Abroad
a. The treatment of Canadian goods returning to Canada, having been repaired or overhauled
abroad, varies depending on the country where the repair or overhaul is done. Where the country
is a free trade partner country, the goods return to Canada under the provisions of Tariff Item
No. 9992.00.00; or in the case of vessels, Tariff Item No. 9971.00.00. The policy and procedures
relating to the administration of these tariff items are outlined in CBSA Memorandum D8-2-26
(http://www.cbsa-asfc.gc.ca/publications/dm-md/d8/d8-2-26-eng.html) and Memorandum D8-2-25

(http://www.cbsa-asfc.gc.ca/publications/dm-md/d8/d8-2-25-eng.html) , respectively. When the country is not a
free trade partner country, the goods may be entitled to the provisions of the Canadian Goods
Abroad Program contained in sections 101-105 of the Customs Tariff. Under certain conditions,
subsection 101(1) of the Customs Tariff provides full customs duties and GST/HST relief on the
Canadian export value of goods when the goods are returned to Canada. The policy and
procedures relating to the administration of this program are outlined in CBSA Memorandum D8-
2-1 (http://www.cbsa-asfc.gc.ca/publications/dm-md/d8/d8-2-1-eng.html) .
b. Goods imported under Tariff Item Nos. 9992.00.00 and 9971.00.00 are customs duty free. Under
the Canadian Goods Abroad Program, customs duties are owed on the value of the repair or
overhaul. Whichever provision is used to account for the customs duties, GST is owed on the
value of the repair or overhaul, unless it is done under a warranty arrangement.
c. The goods qualify for Tariff Item Nos. 9992.00.00 and 9971.00.00 if the following conditions are
met:
i. the required documents are submitted according to the Tariff Item Nos. 9971.00.00 and
9992.00.00 Accounting Regulations (see CBSA Memorandum D8-2-25 (http://www.cbsa-
asfc.gc.ca/publications/dm-md/d8/d8-2-25-eng.html) and Memorandum D8-2-26 (http://www.cbsa-
asfc.gc.ca/publications/dm-md/d8/d8-2-26-eng.html) ), including an invoice and proof of export;
ii. the invoice or written statement from the foreign processor should include the value of the
repair or alteration;
iii. proof of export can be a customs or transportation document, an exporter declaration, or

other documents, set out in the Regulations, which describe the goods sufficiently, to
establish that the re-imported goods are the same goods that were exported. Records of the
make, model, and serial numbers help identify the goods.
d. The goods qualify under the Canadian Goods Abroad Program where:
i. the goods are documented in a manner acceptable to the CBSA;
ii. the CBSA is satisfied that the repair or overhaul could not have been done in Canada; and
iii. the goods are returned to Canada within 12 months from the day on which they are
exported.
e. Contracting officers should verify:
i. that no claim for drawback has been paid in respect of the goods temporarily exported; and
ii. in the case of the Canadian Goods Abroad Program, that repair facilities are not available
within a reasonable distance in Canada.
f. The CBSA imposes different requirements, depending upon the type of work carried out abroad,
and may accept a verbal declaration from the consignee, or PWGSC, that proper facilities are not
available to do the repairs or overhaul within a reasonable distance in Canada.
g. In addition, Canadian and US government agencies establish lists of approved repair suppliers for
certain articles for use at defence establishments that are manufactured to rigid specifications. In
such cases, if no Canadian-based supplier is approved to perform the repairs, this will be accepted
as satisfactory evidence that the repairs could not be made in Canada.
h. When calculating duty and the GST/HST on the service performed abroad, the pricing factors to
be taken into consideration are: the cost of the material used; the cost of labour; factory overhead;
and a normal profit mark-up. The value for duty remains the same, even where the repair is done
under a warranty arrangement, and there is no charge made for the repair or overhaul.
i. Where it is not possible to repair the goods, and they are replaced under a warranty arrangement,
the replacement goods are subject to full customs duties, but under Section 5 of Schedule VII to
the Excise Tax Act are non-taxable for GST purposes.
j. There is no GST/HST payable on goods imported after having been exported for warranty repair
work. This is provided for under paragraph 3.(j) of the Non-Taxable Imported Goods (GST/HST)
Regulations.
10. Duty and GST/HST on Canadian Goods Returned
a. The following paragraphs discuss the application of duty and GST/HST for goods that are re-
imported into Canada after having been exported for reasons other than for repairs, equipment
additions, or work done abroad.
i. Customs duty does not apply to Canadian goods returned from abroad without having been
advanced in value or improved in condition by any process of manufacture or other means,
or combined with any other article abroad. For more information, see CBSA
Memorandum D10-14-11.
For more information on the application of the GST/HST, see CBSA Customs Notice CN-
118.
ii. Articles to be tested only and not adjusted, altered or enhanced in value in any way in
conjunction with, or as a result of, a test regardless of whether a charge is made for the test.
iii. Customs duty and the GST/HST do not apply to Canadian government-owned munitions
and supplies of war, on their return from abroad to a department or agency of the
government. This is not intended for the remission of the duty and the GST/HST on goods
that have been purchased by government departments and agencies, specifically for import
into Canada. It applies only to munitions and military stores being shipped to departments
or agencies of the government from a Canadian Armed Forces Establishment abroad. For
more information, consult section 27 of the CBSA Memorandum D10-14-11.
11. Reciprocal Taxation Agreements and Comprehensive Integrated Tax Coordination Agreements
a. The federal government has agreed to pay, directly or indirectly, most provincial and territorial
taxes on the goods and/or services it purchases, as set out in the general conditions of the
Standard Acquisition Clauses and Conditions Manual. The federal government does not pay the
general Provincial Sales Tax (PST). In addition, when the department or agency is a supplier, it
must collect and remit PST to the province.
b. The Treasury Board (TB) ARCHIVED - Policy on the Collection and Remittance of Provincial
Sales Taxes (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/tbm_142/PST1-2E.asp) includes all the information
that may be required by contracting officers to comply with the Application of Reciprocal
Taxation Agreements (RTAs) and Comprehensive Integrated Tax Coordination Agreements
(CITCA). ARCHIVED - Appendix C - Details of the Reciprocal Taxation Agreements and
CITCA by Province and Territory (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12198&section=text#appC) , of
the same policy, also provides details of the RTA and CITCA by province and territory.
Contracting officers should also consult the TB ARCHIVED - Policy on the Application of the
Goods and Services Tax and Harmonized Sales Tax in the Departments and Agencies of the
Government of Canada (http://www.tbs-sct.gc.ca/Pubs_pol/dcgpubs/TBM_142/gst_hst_fis_e.asp) .
Provinces and territories are grouped as follows:
i. the provinces that have not entered into a RTA are considered "non-partaking"and at the
present time, the only non-partaking provinces are Alberta and New Brunswick;
ii. a non-participating province is a province that did not enter into a CITCA and at the present
time, the non-participating provinces include all provinces and territories, except New
Brunswick, Nova Scotia and Newfoundland and Labrador (the participating provinces);
iii. the PST is paid in non-participating provinces by Crown corporations, except in Alberta,
Northwest Territories, Yukon and Nunavut, where there is no PST;
iv. federal departments pay the Harmonized Sales Tax (HST), ancillary taxes and reimburse
tax on third party purchases in the participating provinces;
v. when federal departments and Crown corporations are suppliers, they must charge, collect
and remit HST when the goods or services are delivered or rendered in a participating
province.
c. Crown corporations are not covered by the RTA s, and are required to pay PST on their purchases,
for delivery to or consumption in the partaking provinces, on the same basis as companies in the
private sector. Crown corporations may not use the license numbers or certificates in the RTAs.
HST is paid in the participating provinces.
Some Crown corporations hold their own special PST licences, which enable them to purchase
goods and services, for their own use, free of PST at the time of purchase.
d. Persons selling to federal departments may not quote the federal government's license numbers to
their own suppliers.
e. Contracting officers should take special care when dealing with the following:
i. ancillary taxes: The federal government has agreed to pay certain ancillary provincial taxes.
These taxes apply to specific goods and services, and their applicability varies from
province to province. In addition, departments will reimburse third parties for PST paid for
goods or services purchased on behalf of a department or during work-related travel;
ii. fuel taxes: Liquid fuels may be taxed in certain provinces under the provincial fuel tax or
under provincial retail sales tax, depending on the end use. Under certain circumstances,
liquid fuel may be exempt from provincial tax;
iii. construction contracts: In all contracts for the construction or repair of a building or
structure, the contractor is declared to be the consumer of any materials used. The
contractor usually is not registered as a supplier, and must pay tax on purchases of
materials. PST is an element of cost to the contractor, and as such is included in the price to
PWGSC. No further PST is imposed on the transaction between the contractor and
PWGSC.
f. Construction contracts should not contain a mix of "real property" and "tangible personal
property". If unavoidable, the use of the license numbers applies only to the acquisition of the
"tangible personal property" component of the requirement.
g. In contracts for the supply and installation of equipment that remains free standing, and is affixed
to a building or structure for purposes other than providing a direct service to such building or
structure, the PST is not to be included in the contract price, and the license number or certificate
should be quoted in the contract. In New Brunswick, such contracts are treated as real property
contracts and, therefore, are subject to the procedure, outlined in the preceding paragraph.
12. United States Sales Tax, Use Tax and Personal Property Tax
a. When there is a possibility that United States-based suppliers may be submitting responses,
contracting officers must specify in the solicitation that prices do not include any United States
Sales Tax or Use Tax, from which exports are exempted. Any resulting contract awarded to a
foreign-based contractor must include SACC Manual clause C2000C.
b. Items exported from the United States of America (U.S.A.) by the purchaser, are entitled to
exemption from state Sales and Use Taxes. Care should be taken to ensure that such procurements
are not taxed in error.
c. Particular care is required in dealing with the State of California, which has Sales, Use and
Personal Property taxes that may affect PWGSC procurement.
d. In these procedures, the State of California is highlighted because of its stringent tax
requirements. Similar precautions should be taken to deal with requirements in the other states.
e. California Sales and Use taxes (Cal Tax) are collected by the seller from the purchaser and, if
applicable, will require the contract to provide for payment of the tax. The Use Tax is not payable
on items for which Sales Tax is payable.
f. Items exported outside the State by the purchaser are exempt from Cal Tax but, as California law
is very precise about what constitutes an export, contracting officers should ensure that
procurement in California is considered an export by the State.
g. For example, goods may not be subject to Cal Tax if:
i. they are delivered California FCA Free Carrier (...named place) with title passing upon
such delivery, and are shipped to a point outside California; or
ii. title passes at time of delivery, and the goods are delivered by the seller to a conveyance
furnished by the purchaser (for example, where they are picked up by the Canadian Armed
Forces), and are shipped to a point outside the U.S.A.
h. California Personal Property tax is assessed against work-in-process, finished work and baled
items, title to which is vested in either PWGSC or the contractor, which are located in California
at 12:00 o'clock noon on the first Monday in March on an annual basis. It is immaterial whether
such items relate to a fixed price or cost reimbursable type of contract.
i. Contracting officers should confirm the manner in which California contractors charge the
Personal Property Tax on PWGSC contracts. If the tax is charged as a direct charge to the
PWGSC contract, there should not also be an indirect charge, and overhead should not be applied
to the direct charge.
j. Another area for particular attention is the use of progress payments or advance payments.
California taxes may be payable when ownership is transferred to the purchaser - and this transfer
of ownership may be declared by the State to take place when the progress payment or advance
payment is made. Contracting officers should ensure that ownership is not transferred until the
goods are delivered.
13. Purchases from the State of California
a. The State of California has a sales and use tax, which a supplier must apply to goods when title to
the goods is transferred to the purchaser in the State and the goods will be used in the State.
However, imports and exports are not taxed. The use tax is the same as the sales tax but the use
tax is the one that applies when the goods are purchased by an out-of-state entity for use in the
state.
b. To be exempt as an export, the good sold must be intended for a destination in a foreign country
and actually delivered to the foreign country before making any use of the property. This means
that the sales and use tax will not apply when the good pursuant to the contract is shipped to
Canada. Therefore, if Canada desires to have title to the goods transferred in California, the
contract must state that the goods are to be shipped to Canada and are for use in Canada only.
Canada can still take title in California and also be responsible for loss of goods during transport.
c. If the contract provides for progress or advance payments or if the goods are to be left in
California for a period of time, Canada's normal contract provisions would cause the sales and use
tax to be payable since ownership would be transferred to Canada before delivery of the goods.
Therefore, in order for Canada to avoid paying this sales tax, it must ensure that ownership will
not be transferred until delivery of the goods.
d. To avoid paying the use tax inappropriately, the following SACC Manual clauses should be
included in the contract: D4003C, C2002C and K9010C.
Annex 4.4: Supplies Exempt from Goods and Services Tax/Harmonized Sales Tax
(2015-02-25)
1. Overview
An exempt supply is not taxable. Thus, a supplier does not collect the Goods and Services Tax or the
Harmonized Sales Tax (GST/HST) on sales of exempt supplies. The supplier is not eligible for any
input tax credits on purchases related to the exempt supply. As a result, the supplier passes on to the
consumer the GST/HST that the supplier has paid, as part of the overhead. This is where exempt
supplies differ from zero-rated supplies. The following are exempt supplies.
a. Health and dental services (only services performed for medical or reconstructive purposes are
exempt. Services performed for cosmetic reasons are not exempt.) This includes:
i. hospital and nursing home services;
ii. medical devices prescribed by a medical practitioner **;
iii. diagnostics, treatments and other health care services prescribed by a medical practitioner;
iv. ambulance services;
v. nursing services;
vi. dental hygienist services.

**A medical practitioner is a person who is entitled under the laws of a province to practise
the profession of medicine or dentistry.
b. Day care services for children less than 15 years old.
c. Personal care services in an institution for children or disabled or underprivileged persons.
d. Legal aid services. That is, the person receiving the services pays no GST/HST. The lawyer
performing the service bills the legal aid plan and charges GST/HST.
e. Most educational services. This includes virtually everything associated with primary or
secondary education, including tutoring. Most other educational services are exempt, except for
those that are purely recreational in nature. University and college meal plans are also exempt.
f. Most supplies by charities and many supplies of a public service nature by public service bodies.
These are exempt except for exclusions given in Schedule V, Part VI, section 2 of the Excise Tax
Act. Example: The sale by a charity of property acquired for resale and any service in connection
with it are not exempt (2(e)). Most universities in Canada are charities for the purposes of the
GST/HST, and therefore their supplies are generally exempt.
g. Most financial services provided in Canada.
h. Long-term residential rents and sales of used housing.
2. Zero-Rated Supplies
a. Zero-rated supplies are taxable supplies on which the tax rate is 0 percent. Persons involved in the
production of zero-rated supplies can claim input tax credits on the supplies they use. This
ensures that there is no GST/HST paid by the consumer. The following are zero-rated supplies.
i. Goods and services supplied or to be supplied to a purchaser outside of Canada.
ii. Basic groceries, except soft drinks, candies and confections and snack foods.
iii. Agriculture and fisheries products, except the following:
A. cut flowers, foliage or trees;
B. bedding plants;
C. sod;
D. soil and soil additives;
E. seeds, in quantity ordinarily sold or offered to consumers;
F. natural fertilizer, unless sold in bulk;
G. wood;
H. horses;
I. wool other than in an unprocessed state;
J. fur and animal hide.
b. Prescription drugs for human use, dispensed by a medical practitioner or on the prescriptions of a
medical practitioner for the personal use of the recipient or a related individual.
c. Medical devices (includes replacement parts and charges for installation and repair).
d. International freight services. This includes freight outbound from Canada and freight into
Canada from outside. Freight from one part of Canada to another is included if it is part of a
continuous movement into or from Canada.
3. Non-taxable Importations
a. Non-taxable importations under the GST/HST refers to certain imports listed in Schedule VII of
the Excise Tax Act. No tax is paid on the importation of these supplies.
b. Certain goods, which are exempt from customs duties; for example, foreign-based conveyances
coming into Canada, settler's effects, foreign diplomat's effects, tourist's baggage, foreign
purchases brought back by returning residents.
c. Prizes and trophies won abroad (other than saleable goods, such as an automobile).
d. Tourist literature supplies by foreign governments or like organizations, which is to be distributed

for free.
e. Goods donated to charities.
f. Warranty replacement parts.
g. Zero-rated supplies in Section 2 of Part I or in parts Il, Ill, IV, or VIII of Schedule VI of the Excise
Tax Act.
h. Imported goods valued at under $20 when delivered by mail or courier. This parallels current
customs remission orders and like them does not cover alcohol, tobacco, etc.
i. Prescribed imports. Provision is made for granting relief from GST/HST on importation of goods
by way of regulations of the Governor in Council.
4. Indians, Indian Bands and Band-empowered Entities
a. Canada Revenue Agency Technical Information Bulletin B-039R3, GST/HST Administrative

Policy - Application of GST/HST to Indians, sets out Canada Revenue Agency's (CRA)
guidelines concerning the treatment of purchases made by Indians, Indian bands and band-
empowered entities (BEEs). The conditions described therein must be satisfied for tax relief to
apply (e.g., an Indian must present proof of registration under the Indian Actto a vendor in order
to acquire goods or services on reserve without the payment of GST/HST.
b. Generally, GST/HST does not apply to:
i. goods acquired on reserve by Indians, Indian bands or BEEs;
ii. goods acquired off reserve by Indians, Indian bands or BEEs, where the vendor or the
vendor's agent delivers the goods to the reserve;
iii. services performed totally on reserve where they are acquired by Indians;
iv. services performed on or off reserve, such as legal or accounting services, where they are
acquired by Indian bands or BEEs for band management activities or for real property on
reserve (exception: Indian bands or BEEs pay GST/HST on off-reserve purchases of
transportation, short-term accommodation, meals and entertainment and recover the
GST/HST paid through a rebate mechanism if the purchases are for band management
activities or for real property on reserve);
v. services acquired by Indians for real property interests on a reserve.
c. Unincorporated Indian-owned businesses receive the same tax relief on the acquisition of goods
and services as that of their Indian owner. Indian-owned corporations are treated like all other
businesses and are required to pay GST/HST on their purchases unless they qualify as BEEs and
the conditions set out in Technical Information Bulletin B-039R3, are met.
d. Indian bands and BEEs (e.g., band-run schools and hospitals) may also be entitled to file the
applicable Public Service Body Rebate to recover a partial rebate on any remaining GST/HST
paid. Funding provided by Indian bands to non-profit organizations is the same as government
funding to qualify for the 50 percent GST/HST rebate to non-profit organizations.
Note: Indian-owned businesses are required to collect and remit GST/HST on the supply of
taxable goods and services to non Indians on or off a reserve.
Annex 4.5: Goods Subject to Excise Tax

(2010-01-11)
1. Petroleum Products
a. gasoline: gasoline, aviation, unleaded aviation, and unleaded
b. fuel: diesel and aviation
2. Automobiles
a. automobiles (not including ambulances) in excess of 2,007 kg; station wagons and vans in excess
of 2,268 kg
b. air conditioners designed for use in automobiles, station wagons, vans or trucks
3. Jewellery, Watches
a. jewellery, real or imitation; certain goldsmiths' and silversmiths' products
b. clocks and watches, which the duty paid value exceeds $50
4. Others
a. amusement devices: coins, discs or token operated games
b. cigarettes and manufactured tobacco
c. cigars
d. lighters (cigarette)
e. matches
f. playing cards (per pack)
g. wines
Insurance premiums on policies placed with unlicensed insurers or through non-resident brokers or
agents.
Annex 4.6: Ontario Labour Legislation

(2010-01-11)
1. Overview
a. On November 5, 1992, Ontario Bill 40 received royal assent. Included in the legislation were
certain amendments to the Employment Standards Act (ESA) intended to protect the jobs and the
level of benefits of workers who work primarily at one specific site to provide building cleaning,
food and security services.
b. Although the federal government is not bound by provincial legislation, contractors bidding on
federal government work are subject to the Act and any amendments. Canada, as building owner,
has an information-handling role under this legislation.
c. Treasury Board Contracting Policy requires departmental contracting authorities to observe the
intent of the Ontario labour legislation, and, in practice, to follow its provisions.
d. On November 1995, Ontario Bill 7 received royal assent. It amended Ontario Bill 40 by repealing
Part XIII.2, "Successor Employers", of the ESA and adding section 13.1 'Successor Employers'.
The Ontario Regulation 138/96 sets out successor employer exemptions from compliance with
Part XIV of the ESA(termination and severance provisions) and the type of information that
building owners or managers may obtain from incumbent contractors and provide to prospective
bidders or successor employers. The Employment Standards Act (R.S.O. 1990, c. E14) was
repealed and replaced by the Employment Standards Act, 2000 (http://www.e-
laws.gov.on.ca/html/statutes/english/elaws_statutes_00e41_e.htm) (ESA 2000) and the Ontario Regulation
138/96 (http://www.e-laws.gov.on.ca/html/revokedregs/english/elaws_rev_regs_960138_e.htm) was superseded by
Ontario Regulation 287/01 (http://www.e-
laws.gov.on.ca/html/source/regs/english/2001/elaws_src_regs_r01287_e.htm) . ESA 2000 came into force on
September 4, 2001, and governs employment standards entitlements arising out on or after that
date.
e. Employment Standards Act, 2000 (http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_00e41_e.htm)

Section 77(1) applies to contracts for building cleaning, food catering and security services which
are provided at a specific premise directly or indirectly by or to a building owner manager in the
province of Ontario, and which commenced on or after 31 October 1995. Not included are
construction, maintenance, such as snow removal, lawn care, window cleaning, and the
production of goods, other than goods related to the provision of food services at the premises for
consumption on the premises.
2. Expiry of Existing Contract
a. Contracting officers must obtain from the outgoing contractor the following information as set out
in Ontario Regulation287/01 for each employee providing services at the premises, preferably
four months before the completion date of the existing contract:
i. the employee's name, residential address, and telephone number;
ii. the employee's job classification or job description, wage rate, benefits, average weekly
hours and initial hire date;
iii. the number of weeks worked in the preceding 26 weeks (or a longer period if services were
temporarily discontinued or an employee was on pregnancy or parental leave);
iv. a statement indicating whether the employee was not primarily employed at the premises
during the 13 weeks before the request date or during the most recent 13 weeks of active
employment.
In addition to the above information, the contractor must provide, within seven days following a
request from the contracting officer, an up-to-date copy of the collective agreement, or a copy of
the union certificate or a copy of any pending union application if it exists.
b. The information should be obtained by filling out form PWGSC- TPSGC 5116 (http://www.tpsgc-
pwgsc.gc.ca/app-acq/forms/formulaires-forms-eng.html) , Information on Incumbent Employees. Copies of
the form could be attached to the letter proposed for obtaining information from the outgoing
contractor. When contracts contain a provision for obtaining information, a suggested letter is
provided for this purpose at Exhibit A 4.6.1: Proposed Letter - Requesting Information from
Outgoing Contractor (with a clause). If contracts do not contain a provision for obtaining this
information, the suggested letter at Exhibit B 4.6.2: Proposed Letter - Requesting Information
from Outgoing Contractor (no clause)should be used.
3. Bid Solicitation
a. In accordance with the Ontario labour legislation, information concerning each employee of the
previous supplier, with the exception of his/her name, residential address and telephone number,
must be provided to potential bidders in the bid solicitation for building cleaning, food catering
and security services.
b. Contracting officers must include Standard Acquisition Clauses and Conditions (SACC) Manual
clause A0075T in their bid solicitation. The clause informs the bidder of the requirements of Bill
7 and the purpose to which information required under Bill 7 should be used.
4. Contract Award
a. After contract award, the name, residential address and telephone number of each employee as
they appear in the previous employer's records must be provided to the successful bidder.
b. Contracting officers must include SACC Manual clause A0075C in their contract. The clause
informs the contractor of its obligation to keep employee's records up to date and to provide the
information, upon request, to the contracting officer, in accordance with the Ontario labour
legislation.
c. It is important to remember that there is no onus on the PWGSC to mediate between the outgoing
and incoming contractors in the event that the information provided is incomplete or erroneous. If
there are any difficulties, enquiries should be referred to the local Ontario Ministry of Labour
offices (http://www.labour.gov.on.ca/english/about/reg_offices.php) for resolution.
d. Performance problems require prompt follow up action and reporting, preferably in writing, to the
contractor. Written reports should identify the location, date, situation or circumstances
surrounding the performance difficulties. The contractor is responsible for remedying the situation
or improving the performance as required.
Exhibit A 4.6.1: Proposed Letter - Requesting Information from Outgoing Contractor

(with a clause)
(2010-01-11)
Dear _______________(insert name of contractor),
As you are aware, contract ___________(insert contract no .) for the provision of

____________(insert type of building-related services) will expire on
____________(insert date).
Pursuant to the clause included in the above-noted contract, you are hereby required to provide, within
seven days of the date of this letter, the following information with respect to your current employees at these
premises and providing the services performed under this contract:
a. the employee's name, residential address and telephone number;
b. the employee's job classification or job description;
c. the wage rate actually paid to the employee;
d. a description of the benefits, if any, provided to the employee including the cost of each benefit and the
benefit period to which the cost relates;
e. the number of hours that the employee works in a regular work day and in a regular work week; or if the
employee's hours of work vary from week to week, the number of the employee's non-overtime hours
for each week that the employee worked during the thirteen (13) weeks before the date of the request for
information;
f. the date on which the employer hired the employee;
g. any period of employment attributed to the employer under section 10 of the Act;
h. the number of weeks that the employee worked at the premises during the twenty-six (26) weeks before
the request date. The 26-week period must be calculated without including any period during which the
provision of services at the premises was temporarily discontinued, or during which the employee was
on leave of absence under Part XIV of the Act;
i. a statement indicating whether:
i. the employee's work, before the request date, included the provision of services at the premises,
but the employee did not perform his or her job duties primarily at those premises during the
13 weeks before the request date; or
ii. the employee's work included the provision of services at the premises, but the employee was not
actively at work immediately before the request date, and did not perform his or her job duties
primarily at the premises during the most recent 13 weeks of active employment.
In addition to the above information, you are required to provide an up-to-date copy of the collective agreement
regarding the employees at the premises, or, if no collective agreement exists for these premises, a copy of the
union certificate regarding these employees or, if no union certificate was issued, a copy of any pending union
application, if it exists.
You are also required to provide to the Contracting Authority with updated information if changes occur
between the date the requested information to the Contracting Authority is provided and the expiry date of the
contract.
All information must be provided using form PWGSC- TPSGC 5116 or any other form as directed by the
contracting authority. With the exception of (a), this information will be provided to potential bidders for a
future contract for these services relating to the premises. The name, residential address and telephone number
of each employee must only be given to the successful bidder.
Signed by:
________________________
Contracting Authority
Exhibit B 4.6.2: Proposed Letter - Requesting Information from Outgoing Contractor (no
clause)
(2010-01-11)
Dear _______________(insert name of contractor),
As you are aware, contract ___________(insert contract no.) for the provision of
____________(insert type of building-related services) will expire on
____________(insert date).
Pursuant to the laws of the province of Ontario, you are hereby requested to provide the following information
with respect to your current employees at these premises and providing the services performed under this
contract:
a. the employee's name, residential address and telephone number;
b. the employee's job classification or job description;
c. the wage rate actually paid to the employee;
d. a description of the benefits, if any, provided to the employee including the cost of each benefit and the
benefit period to which the cost relates;
e. the number of hours that the employee works in a regular work day and in a regular work week, or if the
employee's hours of work vary from week to week, the number of the employee's non-overtime hours
for each week that the employee worked during the thirteen (13) weeks before the date of the request for
information;
f. the date on which the employer hired the employee;
g. any period of employment attributed to the employer under section 10 of the Act;
h. the number of weeks that the employee worked at the premises during the twenty-six (26) weeks before
the request date. The 26-week period must be calculated without including any period during which the
provision of services at the premises was temporarily discontinued, or during which the employee was
on leave of absence under Part XIV of the Act;
i. a statement indicating whether:
i. the employee's work, before the request date, included the provision of services at the premises,
but the employee did not perform his or her job duties primarily at those premises during the
thirteen (13) weeks before the request date; or
ii. the employee's work included the provision of services at the premises, but the employee was not
actively at work immediately before the request date, and did not perform his or her job duties
primarily at the premises during the most recent thirteen (13) weeks of active employment.
In addition to the above information, you are required to provide an up-to-date copy of the collective agreement
regarding the employees at the premises or, if no collective agreement exits for these premises, a copy of the
union certificate regarding these employees or, if no union certificate was issued, a copy of any pending union
application, if it exists.
With the exception of (a), this information will be provided to potential bidders for a future contract for these
services relating to the premises. The name, residential address and telephone number of each employee must
only be given to the successful bidder.
Your reply is requested no later than _____________(insert date).
Signed by:
________________________
Annex 4.7: Insurance Clauses

(2010-01-11)
A. Type of Risk - Lease of motor vehicles by Canada
Number Description
G6001C Vehicles - Long Term Lease

G6005C Short Term Lease
B. Clauses below must be used in all contracts as applicable
Number Description
G1001C Insurance Requirements - when there are insurance requirements in the contract
G1005C Insurance - when there are no insurance requirements in the contract
G1007T Insurance Requirements - when proof of insurance is required either at solicitation closing or
upon request from the contracting officer
Risk concerning
B.1. Loss or Damage to Government Property
Number Description
G3001C All Risk Property Insurance

G3002C Marine Hull Insurance
G3003C Aircraft Hull Insurance
G3005C Comprehensive Crime Insurance
G3010C All Risk in Transit Insurance
B.2. Third Party Liability
Number Description
G2001C Commercial General Liability Insurance
Depending on the requirement, one or more of the following clauses may also need to be included in the bid
solicitation and contract.
Third Party Liability - Special Risks
Number Description
G2002C Errors and Omissions Liability Insurance

G2004C Medical Malpractice Liability Insurance
G2020C Automobile Liability Insurance
G2030C Aviation Liability Insurance
G2040C Environmental Impairment Liability Insurance
G2050C Bailee's Customer's Goods Insurance
G2052C Warehouseman's Legal Liability Insurance
G4001C Aircraft Charter Insurance
G5001C Ship Repairers' Liability Insurance
G5003C Marine Liability Insurance
G6002C Garage Automobile Liability Insurance
Annex 4.8: Insurance of Government-owned or Leased Vehicles

(2010-01-11)
1. Government-owned Vehicles
Country Period Policy Requirement
CANADA Long-term Self-underwriting option
UNITED Long-term OR for trips to the 1. Third party liability and collision:
STATES United States commercial insurance
2. Damage to vehicle: self-underwriting
option
2. Other Vehicles, Including those leased by the Government
Term
Type of
Country of Policy Requirement
Vehicle
Lease
executive CANADA long- Comprehensive commercial insurance, including collision and

term third party liability;
- self-underwrite the deductible -
executive CANADA short- - ditto -

term
executive U.S. long- - ditto -

term
executive U.S. short- Purchase additional commercial insurance to cover third party
term liability and collision for the U.S. risks;
- self-underwrite the deductibles -
non- CANADA long- Self-underwrite except if provincial legislation applies

executive term
non- CANADA short- Comprehensive commercial insurance, including collision and

executive term third party liability;
non- U.S. long- Purchase additional commercial insurance to cover third party
executive term liability and collision for the U.S. risks;
- self-underwrite any damage to government vehicle -
non- U.S. short- Utilize commercial insurance coverage (third party liability
executive term and collision for the U.S. risks) administered by Services and
Specialized Acquisitions Management Sector, PWGSC;
Annex 4.9: Insurance of Government-owned or Leased Equipment

(2013-01-28)
1. Government-owned equipment
A. Operated by government employees

Self-underwriting option must be utilized.
B. Leased to contractor
1. Without operator or driver: equipment floater insurance or any equivalent insurance

coverage must respond to any loss or damage to government equipment.
2. With operator or driver:
Government owned equipment
Control of
Policy Requirement
Work
Work of Self-underwriting option is applicable concerning any loss or damage

operator or to government equipment while being driven or operated by
driver government employees. However, contractor's insurance must respond
controlled to any loss or damage to the equipment while property is in the care,
by custody and control of the contractor.
government
Work of Contractor's insurance must respond to any loss or damage to

driver government equipment (contractor's responsibility because the
controlled property is in the care, custody and control of the contractor).
by
contractor
2. Leased from dealer
A. Operated by government employees

Self-underwriting option must be utilized.
B. Operator or driver being employees of the contractor
Leased from dealer
Control of Their Work Policy Requirement
By government: - Self-underwriting option must be utilized for any damage or loss to

employer-employee equipment while being operated or driven by government employees
relationship
Work of driver Contractor's insurance must respond to any loss or damage to

controlled by dealer government equipment
5 Chapter 5 - Evaluation and Selecting the Contractor

(2012-01-18)
5.1 Overview if the evaluation and selection of contractors

(2015-09-24)
a. This chapter contains information concerning the evaluation process, which includes both the evaluation
of bids and the selection of a successful bidder. The chapter further addresses negotiations with the
bidder(s) before contract award.
b. For more information on bid evaluation, consult the Basic Guide for Bid Evaluation Process (available
on GCpedia - Acquisitions Program Policy Suite - Procurement Process
(http://www.gcpedia.gc.ca/wiki/AP_-_Procurement_Process) ).
c. It is recommended that contracting officers also familiarize themselves with the Basic Guidelines for
Bid Evaluation Process - Contractor Selection Methods .
5.5 Evaluation procedures

(2016-06-09)
a. The main purpose of bid evaluation is to determine the best responsive bid, in accordance with the
evaluation and selection methodology specified in the solicitation document, among the bids submitted
before the bid closing time on the date specified in the bid solicitation.
b. The responsive bid offering the best value to Canada may or may not necessarily be the one with the
lowest price. In order to accurately determine best value, a logical systematic evaluation procedure
covering all aspects of the evaluation process must be followed.
c. Before starting the actual technical and financial evaluation of bids, it is necessary to ensure that all the
information required at bid closing is available and ready to be transmitted to the evaluators. It is the
responsibility of Public Works and Government Services Canada (PWGSC) to determine whether the
bids received are complete, as specified in the bid solicitation, before further detailed evaluation of the
bids. This means, for example, verifying:
i. that certifications or securities required at bid closing are included;
ii. that bids are properly signed;
iii. that the bidder is properly identified (particularly important in the case of joint ventures);
iv. acceptance of the terms and conditions of the bid solicitation and resulting contract, such as bid
validity period;
v. ability to meet a clearly specified critical delivery schedule;
vi. whether the bid is conditional (e.g. limitation of liability), or
vii. that all documents, required by the bid solicitation to determine technical responsiveness, have
been submitted.
Note: It is recommended that the contracting officer creates and uses a check list of all requirements,
which can be used throughout the evaluation of each bid.
d. Evaluation of bids must be in accordance with the procedures stipulated in the bid solicitation. They
must be checked for responsiveness to the contractual, technical and financial requirements of the bid
solicitation. Fair, accurate and transparent evaluation of bids is an important aspect of procurement
process. Generally, financial bids should not be sent to the technical evaluators until after completion of
the technical evaluation.
5.5.5 Certifications, declarations and proofs

(2016-10-05)
a. Certifications, declarations and proofs are standalone documents that substantiate information submitted
with a bid, offer or arrangement. Standalone documents are independent from requirements for bid
evaluation but they are mandatory to finalize the bid evaluation process. Personal references may also
be included under this policy but only if their use will not change the substance of a bid, offer or
arrangement or introduce new information that could improve a score or ranking.
b. Mandatory certifications, declarations or proof documents may be requested at bid closing. However,
under this policy bidders must not be required to provide these documents at bid closing unless, the
documentation being requested is included in the Exceptions section below. Contracting officers must
ensure that all solicitation documents identify which certifications, declarations and proofs are required.
If these documents have not been provided at bid closing, PWGSC will notify the bidder, offeror or
supplier that they are required to provide them within two business days following notification by
PWGSC. (Note: this time requirement reflects PWGSC’s expectation that these documents ought to be
readily available to a bidder, offeror or supplier.)
c. Once notified, any bidder, offeror or supplier that fails to provide the required document(s) within two
business days will be informed by the Department that their bid, offer or arrangement is non-responsive
and that it will be given no further consideration.
d. The contracting authority must apply the ”two business days” time requirement to any SACC manual
clause that currently allows for the contracting authority to stipulate the time to provide a certification,
declaration or proof.
e. The following exceptions are permitted:
i. Integrity Provisions - The bidder, offeror or supplier must provide a completed Declaration Form
or list of directors or owners in accordance with conditions defined in Ineligibility and Suspension
Policy (http://www.tpsgc-pwgsc.gc.ca/ci-if/politique-policy-eng.html) .
ii. Procurement Strategy for Aboriginal Businesses (PSAB) - Bidders, offerors or suppliers must
include with their bid, offer or arrangement certification that they meet the approved definition of
an Aboriginal Business.
iii. Canadian Content Policy – The bidder, offeror or supplier must provide certification in
accordance with conditions defined in the Canadian Content Policy.
iv. Registry and Pre-qualification of Floating Plant – the bidder, offeror or supplier must provide
certification with the bid as stated in Standard Acquisition Clause R2710T-GI06 General
Instructions - Construction Services - Bid Security Requirements.
v. Requests for Financial Capability documentation – Contracting officers in consultation with the
Cost and Price Analysis Group determine what financial information will be required from a
subset of bidders during the bid evaluation phase and the time frame for providing the
information.
vi. Solicitations using Public Openings - the bidder, offeror or supplier must provide certifications,
declarations and proofs with the bid as specified in the solicitation.
5.10 Confidentiality of Bids

(2015-02-25)
a. The contracting officer must treat all information in a secure and confidential manner to ensure the
integrity of the contracting process.
b. When referring bids to the client (or technical evaluators) during the evaluation process, the following
cautionary note must be provided to the client:
"Bid information must be divulged only to individuals authorized to participate in this contracting
process. Information must not be divulged to, or discussed with, the private industry."
c. During the period from bid closing to contract award, (including the contract approval process),
contracting officers receiving requests from suppliers for the names of bidders must not release this
information. For more information, suppliers should contact the Access to Information and Privacy
Office.
d. After contract award, the names of bidders and other information may be released in accordance with
departmental policy. (See 7.30 Procurement Reporting and Posting of Award Notices.)
5.15 Verifying Compliance with Security Requirements

(2013-01-28)
a. Before contract award, the contracting officer must verify with the Canadian Industrial Security
Directorate (CISD) that the proposed contractor meets the security requirements of the bid solicitation.
This verification can be done by contacting the CISD call centre and requesting a security status sheet
for the successful bidder. The contracting officer shall not rely on the security indicator in the Vendor
Information Management (VIM) system as it may not always be up to date. The request to CISD for a
security status sheet should include the proposed contract number, the full name and address of the
proposed contractor, if applicable, the address of location of the work performance, as well as the
required security levels stipulated in the proposed contract. If the supplier has the appropriate security
clearance, the contracting officer must sign the Security Requirements Check List (SRCL) at block 16
and include the fully signed SRCL as an annex in the resulting contract. In the case of call-ups against a
standing offer or contracts against a supply arrangement, it is the responsibility of the user to verify that
the contractor meets the security requirements.
IMPORTANT: When security clearances such as IT, Production and/or COMSEC are required, seek
assurance of these specific security types from CISD as they are contract specific and not blanket
clearances held by the organizations.
b. During the period of the contract, the client must ensure that all contractor or subcontractor personnel
who will have access to any classified or protected information, assets or sensitive work sites, or to
government systems are identified as working under the contract and that their security status has been
verified with CISD. The contracting officer will assist in this process as required.
c. When security clearances are mandatory, they must be obtained before the commencement of any work.
However, it is recognized that there may be circumstances under which, for reasons of urgency, the
contractor, or the contractor’s employee(s) must begin the work before the completion of the security
process. In these cases, consult with CISD for options. However, in a competitive solicitation, the
method of selection must be followed; therefore, any delay must be in accordance with the solicitation
procedures.
d. If, at any time during the period of the contract, the contracting officer becomes aware that a
subcontractor, whose security status has not been verified with CISD, will require access to any
classified or protected information, assets or sensitive work sites, the contracting officer must consult
with CISD to ensure the necessary subcontract SRCLs are submitted and as well verify that the
subcontractor meets the security requirements.
5.16 Integrity compliance

(2016-06-09)
a. Before awarding a contract (including issuing a purchase order), issuing a standing offer (SO) or supply
arrangement (SA), or publishing of a pre-qualified supplier list, contracting officers must first verify
with the Registrar of ineligibility and suspension (http://www.tpsgc-pwgsc.gc.ca/ci-if/registraire-registrar-eng.html)
(the Registrar) that the bidder, offeror or supplier is not ineligible to be awarded a contract or suspended.
Certain charges, convictions and other circumstances, as described in the Ineligibility and Suspension
Policy (http://www.tpsgc-pwgsc.gc.ca/ci-if/politique-policy-eng.html) will or may render the bidder, offeror or

supplier ineligible to be awarded or suspended from being awarded a contract.
b. The integrity verification process with the Registrar is not required in the following circumstances:
i. call-ups against standing offers;
ii. contracts against supply arrangements (SAs) (note: an integrity verification is typically not
required when awarding a contract against an SA, however an integrity verification will be
required when awarding a contract against an SA issued prior to April 4, 2016, where the latest
Integrity Provisions have been incorporated by reference into the solicitation);
iii. task authorizations;
iv. contract amendments unless there is a change to the Integrity Provisions or members of the board
of directors;
v. purchases using acquisition cards;
vi. contracts where the transaction value is less than $10,000.00 (GST/HST included) (see the Policy
for definition of transaction value); or
vii. any other contract or type of contract specified in Section 4.b) of the Policy or directive issued
further to the Policy.
c. Verification process:
i. Before awarding a contract (including issuing a purchase order with a transaction value of
$10,000 or more, including GST/HST), issuing an SO or an SA, or publishing a pre-qualified
supplier list, contracting officers must submit the information on the bidder, offeror or supplier to
the Registrar using the Integrity Database Services (IDS) portal.
ii. Responses are typically provided within 4 hours for routine requests and within 2 hours for urgent
requests, on business days, between 8:00 a.m. and 4:00 p.m. Eastern Standard Time.
iii. List of directors or corporate owners:
A. Contracting officers are not required to verify whether bidders, offerors or suppliers should
have provided a list of directors or corporate owners, but are simply to submit to the
Registrar the information as received from the bidders, offerors or suppliers.
B. Where a bidder, offeror or supplier has not provided a list of directors or corporate owners
with their bid, offer or arrangement, the contracting officer must submit the complete legal
name, address and Procurement Business Number (PBN) of the successful bidder, offeror
or supplier, along with the solicitation number (or proposed contract number) to the
Registrar.
C. The Registrar determines whether a bidder, offeror or supplier should have provided a list
of directors or corporate owners. In the event that such list should have been provided, the
Registrar will communicate this requirement to the contracting officer, who will then
inform the bidder, offeror or supplier of their obligation to provide the list within a
recommended 10 business days. Failure to provide this information within the timeframe
stipulated by the contracting officer will render the bid , offer or arrangement non-
responsive. See 5.5.5 Certifications, declarations and proofs.
iv. Verification responses:

Three responses are possible, as described below. Contracting officers are to keep a copy of the
confirmation e-mail from the Registrar in the procurement file. This process and the estimated
timelines can be delayed should additional information be required by IDS to allow them to make
a determination.
A. "Integrity result – The supplier is not ineligible. (No match)": This response confirms
that the contracting officer may award the contract, issue the standing offer or the supply
arrangement, or publish the list of pre-qualified suppliers.
B. "Ineligibility confirmed": This response indicates that the bidder, offeror, or supplier has
been determined to be ineligible or suspended as per the Ineligibility and Suspension
Policy. The bidder, offeror or supplier is suspended or ineligible to be awarded a contract or
issued a standing offer or supply arrangement, or to be included in a list of pre-qualified
suppliers. In exceptional circumstances, the contracting officer may request a Public
Interest Exception (PIE) to enter into a contract with an ineligible supplier.
A. "Caution due diligence should be applied": This response advises that the bidder, offeror
or supplier is not ineligible. However, the level of delegation to enter into the transaction
has been raised to Assistant Deputy Minister or Director General as indicated in the
verification response email. This information is for internal discussion and decision making
only and, as such, should never be discussed with external parties.
v. Where “Ineligibility confirmed” or “Caution due diligence should be applied” responses are
received, contracting officers must consult with the Acquisitions Program Integrity Secretariat
(APIS) by e-mail at TPSGC.DGAIntegrite-ABIntegrity.PWGSC@tpsgc-pwgsc.gc.ca, and obtain
the required approval as stipulated in Annex 6.4.1. Approval Authorities and Additional Signing
Authorities in Support of Clients' Programs Only – Other than for Canadian Commercial
Corporation.
vi. Where the Registrar must confirm the identity of an individual as a result of an integrity
verification response, they will request information directly from the individual in question.
d. Verification Process for Amendments:
i. Contracting officers must propose the latest general conditions, which include the most recent
Integrity Provisions when amending a contract as per section 4.21 Integrity Provisions,
subsection d. The verification process as outlined in subsection c. above must be followed if the
contractor accepts the new Integrity Provisions to be included in the contract amendments, and
the existing contract contains Integrity Provisions dated prior to July 2015.
ii. The verification process as outlined in subsection c. above must be followed for contract
amendments where the file does not already contain a record of a previous verification.
iii. If a previous verification was performed and the results are on file and the Integrity Provisions
have not changed, no further action is necessary.
e. If a contractor is found to be ineligible or is suspended while the contract is active, the Registrar will
contact the contracting officer who requested the integrity verification for that particular contract. The
contracting officer, with the assistance of the Acquisitions Program Integrity Secretariat (APIS), will
determine whether the contract can be terminated for default. If the contract is to be terminated for
default, APIS will assist the contracting officer. The ineligible or suspended contractor may be required
to enter into an Administrative Agreement with Public Works and Government Services Canada if the
contract is not terminated.
f. Awareness and Prevention: Before contract award or issuance of standing offers or supply arrangements,
the successful bid or offer must be reviewed by a contracting officer who has completed the training on
Bid Rigging Awareness and Prevention. This can be the same contracting officer assigned to the
procurement file.
g. For further details on Integrity, see the following sections:

3.51 Integrity Overview;
4.21 Integrity Provisions;
8.70.2 Compliance with the Integrity Provisions; and
8.90 Assignment of Contracts.
5.20 Use of Subject Matter Experts/Specialists

(2010-01-11)
a. Contracting officers should take advantage of the knowledge of specialists or subject matter experts.
They are available to provide guidance in their areas of expertise, whenever it would be helpful and/or
appropriate in making a recommendation or confirming a decision.
b. Subject matter experts/specialists include: legal services, Access to Information and Privacy officers,
contract quality control officers, cost analysts and risk management advisors, auditors, policy
authorities, green procurement specialists, ethics officers, Human Resources authorities, commodity
team leaders, client engagement officers, experienced contracting officers, industry/association

representatives, etc.
5.25 Use of Fairness Monitors

(2010-01-11)
a. When a fairness monitor has been engaged to support a procurement process, he/she will provide
written reports to the Departmental Oversight Branch (DOB), in accordance with the statement of work
included in the fairness monitor's contract, attesting to the fairness of the procurement process.
b. If a fairness monitor observes a situation that constitutes, or has the potential to create, fairness
deficiencies, the fairness monitor will inform the project team of its concerns and seek a resolution. If a
resolution cannot be reached, the fairness monitor will immediately advise DOB.
c. The fairness monitor will submit a final report to DOB, which includes among other things, the fairness
monitor's overall attestation of assurance on the fairness of the monitored activity and any unresolved
fairness deficiencies observed. This report will be made public after tabling with senior management.
5.30 Clarifications
(2010-01-11)
a. To be considered for contract award, a bid must, at closing date meet all mandatory requirements
stipulated in the bid solicitation. Bidders are responsible to meet the criteria stipulated in the bid
solicitation as well as request clarification before submitting a bid if they are not sure they understand a
requirement. The instructions to bidders clearly provide that PWGSC may request clarification from
bidders, but it is under no obligation to do so.
b. If PWGSC decides to request clarifications or additional supporting data from the bidders, the
contracting officer must ensure that this process does not give any bidder an advantage over the others.
In no event can this clarification alter the price quoted or any substantive element of a bid.
c. Only clarifications which do not change the substance or price of a bid may be requested and accepted.
The request for clarifications and response must be in writing. Any response, which leads to a
substantial change in the bid is considered bid repair and must not be considered in the bid evaluation.
Pursuant to the Canadian International Trade Tribunal (http://www.citt.gc.ca/en) (CITT), a clarification is
acceptable only if it is an explanation of some existing aspect of the bid that does not amount to a
substantive revision or modification of the bid. Bidders cannot be allowed to repair their bid through a
clarification process.
d. In conducting its evaluation of the bids, Canada may, but has no obligation to correct any error in the
extended pricing of bids by using unit pricing and any error in quantities in bids to reflect the quantities
stated in the bid solicitation. In the case of error in the extension of prices, the unit price will govern.
e. If an unusually low price is identified, the bidder must be given the opportunity to either confirm or
withdraw its bid in writing. Once confirmed, the supplier must accept the price in any resulting contract.
The contracting officer must not divulge the difference in price between that bid and the next lowest bid.
In no event will the bidder be permitted to increase the price. In solicitations with bid security, this
provision may not apply.
f. The contracting officer will specify in the request the number of days the bidders will have to comply
with any request. Failure to comply with the request may result in the bid being declared non-
responsive.
5.35 Evaluating the Bids

(2017-07-01)
a. The client is responsible for the evaluation of the technical portion of the bids, and, where applicable,
the management portion. PWGSC is responsible for the evaluation of the contractual terms and
conditions and the financial portion of the bids. Bids must meet all the mandatory requirements and
criteria set out in the bid solicitation. Bids that fail to meet a mandatory requirement (such as a bid bond
or any information or document) or any other mandatory evaluation criteria (technical, financial or
other) will be declared non-responsive.
b. For Complexity Levels 2 and 3, the procurement risk assessment may determine that a Formal Peer
Review of the results of the bid evaluation is required. For Complexity Levels 4 and 5 inclusive, a
review of the results of the bid evaluation is mandatory. For more information on the Formal Peer
Review, see 5.45.1 Formal Peer Review of Evaluation. In all other situations once the bid evaluation is
completed, contracting officers are encouraged to obtain a review of the results of that evaluation prior
to issuing the contract.
c. In some cases, third parties may be invited to assist in evaluating bids, for example, scholars and other
experts. When third parties will be involved, bidders must be advised in the bid solicitation. In general,
third parties participating in the evaluation, or in the bid preparation, must sign a non-disclosure
agreement and a conflict of interest agreement before such participation.
d. Bids must be evaluated in accordance with the evaluation criteria established in the bid solicitation.
Even though the onus is on bidders to submit clear and well-organized bids, bids must be reviewed with
diligence and thoroughness to ensure that no essential information is missed. The evaluators must not
use criteria or factors not included in the bid solicitation or derive conclusions from information
contained in bids that may prove wrong. Whenever possible, the same evaluators should evaluate all
bids. When evaluating bids, evaluators must consider all vital information provided in the bid, and must
not base their evaluation on undisclosed criteria.
e. Documents pertaining to the evaluation of bids must be retained. Evaluators must provide the original or
a copy of all evaluation notes and communications to the contracting officer for filing on the
procurement file. All such information is subject to the Access to Information Act. For example,
evaluators' worksheets must not be destroyed even if the information contained in the worksheets is
recorded in other evaluation documents. Following a relevant Canadian International Trade Tribunal
decision, it was found that evaluators' worksheets are an integral part of the evaluation process and
constitute part of the complete record regarding the procurement and part of the written record of all
communications substantially affecting the procurement within the meaning of the international trade
agreements. Destroying the evaluators' worksheets is a breach of the international trade agreements.
Although no similar provision exists in the Canadian Free Trade Agreement (CFTA) or Agreement on
Internal Trade (AIT), the maintenance of complete documentation is also essential under the CFTA and
AIT to promote fair and open procurement procedures. Contracting officers can also refer to the
Treasury Board Directive on Recordkeeping.
5.40 Technical Evaluation of Bids

(2010-01-11)
a. The client department is responsible for the technical evaluation of the bids.
b. Following the completion of the technical evaluation, the client department must provide a report to the
contracting officer detailing the results of the evaluation, including details on all non-responsive bids
and the reasons for declaring them non-responsive. Each person who participated in the technical
evaluation as an evaluator must sign the report.
c. Complete documentation, including all notes, worksheets, etc. made during the processing or evaluation
of the bids must be retained, for future reference, on the PWGSC procurement file.
5.40.1 Evaluation of Technical Mandatory Criteria

(2010-01-11)
a. Mandatory criteria are assessed on a simple pass/fail basis. Bids that fail to meet any of the mandatory
criteria will be considered non-responsive.
b. The reasons for declaring a bid non-responsive must be clearly documented by the contracting officer in
the procurement file.
5.40.5 Evaluation of Technical Rated Criteria

(2010-01-11)
a. Only bids that meet the mandatory criteria will be subject to point rating, as applicable. Rated criteria
are used to assess various elements of the technical bid so that the relative merits of each bid can be
determined. The maximum points that can be achieved for each rated criterion must be specified in the
bid solicitation.
b. When point rating is used, bids may have to achieve a minimum number of points overall to be
considered responsive, and often they must also achieve a minimum number of points for certain
individual criteria. Bid solicitations must clearly identify any mandatory minimum thresholds.
c. Over the years, there have been numerous complaints to the CITT alleging that the scoring against
individual criteria was unfair. In the majority of cases however, the CITT has said that it cannot
undertake a re-weighting of the points assigned unless the treatment of the bid under review amounts to
a denial of fair treatment. In the absence of evidence that the evaluation was not conducted in a fair
manner, the CITT will generally defer to the judgment of the evaluators who are best qualified to assess
the merits of the bids. The CITT will intervene however if it feels that the evaluators improperly applied
the evaluation criteria and methodology set out in the bid solicitation.
5.45 Financial Evaluation of Bids

(2010-01-11)
a. PWGSC is responsible for the evaluation of the financial portion of the bids. PWGSC does not provide
client departments with price information during the technical evaluation process to ensure its integrity.
Pricing information should only be provided to the client following the completion of the technical
evaluation.
b. Under the following circumstances, more than one PWGSC employee must be involved in the
evaluation of the bid prices to ensure an appropriate level of checks and balances, and to ensure that, in
terms of price, the bids are ranked properly, in accordance with the bid solicitation:
i. for any competitive procurement requiring contract entry approval of the Minister, the Assistant
Deputy Minister or Treasury Board; and
ii. for any procurement which is considered to be sensitive or high-risk.
c. Contracting officers should also consider having more than one PWGSC employee involved in the
evaluation of the bid prices, under the following circumstances:
i. when the evaluation involves extensive computation or is mathematically complex; and
ii. for standing offers (SO) and supply arrangements (SA) requiring the approval of the Assistant
Deputy Minister.
d. All PWGSC employees involved in evaluating the bid prices must sign the financial evaluation report.
5.45.1 Formal Peer Review Process

(2014-09-25)
a. The peer review is intended to provide an oversight and risk management role within the competitive
process results. This review is to ensure that the evaluation and contractor selection were conducted in
accordance with the solicitation, and to confirm no anomalies or potential issues exist which could
impede the principles of fairness, openness and transparency of the procurement process.
b. For Complexity Level 2 and 3 procurements, the requirement for a peer review is determined by the
results of the procurement risk assessment.
c. For Complexity Level 4 and 5 procurements, a peer review is mandatory.
d. Peer reviewers must initial and date the evaluation report to confirm that such a review has taken place.
e. The accountability of the procurement remains with the contracting officer responsible for the
requirement; there is no transfer of responsibility.
f. The decision of who will conduct the peer review will be determined at the procurement strategy phase
when seeking approval in accordance with the risk assessment tool or at the discretion of the approval
authority.
g. Should issues arise during the peer review process, the contracting officer and the peer reviewer(s)
should make every effort to resolve them. In the event that a resolution cannot be achieved, the matter
will be escalated to one designated level above the contracting officer for resolution.
h. The time required to conduct a peer review will be determined between the contracting officer and the
peer reviewer(s); however, such review should not exceed two business days.
i. Informal peer reviews may also take place at the discretion of the contracting officer or the applicable
approval authority.
5.45.2 Provincial Taxes

(2011-10-04)
Except as provided by law, departments and agencies are not required to pay any provincial sales tax (PST)
payable to the province in which the taxable goods or services are delivered, except for reimbursement of actual
costs which include PST (e.g. PST on actual travel and living expenses incurred during the performance of the
contract). Federal departments are required to pay the Harmonized Sales Tax (HST). For further details, consult
the relevant section of the Standard Acquisition and Clauses (SACC) Manual general conditions (e.g.
section 11 of 2010A or section 13 of 2035).
5.45.5 Foreign Taxes and Canadian Customs Duties

(2010-01-11)
a. Customs duties must be considered in the evaluation of bids when bids are received from both
Canadian-based and foreign-based bidders, since foreign-based bidders exclude duties in their bids.
When rates of duties or exemption status need to be verified, the contracting officer may:
i. obtain from the client department the information on the rate of duty applicable to the goods
being imported, and add the estimated amount of duties to the price quoted by the foreign-based
bidder; or
ii. verify with the Canada Border Services Agency (CBSA) the application of customs duty to the
goods being imported.
The tariff and value administrator at the CBSA will provide a written ruling to any request for rate of
duty, tariff classification, or customs value. Importers or their agents who wish a written ruling must
send their request to the nearest CBSA office.
b. Contracting officers are responsible for verifying the application of excise taxes and the amount and
specific rate(s) set out in bids. Contracting officers must evaluate bids exclusive of the Goods and
Services Tax (GST) or the HST, as applicable. For the list of goods on which excise tax is payable, see
Annex 4.5: Goods Subject to Excise Tax.
c. Clients may be entitled to exemption from taxes or duties. They should, in such cases, refer to a
certificate of exemption or remission or drawback Order in Council. Issues relating to such remissions
should be resolved between the client department and CBSA.
5.45.10 Transportation Costs

(2010-01-11)
All goods requirements with an estimated value of $25,000 or more, including Goods and Services
Tax/Harmonized Sales Tax (GST/HST), and with transportation costs exceeding $7,500 must be submitted to
the Traffic Management Directorate (TMD) for a detailed analysis of the charges subject to the exceptions of
4.60 Transportation Costs. TMD will provide an analysis and recommendations regarding the proposed
transportation method(s) and costs within two working days or advise the contracting officer of any delay.
5.45.15 Bids in Foreign Currency

(2017-08-17)
Unless the bid solicitation specifically requires bids to be made in Canadian currency, bids that are made in a
foreign currency must be converted to Canadian currency for evaluation. The Bank of Canada rate published by
16:30 ET on the bid closing date, or on another date specified in the bid solicitation, must be applied as a
conversion factor to the bids made in foreign currency.
5.45.20 Exchange Rate Fluctuation

(2013-11-06)
This section has been removed in Version 2013-7 of the Supply Manual to be incorporated within section 4.65
Exchange Rate Fluctuation Risk Mitigation.
5.50 Selecting the Successful Bidder

(2010-01-11)
The successful bidder must be selected in accordance with the methodology specified in the bid solicitation.
5.55 Rejection of Bids/Offers/Arrangements

(2011-06-29)
5.55.1 Role of the Contracting Officer

(2012-10-25)
a. The contracting officer is not to evaluate bids/offers/arrangements received from a vendor if the vendor
is subject to a VPCM relevant to the procurement. (Bids include bids for contracts under supply
arrangements.)
b. A standing offer must be set aside for a vendor that is subject to a relevant VPCM.
c. A decision to reject a bid/offer/arrangement because of a VPCM can be made at any time up to the
awarding of a contract or the issuance of a standing offer or a supply arrangement. VIM is to be checked
for a VPCM at closing for competitive solicitations and prior to contact for sole sourcing. In addition,
VIM is to be rechecked prior to the awarding of a contract or the issuance of a standing offer or a supply
arrangement.
d. When accessing the VIM file on a bidder/offeror/supplier, the contracting officer will have a clear notice
of any VPCM. The Automated Buyer Environment (ABE) will not interfere with the awarding of a
contract or the issuance of a standing offer or a supply arrangement to a bidder/offeror/supplier subject
to a VPCM. Therefore, it is up to the contracting officer to verify whether the vendor is subject to a
VPCM.
5.55.5 Authority to Reject a Bid/Offer/Arrangement

(2012-10-25)
The authority to reject a bid/offer/arrangement, under the applicable section entitled Rejection of Bid of the
Standard Acquisition Clauses and Conditions Manual Standard Instructions 2003, 2004, 2006, 2007, and 2008,
rests with the contracting officer responsible for evaluating the bids/offers/arrangements, except that in the case
of bids/offers/arrangements being considered for rejection in accordance with 1.(c), 1.(d), 1.(f)(i), and 1.(f)(ii),
the authority to reject a bid/offer/arrangement rests with the appropriate director general.
5.55.10 Notice to the Bidder/Offeror/Supplier

(2012-10-25)
a. Notice of intent to reject a bid/offer/arrangement under the applicable sections mentioned in 5.55.5
Authority to Reject a Bid/Offer/Arrangement should be given by telephone, and followed by confirming
facsimile or letter. Notice of intent is considered to have been received by the rejected
bidder/offeror/supplier at the time of the telephone call. The person making the call should note on the
file the date and time of the call, and the person spoken to.
b. The notice of intent must set out the facts and the reasons for the decision to reject the
bid/offer/arrangement. However, when a bid/offer/arrangement is being rejected in accordance with 1.
(a) or (b) of the applicable section of the SACC Manual standard instructions because of a VPCM that
is in place, it is sufficient to reference that VPCM.
5.55.15 Review
(2012-10-25)
a. A bidder/offeror/supplier, except a bidder/offeror/supplier excluded in accordance with 1.(b) of the

applicable section of the SACC Manual standard instructions, may request that the decision to reject the
bid/offer/arrangement be reviewed by the Assistant Deputy Minister, Acquisitions Branch (ADM/AB).
It is entirely in the ADM/AB's discretion whether the bid evaluation and contract award process will be
held up in order to grant more time to review the decision.
b. A review by the ADM/AB will result in an investigation, and a decision. Such a decision can have an
effect beyond the particular procurement from which the bidder/offeror/supplier has been rejected.
When the decision has been made, the bidder/offeror/supplier must be informed of the results, in
writing.
5.60 Financial Capabilities of Contractor

(2010-01-11)
5.60.1 Financial Capability

(2010-08-16)
a. The bidder must have the financial capability to fulfill the requirement.
b. Treasury Board (TB) Policy states "firms considered qualified are those which have the technical,
financial and managerial competence to discharge the contract. Contracting officers are responsible for
verifying this information, prior to entering into a contract".
c. Contracting officers must consult with the Cost and Price Analysis Group in the Policy, Risk, Integrity
and Strategic Management Sector, during the evaluation of bids/offers/arrangements, to determine what
financial information may be required from the Bidder/Offeror/Supplier.
i. When a financial opinion is required, the following Standard Acquisition Clauses and Conditions
(SACC) clauses should be used, A9033T for bid solicitations, M9033T for request for standing
offers (RFSO) and S0030T for request for supply arrangements (RFSAs).”
ii. Supply arrangement authorities should note that since the statement of work or requirement
cannot be adequately defined in advance, only a preliminary review of the supplier's financial
viability will be conducted for the sole purpose of pre-qualifying suppliers for supply
arrangements. A complete review of the bidder's financial capability may be required for
subsequent requirements issued under the supply arrangement, therefore, supply arrangement
authorities must include clause A9033T in all bid solicitation documents. For more details on
supply arrangements, see 4.10.25 Request for Supply Arrangements.
d. If the selection of the bidder is competitive and the contract is for commercially available goods or
services, the risks of financial loss to Canada are minimized because of the ability to find alternate
sourcing. However, under any other circumstance, re-sourcing can be costly both in terms of
performance delays and monetary risk.
e. Assessing the financial capability of potential and existing suppliers is not normally required for:
i. assistance contracts on behalf of Industry Canada (IC), (determination of a contractor's financial

capability in these cases is the responsibility of IC);
ii. contracts with universities and colleges, Crown corporations, government departments and
agencies;
iii. contracts for the services of individuals; and
iv. contracts for generally available commercial goods or services from bidders selected by
competition.
f. A financial analysis of a potential supplier may be warranted at the time of sourcing.
g. A financial review of a supplier can be initiated at any stage of the contracting process when considered
necessary by the contracting officer. The contracting officer should arrange for ongoing financial
capability analysis by a cost analyst during contract performance, when necessary.
h. When PWGSC must deal with a financially weak supplier, the risk to Canada must be reduced as much
as possible through contract financial security, based on recommendations by a cost analyst.
i. Request for Financial Reviews must be submitted by completing form PWGSC-TPSGC 603 (PDF
Version 40 KB) - (Help on File Formats).
5.60.5 Bid Security (Financial)

(2010-01-11)
a. If bid security is obtained, it must be held until the terms of the security are fulfilled, including award of
a contract and/or expiration of the bid validity period.
b. If a bidder submits a bid, which includes insufficient security, that is, less than the exact financial
security stipulated, or none at all, the bid will be considered non-responsive.
c. Security deposits in the form of government guaranteed bonds with coupons are not acceptable unless
all coupons that are not matured at the time the security deposit is provided are attached to the bonds.
d. Surety bonds provided by bidders must be examined by the contracting officer, with advice from Legal
Services, as necessary, to ensure that they are correct, original, and legally enforceable in all respects;
including the bidder's legal name and address, the date of the contract, the contract serial number, and
the description of the "Obligee", which is "Her Majesty the Queen in right of Canada". Surety bonds
requiring correction are returned to the bidder and not to the surety company.
e. PWGSC will hold any bid bond, payment bond, performance bond, non-negotiable security deposit
(government guaranteed bonds, bills of exchange, irrevocable standby letters of credit) until the terms of
the security are fulfilled. For detailed instructions on the safekeeping of these instruments, see
Annex 5.2: Handling, Custody and Safekeeping of Financial Security/Handling of Bills of Exchange.
f. The contracting officer must request written instructions from the bidder concerning the action to be
taken with respect to any coupons attached to the bonds that will mature while the bond is pledged as
security, and the instructions must be forwarded to the Financial Operations Sector.
g. The contracting officer must examine the letters of credit submitted by bidders and obtain advice from
Legal Services, as necessary, to ensure that each letter is correct in all respects, including:
i. the face amount that may be drawn against it;
ii. its expiry date;
iii. provision for sight payment to the Receiver General for Canada by way of the financial
institution's draft against presentation of a written demand for payment signed by the authorized
departmental representative, and identified in the letter of credit by their office;
iv. provision that more than one written demand for payment may be presented subject to the sum of
those demands, not exceeding the face amount of the letter of credit;
v. provision that it is subject to the International Chamber of Commerce (ICC) Uniform Customs
and Practice for Documentary Credits (http://www.iccwbo.org/iccjjdi/index.html) , 2007 Revision, ICC
Publication No. 600;
vi. clear specification that it is irrevocable or deemed to be irrevocable, pursuant to the ICC Uniform
Customs and Practice for Documentary Credits, 2007 Revision, ICC Publication No. 600;
vii. it has been issued or confirmed, in either official language, by a financial institution, which is a
member of the Canadian Payments Association (http://www.cdnpay.ca/imis15/eng/Home/eng/Default.aspx)
and must be on the letterhead of the Issuer or Confirmer. The format is left to the discretion of the
Issuer or Confirmer.
5.60.10 Business Credit Services

(2010-01-11)
a. Business credit services companies provide both general credit ratings and comprehensive credit reports
on individual firms. Their comprehensive reports generally include: simplified financial statements;
details of maximum credit obtained from the firm; promptness of payments made; banking information;
firm's history and some information into the firm's operations.
b. Contracting officers are not to contact a business credit services company directly. They must send all
requirements for business credit services to the Policy, Risk, Integrity and Strategic Management Sector
(PRISMS).
c. Business credit services reports are considered commercially confidential. The information is not to be
disclosed outside the government, and is only disclosed within the government on a "need to know"
basis.
d. Copies of these reports are available for use only within PWGSC. The reports are retained by PRISMS.
5.60.15 Statement of Cost Accounting Practices

(2010-01-11)
a. PRISMS has a comprehensive program to ensure that contractors' cost accounting practices comply with
the Contract Cost Principles 1031-2 and related Cost Interpretation Bulletins.
b. The general principle of Contract Cost Principles is that the total cost of the contract must be the sum of
the applicable direct and indirect costs, which may be reasonably and properly incurred and/or allocated
during the performance of the contract, less any applicable credits. These costs must be determined in
accordance with the contractor's cost accounting practices, as accepted by Canada and applied
consistently over time.
c. Contracting officers should inform PRISMS when a contractor or subcontractor has negotiated contracts
with Canada and meets the following criteria:
i. the supplier's divisions/entities previous fiscal year and/or current fiscal year forecasted
negotiated Canada business volume exceeds $5,000,000 or
ii. the supplier's divisions/entities previous fiscal year and/or current fiscal year forecasted
negotiated Canada business volume exceeds $2,000,000 and represents more than half of that
division's/entities total business volume.
d. The Statement of Cost Accounting Practices (SCAP) is a form used as a management representation
describing the cost accounting practices of a supplier. The Cost, Policy and Financial Review Division
will determine whether the supplier must complete a SCAP.
5.65 Identical Low Bids - Best Value

(2010-01-11)
a. If identical low bids are received, the Treasury Board Contracting Policy (subsection 10.8.17
(http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text#sec10.8) ) provides that the contract should be
awarded on the basis of best value. The factors below should be used, subject to directives on national
policies and objectives that may be issued from time to time. These criteria may be weighted as
considered appropriate by the contracting officer:
i. a bidder with an overall satisfactory performance record is given preference over a bidder known
to have a less satisfactory performance record;
ii. a bidder in a position to provide adequate after-sales service, with a good record in this regard,
will be given preference over a bidder who is less able to provide adequate service or who has a
poor record;
iii. when delivery is an important factor, the bidder offering the best delivery date should be given
preference;
iv. when there are several items included in the bid and only some items are priced identically, the
bid offering the greatest dollar value should be given preference; and
v. when there are several items included in the bid and one or more bidders bid lower on one or
more of the items, the lowest bidder with the greatest dollar value should be given preference both
for the items on which it bid equal prices and for the items on which it bid lower.
b. If there are two (or more) identical bids, and provided that the bid selected would still be considered the
most advantageous to Canada, preference should be given to the bidder who assumes all or part of the
exchange rate adjustment risk over a bidder who does not assume any of this risk. Furthermore,
preference should be given to the bidder who assumes all of the exchange rate adjustment risk over a
bidder who assumes only part of this risk.
c. If none of the above applies, a method of tie breaking that is mutually acceptable to Canada and the
bidders with identical bids can be used. As an example, a simple coin toss could be agreed upon. The
mutually agreed solution should involve legal advice.
5.70 One responsive bid

(2017-10-24)
a. One Responsive Bid Greater than $1,000,000
i. When only one responsive bid is received in response to a competitive bid solicitation, to satisfy
that Canada is obtaining fair value, the contracting officer must contact a cost analyst to determine
if further analysis is warranted as specified by the mandatory conditions set out in the Directive
on the Use of Cost and Price Analysis Services
(http://www.gcpedia.gc.ca/gcwiki/images/d/d0/Directive_on_the_Use_of_Cost_and_Price_Analysis_FINAL_EN.pdf)
(PDF). Once the contracting officer has determined that the bid represents fair value to Canada,
the contract may be awarded using competitive authorities to the single responsive bidder.
ii. If the contracting officer is not satisfied that the bid represents fair value, the contracting officer
may consider negotiating or cancelling and reissuing the bid solicitation.
b. One Responsive Bid Less than or Equal to $1,000,000
i. When only one responsive bid is received in response to a competitive bid solicitation, to satisfy
that Canada is obtaining fair value, the contracting officer should consider using the services of a
cost analyst to determine if further analysis is required (refer to the Guideline on the Use of Cost
and Price Analysis Services
(http://www.gcpedia.gc.ca/gcwiki/images/d/dd/Guideline_on_the_Use_of_Cost_and_Profit_Analysis_FINAL_EN.pdf)
(PDF)). Once the contracting officer has determined that the bid represents fair value to Canada
the contract may be awarded using competitive authorities to the single responsive bidder.
ii. If the contracting officer is not satisfied that the bid represents fair value, the contracting officer
may consider negotiating or cancelling and reissuing the bid solicitation.
c. One Responsive Bid from Foreign Contractor
When only one responsive bid is received in response to a competitive solicitation, and that bid is from
a supplier in a North Atlantic Treaty Organization (NATO) allied country, or a significant portion is
being proposed to be subcontracted to a supplier in a NATO-allied country, to satisfy that Canada is
obtaining fair value, the contracting officer should consider using the services of the foreign supplier's
country's government to conduct an assessment of the fairness and reasonableness of the bid. This
service can be called up by submitting a request through the Price Support Directorate (PSD). More
information on this service is provided at 9.56 Price certifications and audits of foreign contractors.
5.75 No Responsive Bids

(2010-01-11)
When no responsive bid is received as a result of a competitive bid solicitation, the bid solicitation must be
cancelled. For more information on reissuing a solicitation, see 4.100 Cancelling and Reissuing a Solicitation.
5.80 Bid Rigging/Collusion/Fraud

(2010-01-11)
The contracting officer must notify Legal Services and his or her immediate director whenever there is an
indication of possible bid-rigging activities, collusion or fraud. When it is considered necessary, Legal Services
will assist in subsequent discussions with Competition Bureau Canada, (http://www.competitionbureau.gc.ca/epic/site/cb-
bc.nsf/en/home) a federal independent law enforcement agency responsible for the administration and enforcement
of the Competition Act. Bid rigging is addressed in section 47 of the Act.
The following are examples of possible bid-rigging activities:
a. bid rates/prices are much higher than published price lists, engineering cost estimates, or previous bid
rates/prices by the same suppliers, for no apparent reason;
b. the successful bidder subcontracts work to suppliers who submit higher bids on the same project;
c. bidders use identical wording to describe non-standard items, or submit identical bids for non-standard
items;
d. there are indications of unusual communications among suppliers, before submitting the bids with
regards to bid prices, or allocation of clients, or references to "standard industry prices", "industry self-
regulation", etc.;
e. the same supplier wins bids for specific clients, or in specific geographic locations, or for specific sizes
or types of work, and loses most other bids on a regular basis; or
f. a recognizable pattern of systematic or random low bid rotation exists.
5.85 Negotiations
(2017-09-21)
a. When two or more responsive bids are received in response to a competitive bid solicitation and if no
responsive bid represents fair value, contracting officers should examine the solicitation to determine
possible causes. Subsequently, the contracting officer may consider negotiating with all responsive
bidders or cancelling and reissuing the bid solicitation.
b. Subsection 10.6.6 (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text#sec10.6) of the Treasury Board

Contracting Policy states: "when negotiating with more than one firm, care should be taken that all are
treated fairly and impartially. The negotiations should not become an auction of the contract, as firms
progressively improve their bids in the light of information about the position of other firms. The
confidentiality of each firm's negotiating position is to be assured".
c. The contracting officer must conduct all negotiations. If it is of a technical nature, the contracting officer
and the client should conduct the negotiations. A negotiation report must be placed on the procurement
file.
d. For procurements subject to the international trade agreements contracting officers must conduct
negotiations in accordance with the conditions of these agreements. See Article 1014: Negotiation
Disciplines of the North American Free Trade Agreement, Article 19.11: Negotiation
(http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/19.aspx?
lang=eng) of the Canada-European Union Comprehensive Economic and Trade Agreement or Article
XIV: Negotiation (http://www.wto.org/english/docs_e/legal_e/gpr-94_02_e.htm#articleXIV) of the World Trade

Organization Agreement on Government Procurement, or Article 512: Negotiation of the Canadian Free
Trade Agreement. The various bilateral free trade agreements have similar rules to NAFTA.
e. For procurements not subject to NAFTA, CETA, WTO-AGP (http://www.wto.org/english/docs_e/legal_e/gpr-

94_01_e.htm) , or CFTA,
i. when a bid solicitation was used, negotiations may be entered into:
A. before the completion of bid evaluation, provided that they are held with all bidders that
submitted responsive bids; or
B. after the bid evaluation, with only one bidder, provided that the bidder submitted the only
responsive bid. Or, the bidder was selected after evaluating more than one responsive bid,
but it can be demonstrated that if the negotiations had been held with all of the bidders that
submitted responsive bids, there would have been no change in the bidder selected;
The ability to prove that the same bidder will be selected, regardless of whether negotiations are
conducted with all responsive bidders, presupposes that the requirement (for example, technical
specifications) will not change during negotiations and, therefore, that other bidders given the
same opportunity could not submit different or better offers.
ii. when an Invitation to Tender (ITT) was used and there is more than one responsive bid, but
neither the lowest bid nor the other bids represent fair value, the contracting officer must have
determined, before considering entering into negotiations, that it would not be more effective to
cancel the solicitation and meet the requirement using another method of supply. When urgency is
a major factor, the results of the original ITT might be capable of being used as the basis for
entering into negotiations with bidders; and
iii. when a Request For Quotation was used, negotiations should be avoided.
5.90 Extending the Bid Validity Period

(2010-01-11)
a. Bids will remain open for acceptance for a period of 60 days (30 days for construction), from the
closing date of the bid solicitation, unless otherwise indicated in the bid solicitation (see Standard
Acquisition Clauses and Conditions Manual, (SACC) Standard Instructions 2003, 2006, and 2008).
Contracting officers must carefully assess the potential for extended bid evaluation periods and indicate
in the bid solicitation the modified period for bid acceptance. Contracting officers must also carefully
monitor events during the bid evaluation period and contract approval process in order to award the
contract before the bid acceptance period has expired. Expiry of bid acceptance periods before contract
award should thus become an exceptional circumstance.
b. If the bid acceptance period has expired, and the contract has not been awarded, the bid solicitation must
be reissued.
c. Any contract awarded to a bidder after the bid expiry date is considered a sole-source contract, and must
be justified accordingly.
d. If the evaluation is incomplete and is unlikely to be completed within a reasonable period of time, and
the bid acceptance period will expire before the evaluation is complete, the process should be halted and
an assessment made to identify the cause of the delay. Any necessary corrections to the solicitation or
evaluation methodology may then be made and the bid solicitation reissued.
e. As stated in the standard instructions, Canada may seek an extension of the bid validity period from all
responsive bidders in writing within a minimum of three (3) days before the end of the bid validity
period. If all responsive bidders accept the extension, Canada will continue with the evaluation of the
bids. If all responsive bidders do not accept the extension, Canada will, at its sole discretion, either
continue with the evaluation of the bids of those who have accepted the extension or cancel the
solicitation.
f. Where a bidder does not agree to the extension and it is clear that this particular bidder has no chance of
being recommended for award, then it may be appropriate to exercise Canada's right to proceed with the
evaluation of only those bids submitted by the bidders that have agreed to an extension. Legal Services
may be consulted in instances where a bidder does not agree to the extension, particularly in the case of
procurements subject to the trade agreements.
5.95 Evaluating Joint Venture Bids

(2010-01-11)
a. Joint ventures may respond to bid solicitations in accordance with the applicable conditions contained in
the solicitation. The relevant section of standard instructions 2003, 2006 and 2008 of the SACC Manual
permits joint venture bids and provide further details.
b. If a contract is awarded to a joint venture, all members of the joint venture will be severally liable for
the performance of any resulting contract. (See standard instructions referenced above.)
c. If a financial capability assessment is done, then all members of the joint venture will be assessed.
5.100 Special Program Considerations

(2013-06-27)
In the evaluation of bids, consideration must, as applicable, be given to various programs such as Canadian
content, green procurement and the Federal Contractors Program for employment equity. Employment equity
requirements are described in Annex 5.1: Federal Contractors Program for Employment Equity.
5.105 Evaluation Report

(2010-01-11)
a. An evaluation report must be prepared outlining in detail the review of the bids, including any
clarifications requested and how the final decision was taken to rank and select the bidders.
b. The evaluation report should include the evaluation criteria, the rationale of mandatory and point-rating
for each criterion, as well as the names and contact information of all evaluators.
c. All persons involved in evaluating the bids must sign the evaluation report.
d. All notes taken during the evaluation must be kept in their original form and retained on the
procurement file for audit purposes.
Some sectors/regions have developed checklists to assist contracting officers in the tabulation of bids. They
should be used where available.
5.110 Communications before Contract Award

(2013-06-27)
a. Before contract award, contracting officers must advise suppliers that, if they are non compliant to the
requirements of the Federal Contractors Program for employment equity, they will not be awarded a
contract except in limited circumstances. See Annex 5.1: Federal Contractors Program for Employment
Equity for specific exemptions on ship construction and refit.
b. Particular care is required where bid validity period may require extension. (See 5.90 Extending the Bid
Validity Period.)
Note: No information about other bids may be released. Disclosure of information after contract award
is covered in 7.45 Disclosure of Information.
5.110.1 Early Notification for Ship Construction and Refit

(2010-01-11)
a. For new ship construction and ship refit contracts awarded by Public Works and Government Services
Canada headquarters, contracting officers will notify bidders whether their bid is among the two most
favorable and responsive when:
i. there are more than two responsive bidders;
ii. a lengthy approval process is anticipated (generally for contracts requiring approval above the
director general level); and,
iii. none of the following circumstances apply:
A. all bids received are extremely close; or
B. the manager feels that notifying bidders of bid status would not be in the best interests of
Canada.
b. For shipbuilding or ship refit contracts that do not fall within the normal criteria, contracting officers
should consult with the Senior Director, Marine Systems Directorate (SD/MSD), Defence and Major
Projects Sector.
c. Early notification before contract award can only be made after the SD/ MSD has recommended the
"Contract Request" form PWGSC- TPSGC 1151-2 .
d. Bidders will be advised of the circumstances under which notification of their status may be withheld.
e. Bidders whose bids are clearly not the two most favourable responsive bids will be permitted to
withdraw their bids upon written application to the contracting officer.
Annex 5.1: Federal Contractors Program for Employment Equity

(2017-11-28)
1. Background
The Federal Contractors Program (FCP) for employment equity is intended to address employment
disadvantages for the four designated groups: women, Aboriginal peoples, persons with disabilities and
members of visible minorities. Its goal is to achieve equality so that no person is denied employment
opportunities for reasons unrelated to ability.
In June 2013, a streamlined FCP was introduced with a focus on results and enables contractors to
determine which initiatives best suit their organization in their efforts to achieve employment equity
objectives. The Program threshold is $1,000,000 and the ineligibility sanctions apply to all contracts for
the acquisition of goods and services.
The requirements of the FCP are set out in the Treasury Board Contracting Policy (http://www.tbs-
sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text) (sections 4.2.5 and 8.3.1, and Appendix D).
General information on the FCP is available on the Employment and Social Development Canada
(ESDC)-Labour Program website.
2. Application
a. The FCP for employment equity applies to:
i. procurements made on behalf of a federal department or agency listed under Schedule I,

column I of Schedule I.1 or Schedule II of the Financial Administration Act (FAA) (for
example, the Canadian Commercial Corporation, being listed in Schedule III, is not subject
to the FCP) and who are covered by the Treasury Board Contracting Policy; and
ii. all contracts and standing offers for the acquisition of goods and services, with the
exception of those for:
A. the purchase or lease of real property;
B. construction (construction does not include architecture and engineering which are
subject to the FCP).
b. The FCP imposes particular obligations onto Contracting/Standing Offer Authorities and
Contractors when:
i. contractors are to be awarded contracts estimated at $1,000,000 or more (including all

applicable taxes and not including options) or issued a Standing Offer (SO) where the call-
up limitation is $1,000,000 or more (including all applicable taxes);
ii. a bidder/offeror:
A. is not regulated by the Employment Equity Act (for example, provincially regulated
entities, entities registered in foreign countries, etc.);
B. has a combined workforce in Canada of 100 or more permanent full-time and/or

permanent part-time employees;
C. is doing business directly with Canada (being the prime contractor with Canada and
not a subcontractor).
3. Obligations of Contractors subject to the FCP for Employment Equity
a. A bidder/offeror who is subject to the FCP, must have an Agreement to Implement Employment
Equity (AIEE) (http://www.servicecanada.gc.ca/cgi-bin/search/eforms/index.cgi?app=prfl&frm=lab1168&ln=eng) in
place with ESDC-Labour Program or must complete and sign an AIEE form and send to ESDC-
Labour Program before contract award or issuance of a standing offer.
b. If the bidder/offeror is a joint venture, each member of the joint venture must determine if it is
subject to the FCP and if so, comply with the requirements to have an AIEE in place as per
subsection a. above.
c. Once a bidder/offeror subject to the FCP is awarded a contract or issued a standing offer for call-
ups estimated at $1,000,000 or more, the contractor/offeror is required to honour its AIEE
commitment to implement employment equity. This commitment is ongoing and not simply for
the period of the contract or the standing offer for which it was initially signed.
4. Obligations of Contracting/Standing Offer Authorities

Once it has been determined that the client department or agency and the nature of the requirement are
subject to the Federal Contractor’s Program (FCP), the Contracting/Standing Offer Authorities should
request and obtain from the bidders/suppliers, as appropriate, the necessary evidence of compliance with
the FCP, namely a valid and current Agreement to Implement Employment Equity (AIEE) duly signed
by an authorized executive of the company or a valid AIEE number issued by Employment and Social
Development Canada – Labour (ESDC – Labour). The accuracy of the AIEE number can be confirmed
by comparing it with the number listed for that organization/bidder in the FCP List of Certified
Employers on the Federal Contractors Program (http://www.gcpedia.gc.ca/wiki/Federal_Contractors_Program)
page.
Contracting/Standing Offer Authorities have, under the FCP for employment equity, different sets of
obligations depending on the nature of the procurement document and the estimated value of the
resulting contracts or call-ups against a standing offer (including all applicable taxes).
a. Request for Supply Arrangement (RFSA)

For an RFSA, the standard procurement template
(http://www.gcpedia.gc.ca/wiki/Standard_Procurement_Templates#Request_for_Supply_Arrangements_Template_.28RFSA.29)
should include an advance notice (Part 6 B – Resulting contract clauses) to inform suppliers of the
possibility that the FCP may eventually apply to the procurement documents to be issued from the
Supply Arrangements.
b. Contracts estimated at under $1,000,000

For contracts estimated at under $1,000,000 (including all applicable taxes and not including
options) and Standing Offers with a call-up limitation for either PWGSC or a client department
under $1,000,000 (including all applicable taxes):
i. In Standing Offers, the "Limitation of Call-ups" clause of Part 7A– Standing Offer is to
indicate an amount under $1,000,000.
ii. All bid solicitation documents and Requests for Standing Offers are to include a
certification by the bidder/offeror, as proposed in Part 5 of the standard procurement
templates, declaring that the bidder/offeror is not listed on the FCP Limited Eligibility to
Bid list on the Federal Contractors Program
(http://www.gcpedia.gc.ca/wiki/Federal_Contractors_Program) page. (For exceptions, see article 5 of
this Annex.)
iii. At the time of contract award/issuing of a Standing Offer, the Contracting/Standing Offer
Authority is to verify the accuracy of such certification using ESDC-Labour Program’s FCP
"Limited Eligibility to Bid" list based on the names appearing on the bid/offer. If the name
of the bidder/offeror, or even only one name within a bidder’s/offeror’s list of members if
the bidder/offeror is a joint venture, appears on the list then the bid/offer is non-responsive.
iv. In Standing Offers, the "Certifications" clause of Part 7A– Standing Offer, is to indicate that
if the offeror gets listed by ESDC-Labour Program on the "FCP Limited Eligibility to Bid"
list for not complying with employment equity requirements during the period of the
Standing Offer, the standing offer may be set-aside. The Policy, Risk, Integrity and
Strategic Management Sector will inform Standing Offer Authorities if any offeror gets
added to the "FCP Limited Eligibility to Bid" list. In such circumstances, the Standing
Offer Authorities will follow the usual PWGSC’s setting-aside assessment procedures
which include consideration of the elements listed under article 5 of this Annex.
v. In a competitive process, where multiple bids/offers have been received, the

bidders/offerors will be considered non-compliant if the bidder's/offeror's name is on the
"FCP Limited Eligibility to Bid" list. In such a competitive process, Contracting/Standing
Offer Authorities should consider verifying if the bidder’s/offeror’s name is on the list prior
to beginning the evaluation process so as to avoid unnecessary work for themselves and
their clients. There is no requirement to evaluate bids that are non-responsive.
c. Contracts estimated at $1,000,000 or above

For contracts estimated at $1,000,000 or above (including all applicable taxes and not including
options) and Standing Offers with a call-up limitation for either PWGSC or a client department at
$1,000,000 or above (including all applicable taxes):
i. The obligations mentioned at paragraphs i. to iv. of subsection b. above are also applicable
to contracts estimated to be at $1,000,000 and above (including all applicable taxes and not
including options) and Standing Offers with call-up limitations at $1,000,000 and above
(including all applicable taxes);
ii. Contracting/Standing Offer Authorities are to include a second certification, this time
regarding factual information on the bidders/offerors, as shown in Part 5 - Certifications of
the standard procurement templates and in the titled Federal Contractors Program for
Employment Equity - Certification. This second certification is also required at the time of
contract award/issuing of a Standing Offer. The information collected is to be used by the
Contracting/Standing Offer Authority to determine if the bidders/offerors are subject or not
to the FCP and consequently to determine which clauses to include or not into the
procurement document.
A. When the bidder/offeror is not subject to the FCP, there will be no other clauses to
add to the procurement document.
B. When the bidder is subject to the FCP, a clause allowing for the termination of the
contract in the event that the bidder would become in breach to the AIEE and be
added to the "FCP Limited Eligibility to Bid" list, is to be inserted, as indicated in the
standard procurement templates. If such event was to occur, the Contracting
Authorities would then follow the usual PWGSC’s termination assessment
procedures, which includes consideration of the elements listed under article 5 of this
Annex.
C. As indicated in paragraph iv. of subsection b. above, all Standing offers are to include
a clause allowing for the set-aside of a Standing Offer in the event that the offeror
would become in breach of the AIEE and be added to the "FCP Limited Eligibility to
Bid" list. When the offeror is subject to the FCP and call-ups are estimated to be at
$1,000,000 and above, an additional clause allowing for the termination of the call-up
is also to be inserted as indicated in the standard procurement templates. For call-ups
at $1,000,000 or above if a breach was to occur, the Standing Offer Authorities would
then follow the usual PWGSC’s termination assessment procedures, which includes
consideration of the elements listed under article 5 of this Annex. There is no such
requirement for call-ups under $1,000,000 (including all applicable taxes).
5. Exceptions
a. In a non-competitive situation, if a bidder’s/offeror's name appears on the "FCP Limited

Eligibility to Bid" list, such bidder/offeror should not be awarded a contract or issued a standing
offer unless required to do so by law or legal proceedings, or when Canada considers it necessary
to the public interest for reasons which include, but are not limited to:
i. Only one person is capable of performing the contract/standing offer
ii. Emergency
iii. National security
iv. Health and safety
v. Economic harm
b. The Contracting/Standing Offer Authority is to obtain prior approval from its Director General or
its Regional Director General and document its file. The Contracting/Standing Offer Authority
should communicate an exception to ESDC-Labour Program at ee-eme@hrsdc-rhdsc.gc.ca.
Annex 5.2: Handling, Custody and Safekeeping of Financial Security/Handling of Bills of

Exchange
(2010-01-11)
a. A bill of exchange tendered as a security deposit in connection with a bid for a contract must be held
uncashed in a secure and fireproof place until the successful bid is selected or for up to one year,
whichever occurs first. (If at the end of one year the contract still has not been awarded, the contracting
officer must exchange the bill of exchange for a current-dated one.) The Bid Receiving Unit (BRU)
sends security deposits received with headquarters bids to the Finance Sector, Public Works and
Government Services Canada (PWGSC), for safekeeping. The BRU sends three copies of the list
together with the deposits to the Finance Sector, showing beside the name of each bidder, the amount
and nature of the deposit (for example, certified cheque, bonds). The Finance Sector signs and returns
two copies of the list to the BRU, who sends one copy to the contracting officer.
b. When a bid is accepted and the bill of exchange is then required as security until completion of the
contract, a contractor may request PWGSC to hold and not cash the bill of exchange. It should be stored
in approved security equipment by the directorate. If the directorate does not have adequate facilities, it
should be sent to the Financial Operations Directorate (FOD), which will arrange for storage. If the
contractor makes no such request, the bill of exchange must be forwarded to the FOD for deposit in the
Consolidated Revenue Fund (CRF).
c. When a bid is rejected or accepted and the bill of exchange submitted in connection with the bid is not
required as security until completion of the contract, the bill of exchange is returned to the contractor.
d. Bills of exchange received as contract security must be forwarded immediately to FOD for deposit in
the CRF, in accordance with the Receipt and Deposit of Public Money Regulations.
e. A security deposit provided as collateral for the return of plans and specifications will be forfeited if
those plans and specifications are not returned in time and in satisfactory condition. Furthermore, the
contracting officer must so inform the Manager, FOD.
1. Government Guaranteed Bonds, Bills of Exchange and Letters of Credit

The Finance Sector must ensure that the receipt of bills of exchange and/or government guaranteed
bonds and/or irrevocable standby letters of credit is recorded in the accounting records of PWGSC and
that it is also appropriately recorded in the Accounts of Canada, as an asset and a liability. Directorates
must promptly notify the Finance Sector of all such receipts, regardless of whether they are held by the
directorate.
2. Safekeeping of Bonds, Negotiable Instruments and Letters of Credit
a. There are three acceptable methods for the safekeeping of government bonds, negotiable
instruments and letters of credit:
i. custody by FOD, which was established to provide a safekeeping service for securities and
any other valuable assets requiring theft-proof storage;
ii. storage by the directorate in approved security equipment, in accordance with Part II of the
Government Contracts Regulations; or
iii. storage by the Security Deposit Division, 350 King Edward Ave, Ottawa.
b. The adequacy of departmental security equipment can be assessed by referring to the PWGSC
Security Equipment Catalogue, which lists equipment that is approved for the storage of
negotiable instruments. Canadian Industrial Security Directorate assistance is also available on
this subject.
c. Where proper security equipment is not available, all security deposits (government guaranteed
bonds, bills of exchange, irrevocable standby letters of credit) must be forwarded to FOD for
safekeeping using a PWGSC deposit form entitled "Contractor's Security Deposit".
d. To lessen the risk of loss, bonds should be transmitted directly to FOD from wherever the
contracting authority first receives the security (for example, if a bond is received in a regional
office, it should not be routed to Headquarters but sent directly to FOD).
e. When transmitting bonds from PWGSC to FOD(or to the owner when the securities are held by
directorates), registered and hypothecated bonds must be transmitted by registered mail. Bearer
bonds may be transmitted by "money packet" or bonded courier, armoured car service or a courier
provided from within departmental resources.
f. When bearer bonds are transmitted by the "money packet" system, the maximum indemnity from
Canada Post is $100; therefore, appropriate additional insurance should be considered. (For the
examination and management of risks, directorates should refer to the Treasury Board Policy Risk
Management - Policies and Publications (http://www.tbs-
sct.gc.ca/pubs_pol/dcgpubs/riskmanagement/siglist_e.asp) .)
g. While coupon-bearer bonds are in its custody, FOD is responsible for their security and for
clipping matured coupons and remitting them, as directed by the contracting officer.
6 Chapter 6 - Approvals and Authorities

(2012-01-18)
6.1 Approvals and authorities - General information

(2015-09-24)
a. This chapter addresses the various types of plans, reviews and approval processes associated with
procurement based on the different authority levels. These forms and approval processes apply to
contracts/standing offers and supply arrangements. It also contains the authorities for approving and
signing procurement documents and details special approval considerations and exceptions to approval
authorities. Contracting officers will also find information for interpreting and using the authorities.
b. Contracts are entered into by Her Majesty the Queen as represented by a minister. The authority to enter
into contracts is generally in the legislation constituting the department and conferring certain powers on
the minister. The Department of Public Works and Government Services Act confers the Minister's
contracting authority. The Minister's authority is delegated to officers throughout the Department in
order to carry out the internal contract process.
c. The financial limits are established by Treasury Board pursuant to the Financial Administration Act and
are set out in the Treasury Board Contracts Directive (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?
id=14494&section=text#appC) .
d. Contracting officers are delegated authorities to enter into contracts and to sign and amend contracts in
accordance with the level of responsibility of the position they occupy. Details of the delegated
authorities and obligations are provided in 6.20 Contract Approval and Signing Authorities.
e. Contracting officers must not split contracts or contract amendments in order to avoid obtaining either
the approval required by statute, the Treasury Board Contract Directives or appropriate management
approval. Furthermore, contracts must not be split to avoid Canada's obligations under national or
international trade agreements, or the application of Public Works and Government Services Canada
(PWGSC) procurement policies.
6.5 Procurement Approval Documents

(2014-09-25)
a. The commodity, the associated risks, the dollar value of a procurement and other factors such as an
emergency or the stage in the procurement process will determine the level of approval that contracting
officers will need to seek, as well as the associated process that will be followed. To determine the
appropriate approval level and approval document required, contracting officers must refer to the
approval authorities for various commodities and other considerations outlined in 6.20 Contract
Approval and Signing Authorities.
b. The different types of approval processes or forms are listed below:
i. Procurement Plan;
ii. Contract Planning and Advance Approval (CPAA);
iii. CPAA Resubmission;
iv. Contract Summary;
v. Contract Request;
vi. Treasury Board Submission;
vii. Contract Amendment Request.
c. The sections below describe these documents. The approval documents may require additional reviews
as detailed in 6.10 Additional Reviews.
d. Before the contracting officer takes any significant procurement actions, the procurement strategy must
be approved. Significant procurement actions include, but are not limited to, publishing an Advance
Contract Award Notice (ACAN), a Notice of Proposed Procurement (NPP), the solicitation or the
commencement of negotiations.
e. When invoking 6.(d) of the Government Contracts Regulations (GCRs), all procurements must have
appended to all approval documents, and documented on file, answers to the seven questions at Annex
3.1: Treasury Board Questions for Sole Source.
6.5.1 Procurement Plan

(2010-01-11)
a. The Procurement Plan is a document that sets out the intended strategy for how a procurement will be
carried out before any significant procurement actions are performed, such as the posting of an ACAN
or the commencement of negotiations. The procurement plan is a key point for discussing and reviewing
such matters as competition or sole source and industrial and regional benefits.
b. Before issuing a solicitation for any procurement, contracting officers must obtain approval for the
procurement plan at the appropriate level. The appropriate approval document must be used depending
on the approval authority level required, as indicated in 6.5.1.1 Procurement Plan for Procurements
below Director General Level and 6.5.1.5 Formal Procurement Plan. Before issuance of the resulting
contract, the contracting officer will also need to seek contract approval.
c. There are two forms available for procurement plans:
i. the Procurement Plan for procurements at or below director general approval level; and,
ii. the Formal Procurement Plan template.
6.5.1.1 Procurement Plan for Procurements below Director General Level

(2014-09-25)
a. The procurement plan form is used for procurements estimated to be at or below director general level
when there is insufficient information to obtain advance approval for contract entry.
b. For procurements within Departmental Delegation of Authority, contracting officers may use the
procurement plan available in the Automated Buyer Environment, or a similar form. A procurement risk
assessment must be performed prior to completing the procurement plan and be attached to it. The
procurement plan must provide details surrounding the medium-high and high risks with proposed
mitigation strategies, as necessary.
c. For procurements outside the Department’s authority, the procurement plan must be prepared as a
memorandum from the Senior Director (or Director) to the Director General or Regional Director
General. It must include the elements identified in Annex 6.1 Procurement Plan Instructions.
d. The procurement plans are prepared for the signature of the appropriate approval authority. Contracting
officers should refer to section 3.1.1 Planning the Procurement for a list of some items that could be
included in the procurement plan.
e. For non-competitive procurements including those non-competitive requirements with a posted

Advance Contract Award Notice, a copy of the signed approved formal procurement plan must be sent
to the Assistant Deputy Minister within 48 hours after they are approved by the Director
General/Regional Director General.
f. If there are significant changes to the original procurement plan, the complexity level must be reviewed,
a new risk assessment must be performed, Risk Management Advisory Services consulted if required,
and the procurement plan must be resubmitted.
6.5.1.5 Formal Procurement Plan for Complexity Levels 4 and 5

(2014-09-25)
a. The formal procurement plan is required for the approval of the procurement strategy and is prepared
for all procurements requiring contract entry approval at or above the Assistant Deputy Minister,
Acquisitions Branch.
b. The Assistant Deputy Minister will approve formal procurement plans for Complexity Levels 4 and 5
inclusive.
c. Contracting officers should prepare the formal procurement plan in accordance with the template at
Annex 6.1 Procurement Plan Instructions.
d. The formal procurement plan must provide details surrounding the medium, medium-high and high
risks with proposed mitigation strategies, as determined by the risk assessment. The risk assessment
must accompany the formal procurement plan.
e. If there are significant changes to the original procurement plan, the complexity level must be reviewed,
a new risk assessment must be performed, Risk Management Advisory Services consulted, and the
procurement plan must be resubmitted.
6.5.5 Contract Planning and Advance Approval

(2014-09-25)
a. The Contract Planning and Advance Approval (CPAA) process allows for the approval of the
Procurement Strategy and pre-approval for contract entry.
b. The CPAA is used for approvals up to and including director general and regional director general,
unless a procurement plan applies to the procurement (see 6.5.1 Procurement Plan).
c. The CPAA should not be used if there is insufficient known information about the expected results of
the procurement action.
d. A Procurement Risk Assessment must be performed prior to completing the CPAA and accompany the
CPAA document when presented for approval. The CPAA must provide details surrounding the
medium-high and high risks along with proposed mitigation strategies, as necessary.
e. The CPAA process allows contracting officers to issue contracts/standing offers/supply arrangements
without further review by the approval authority when there are no significant changes to the
procurement strategy in the approved CPAA. Following approval of the CPAA, the contracting officer
will proceed with the procurement action until the contract is ready to be awarded. If the procurement
action results in a significant change from the originally approved procurement strategy before the
contract is awarded, a new procurement risk assessment must be performed and new approval sought,
based on the outcome in accordance with 6.5.5.5 Contract Request or Contract Planning and Advance
Approval (CPAA) Resubmission.
f. Contracting officers must summarize actions taken between approval of procurement strategy and
contract entry through the use of the Contract Summary as detailed in 6.5.5.10 Contract Summary.
6.5.5.1 Contract Planning and Advance Approval Instructions

(2014-09-25)
a. Contracting officers must complete the Contract Planning and Advance Approval (CPAA) form and
explain the procurement strategy.
b. Contracting officers should include the following information, as applicable:
i. proposal/description: state the action proposed (e.g. to obtain approval to; to obtain advance
approval) including all approvals being requested (e.g. approval to make advance payments,
advance approval to firm up interim rates). Describe the requirement including options, if
applicable;
ii. total estimated cost of the requirement (including all advance approvals, duties and taxes);
iii. under Remarks: address applicable issues such as:
A. for competitive procurements, state whether Government Electronic Tendering Service

(GETS) or other public advertising, source lists (i.e., one time, ongoing), etc. will be used.
If GETS is not being utilized to compete the requirement, an explanation must be provided;
B. when a non-competitive (sole source) procurement strategy is chosen, state the legal
authority to use an exception to competitive bidding (see 3.15 Non-competitive Contracting
Process);
C. describe the risks and proposed risk mitigation strategies associated with the procurement,
in accordance with current policies, procedures and practices.
iv. policy issues: identify any socio-economic considerations or deviations from policy and
recommended course of action;
v. provide details surrounding the medium-high and high risks related to the procurement with
proposed mitigation strategies;
vi. evaluation criteria: identify the evaluation criteria and the solicitation method to be used including
the pricing basis, mandatory and/or point rating criteria;
vii. contractor selection method: selection method to be used;
viii. milestones: give target dates for important milestones (e.g. bid solicitation, contract award,
delivery schedule);
ix. additional remarks: indicate any additional information that should be brought to the attention of
the approval authority .
c. On receipt of the submission, the approval authority will, within two working days, review it and either
grant full approval to proceed or identify concerns and direct changes to the proposed strategy. The
approval authority may also approve the procurement strategy but not grant advance approval to enter
into contract, in which case a Contract Request must be prepared and submitted for approval prior to
contract entry. (See Annex 6.4: Conditions Imposed on the Approval Authority Limits for Public Works
and Government Services Canada Personnel relative to conditions imposed on the approval authority
limits).
d. Following approval of the CPAA, the contracting officer will proceed with the procurement action. If
the procurement action results in a significant change from the originally approved plan before the
contract is awarded, the CPAA must be resubmitted in accordance with 6.5.5.5 Contract Request or
Contract Planning and Advance Approval (CPAA) Resubmission. If there is no significant change, the
contracting officer will prepare the contract.
6.5.5.5 Contract Request or Contract Planning and Advance Approval (CPAA)

Resubmission
(2014-09-25)
a. The Contract Request or Contract Planning and Advance Approval (CPAA) Resubmission is used when
there is significant change to the procurement strategy (e.g. non-competitive requirement has changed to
competitive, or vice versa).
b. The reasons why the procurement strategy has changed and the additional risks, or changes to the
already identified risks associated with the procurement must be explained in details in the Contract
Request/CPAA, together with the proposed mitigation strategies.
c. If there has been a change to the complexity or risks, the Procurement Complexity Assessment (PCA)
must be updated and another version of the procurement risk assessment at the appropriate complexity
level must be performed and accompany the procurement approval documents prior to completing the
Contract Request/CPAA Resubmission.
d. Contracting officers must submit the Contract Request/CPAA Resubmission to the appropriate approval
authority in accordance with sector and region procedures.
e. Once the approval is received, the contracting officer will proceed with the procurement action required.
f. See Annex 6.2 Contract Request Instructions for instructions on the preparation of the contract request.
6.5.5.10 Contract Summary

(2012-04-05)
The Contract Summary is used pursuant to an approved CPAA to document the actions taken from the time the
CPAA was approved and prior to the issuance of a contract/standing offer/supply arrangement (including the
results of the bid evaluation and contractor selection).
6.5.10 Contract Request

(2014-09-25)
With the promulgation of PN105R1 - Procurement Complexity Levels, Risk Assessment and Approval
Authorities, the content of this section was reviewed and incorporated in section 6.5.5.5 Contract Request or
Contract Planning and Advance Approval (CPAA) Resubmission.
6.5.15 Treasury Board Submission

(2013-06-27)
a. A Treasury Board (TB) submission is an official document submitted by the Minister on behalf of a
department and is used to seek approval from TB ministers when there is a requirement for TB
approval. TB approval is required for any contract or contract amendment exceeding the limits outlined
in Annex 6.4: Conditions Imposed on the Approval Authority Limits for Public Works and Government
Services Canada Personnel.
b. A TB submission can also be used to seek advance approval (e.g., at the stage when the procurement
strategy has not been fully developed) with appropriate justification. TB ministers base their decision to
approve, in this circumstance, on the information provided in the remarks section of the TB submission.
Treasury Board Secretariat (TBS) analysts include in the analysis a risk assessment of the elements in
the solicitation process outlined in the submission. If at any point during the bid solicitation process
there is any deviation from what has been stated in the TB submission, the contracting officer must
contact the TBS analyst to determine whether the change warrants further action, such as a letter to the
TB President or a new TB submission. Contracting officers are to keep written advice from the TBS
analyst on the procurement file.
c. Contracting officers must prepare TB submissions in accordance with the following:
i. the TB guidelines found in its publication: ARCHIVED - A Guide to Preparing Treasury Board
Submissions (http://www.tbs-sct.gc.ca/pubs_pol/opepubs/tbm_162/gptbs-gppct-eng.asp) and supplemented by
the Acquisitions Branch (AB) "Treasury Board Submission Guide for Goods or Services
Contracting", which contains the most recent requirements provided by TBS. It is recommended
that contracting officers consult TB Submission Division of the Business Management Sector,
Acquisitions Branch for further guidance.
ii. the following substantiation, as required, must be included in all TB submissions:
A. submissions seeking approval of a non-competitive contract must provide an explicit and

compelling rationale for not using a competitive process;
B. submissions seeking approval for a competitive or non-competitive contract must provide

an assessment of the extent to which TB approval of the proposals could limit, or
encourage, the competitiveness of related procurement activities in the future; and
C. submissions seeking Treasury Board approval of contracts should address compliance with
the Federal Contractors Program (FCP) for employment equity. Consult Annex 5.1: Federal
Contractors Program for Employment Equity for more information.
d. Proposed contracts and contract amendments, which require TB approval, must be approved by TB
before they are entered into and before any work has begun.
e. Public Works and Government Services Canada (PWGSC) cannot enter into a contract, or make any
contractual commitment (e.g., Letter of Intent), which constitutes the first step of a project that may
subsequently require TB consideration and approval.
f. When TB has approved an amendment, PWGSC may further amend the contract without TB approval if
the cumulative value of the amendments after each issuance of an amendment pursuant to a TB approval
does not exceed the non-competitive amendment level set out in Annex 6.4: Conditions Imposed on the
Approval Authority Limits for Public Works and Government Services Canada Personnel.
g. TB approval is also required for a number of areas described in the TB directives and circulars, as well
as for the making of any "extra payment," i.e., a payment where a legal liability does not exist or has not
been accepted by Canada, or where there is uncertainty that a legal liability exists under the contract.
6.5.15.1 Procurements Requiring a Treasury Board Submission

(2014-09-25)
a. For Complexity Levels 1 through 3 inclusive, the contracting officer must complete a procurement risk
assessment at the procurement strategy stage, and contact Risk Management Advisory Services
(RMAS) once completed to discuss the results of the procurement risk assessment.
b. For Complexity Levels 4 and 5, the contracting officer must contact RMAS who will work in
cooperation at the procurement strategy stage in completing a custom risk assessment specific to the
complexities of a Level 4 or 5 procurement.
c. The contracting officer and RMAS will collaborate on the preparation of the Risk and Mitigation
Strategy section in the Treasury Board (TB) submission and select up to five key risks, scoring medium,
medium high or high that summarize the risk assessment. Each risk in the TB submission narrative must
contain the following elements:
i. The risk statement, describing what harm may occur, the likelihood of it occurring and its impact
on the procurement and/or the organization;
ii. The risk response strategy, summarizing the actions, or procurement factors, that may reduce the
likelihood or severity of the risk; and,
iii. The residual or remaining level of risk to the procurement after taking into account the risk
response measures.
d. Results of each TB submission risk assessment are maintained by the Risk Management Advisory
Services and are reported to Acquisitions Branch operational sectors and regions, summarizing
assessment activity and key findings.
6.5.15.2 Translation
(2011-10-04)
a. Part 1 of the TB submissions must be prepared in both official languages, presented side by side.
b. When translation services are required for a technical or specialized document, it is helpful to send the
translators a copy of an early draft so that any required terminology research may commence in order to
expedite translation. Departmental standard procurement templates or other templates that have been
translated and approved must be provided as a reference guide to the Translation Bureau to ensure
consistency of terminology.
c. Contract amendment requests requiring TB approval must be prepared in a bilingual format using the
form PWGSC-TPSGC 1151-1 , Contract Request/Contract Amendment Request.
6.5.15.5 Retroactive Approval of Contract

(2010-01-11)
TB ministers will entertain submissions requesting retroactive approval of a contract or contract amendment
only under exceptional circumstances, e.g., urgent cases involving public safety or security, incidents or cost
overruns. In such cases, TB requires certification that the minister concerned agreed to the commencement of
the work before receiving TB approval including a full report on the reasons, the managerial responsibilities
involved and corrective actions taken.
6.5.20 Contract Amendment

(2012-04-05)
a. The contract amendment approval document is used to seek approval to amend a contract/standing
offer/supply arrangement. The amendment approval authority required will determine the document to
be used. The amendment approval documents are:
i. the "Contract Amendment Request" form is used for director general and regional director general
approval and below, at the sector's or region's discretion;
ii. the form PWGSC-TPSGC 1151-1 , Contract and Contract Amendment Request, must be used
for assistant deputy minister approval;
iii. the TB submission form, available in the TB publication A Guide to Preparing Treasury Board
Submissions (http://www.tbs-sct.gc.ca/pubs_pol/opepubs/tbm_162/gptbs-gppct-eng.asp) , must be used for
amendments requiring TB approvals;
iv. see Annex 6.3: Preparation of Contract Amendment Approval Documents for instructions on the
preparation of contract amendment approval documents listed in (i) and (ii) above. For TB
submissions, see 6.5.15 Treasury Board Submission.
6.10 Additional Reviews

(2010-01-11)
The contracting officer is responsible for ensuring that the procurement document(s) receive appropriate review
and approval by the proper area or authority. Below are some of the reviewing authorities that must be
consulted before or during the approval process.
6.10.1 Contract Quality Control Review

(2014-09-25)
A review of the procurement by Quality Control and Support Services Division or Regional Quality Assurance
is within the discretion of the contracting officer or the approval authority. The appropriate review body will
provide written comments regarding the accuracy and adequacy of the approval documents to the contracting
officer.
6.10.5 Legal Services Review

(2014-09-25)
a. Legal Services must be consulted when the contracting officer is considering a deviation from Standard
Acquisition Clauses and Conditions (SACC) Manual clauses or the departmental standard procurement
templates or the departmental standard procurement templates, or commodity or sector-based legally
approved templates.
b. Legal Services must review any requests for lessening Canada's full rights at law, a disclaimer,
limitation of the contractor's liability, or decrease of the warranty time period. The proposed changes
must also be acceptable to the client, and form part of the request for approval.
c. A review by Legal Services is within the discretion of the contracting officer or the approval authority,
except in those instances that are mandated by policies and directives within the Acquisitions Program
(for example, for sensitive requirements).
d. See section 3.110 Legal Services for other situations requiring consultation with Legal Services.
6.10.10 Cost and price analysis services

(2017-11-28)
a. Mandatory Use of Cost and Price Analysis Services

Contracting officers must contact a cost analyst for:
any Treasury Board submission;
a contract or contract amendment requests; or
Contract Planning and Advance Approval;
which meets any of the mandatory conditions set out in the Directive on the Use of Cost and Price
Analysis Services
(http://www.gcpedia.gc.ca/gcwiki/images/d/d0/Directive_on_the_Use_of_Cost_and_Price_Analysis_FINAL_EN.pdf) (PDF).
The cost analyst will determine if further analysis or review is required.
Refer to the Directive for specific conditions, process, contact information and roles and
responsibilities.
b. Discretionary Use of Cost and Price Analysis Services

Apart from the mandatory conditions where they must be consulted, cost analysts are always available
for consultation on any procurement on a discretionary basis. Refer to the Guideline on the Use of Cost
and Price Analysis Services
(http://www.gcpedia.gc.ca/gcwiki/images/d/dd/Guideline_on_the_Use_of_Cost_and_Profit_Analysis_FINAL_EN.pdf) (PDF)
for more information on available services.

(2010-01-11)
Contracting officers should ensure that any industrial security requirement is addressed in the approval
documents and that the Canadian Industrial Security Directorate (CISD) has done a review as appropriate. For
more information on industrial security, see 4.30.10 Industrial Security in Contracts to 4.30.30 Foreign
Ownership, Control or Influence and 5.15 Verifying Compliance with Security Requirements.
6.10.20 Client Department Review

(2012-04-05)
a. Client departments must review and provide their written concurrence that the client’s input into the
solicitation document (e.g. Statement of Work, Statement of Requirement, specification, evaluation) is
accurately reflected within the solicitation document and the TB submission, in accordance with Annex
1.1: Matrix of Responsibilities between PWGSC and Client Departments for the Procurement of Goods
and Services (Generic) and Annex 1.2: Specific Division of Responsibilities Agreements.
b. For the generic division of anticipated types of responsibilities between PWGSC and client departments,
consult Annex 1.1: Matrix of Responsibilities between PWGSC and Client Departments for the
Procurement of Goods and Services (Generic); for the two client-specific agreements with the
Department of National Defence, consult Annex 1.2: Specific Division of Responsibilities Agreements.
c. A specific procurement may require the modification or deletion of individual conditions. These
changes must be discussed with the client before inclusion in the solicitation or contract/standing
offer/supply arrangement, to ensure that complete understanding exists as to the extent of the client's
rights and responsibilities. For the responsibilities of the client department with respect to the
solicitation, see 4.75.1 Client Department Review of Elements of a Solicitation.
6.20 Contract Approval and Signing Authorities

(2014-09-25)
a. The internal approval and signing authorities, the conditions imposed on the approval authority limits,
the exceptions to the approval authority limits and other guidelines are contained in the annexes of this
chapter.
b. Contract approval and signing authorities in support of clients' programs must be exercised in
accordance with the applicable legislation and regulations, and within PWGSC policies and guidelines.
c. The contract approval and signing authorities detailed in Annex 6.4.2: Contracting Limits including
Exceptional Authorities are applicable to procurement requirements from client departments including
when Public Works and Government Services Canada (PWGSC) is a client.
d. The contract approval and signing authorities in support of clients' programs apply to all contractual
documents and arrangements, including the following:
purchase orders;
contracts;
formal agreements and arrangements (e.g., Interdepartmental Memorandum of Understanding

(MOU));
standing offers and supply arrangements;
letters of intent;
go-ahead letters and go-ahead messages;
Stores Transfer Orders;
Supply Transfer Orders;
written direction to the Agency of Record (e.g., work authorization);
assignments;
consents to subcontract;
termination for convenience notices; and
amendments to any of the above.
e. Conditions and limits set out in Annex 6.4: Conditions Imposed on the Approval Authority Limits for
Public Works and Government Services Canada Personnel will apply to the approval and signing of all
contractual documents and arrangements, including those arrangements that are not subject to the
Government Contracts Regulations and Treasury Board Contracts Directive, unless approval and
signing limits are set out within an existing Memorandum of Understanding.
f. The Deputy Minister's approval is required when the value of transfer agreements between departments
(e.g., transfer orders with CORCAN) exceeds the approval limits set out in Annex 6.4.
g. Treasury Board approval is required when the value of contractual arrangements with provincial or
municipal governments, or provincial or federal Crown corporations exceeds the approval limits set out
in Annex 6.4.
h. Approval of contracts that include options must be sought in accordance with the total estimated cost
including any options for which funds are available or expected to be provided in the future (see Annex
6.4.6: Contract Amendment Approval Instructions).
i. More than one contractual document must not be issued, under any circumstance, in order to circumvent
the necessity of obtaining the proper approval authority.
j. If an Advance Contract Award Notice (ACAN) is published when directing a requirement to a specific
supplier or vendor for the purposes of contract approval authorities, the procurement is classified under
the "electronic bidding" category.
k. The electronic bidding approval levels apply whenever an ACAN has been posted and no valid
Statement of Capabilities was submitted. See Annex 6.4.2: Contracting Limits including Exceptional
Authorities.
6.20.1 Delegated Authority to Incumbents

(2010-01-11)
6.20.1.1 Responsibilities
(2015-09-24)
All the authorities granted to and exercised by contracting officers in PWGSC are provided subject to the
following:
a. if a contracting officer's responsibilities do not require the officer to exercise a particular authority (for
any type of authority or above a particular dollar level) then that contracting officer does not, in fact,
have that authority. Any and all authority granted to an incumbent of a position must be commensurate
with, but not greater than, the level required to carry out the responsibilities assigned to the incumbent;
and
b. it is a requirement that the relationship between responsibilities and authorities for each designated
contracting officer be recognized on individual delegation forms. See PWGSC Delegation of
Authorities Manual .
6.20.1.5 Incumbent
(2014-09-25)
a. Limits to the contract approval and signing authorities granted by the Minister and Deputy Minister to
incumbents of designated positions are as set out in Annex 6.4: Conditions Imposed on the Approval
Authority Limits for Public Works and Government Services Canada Personnel. These are maximum
limits which may be reduced at the discretion of the appropriate managers.
b. A person is normally designated the incumbent of a position following staffing action. Supervisors must
inform new incumbents of the levels of contract approval and signing authority to be exercised, by
signing an individual delegation form PWGSC-TPSGC 524, Delegation of Common Service

Acquisition Authorities – Schedule 3 (PDF 156 KB) - (Help on File Formats).
c. Contracting officers who have previously exercised contract approval and signing authorities in another
position may exercise, upon promotion, the authorities delegated to incumbents at the new level once a
new individual delegation form is completed and signed. General information on Delegation of
Authority Instruments is available to PWGSC employees on-line at Delegation of Authorities. Further
information on the principles of delegation of authority and proper use of the authorities is available at
Delegation Principles.
d. Directors general must withhold full contract approval and signing authorities from anyone who has had
no PWGSC purchasing/contracting experience until competence has been demonstrated at a lower level
of authority for at least six months.
e. To facilitate audit requirements, the signed original of the individual delegation form must be forwarded
to the Manager, Internal Delegations, Policy, Risk, Integrity and Strategic Management Sector
(PRISMS), Acquisitions Program Policy Directorate (APPD). Regional offices are requested to send a
copy of the signed form. A signed copy should be kept on file in the procurement area or central
location.
6.20.1.10 Acting Incumbent

(2010-01-11)
a. Designation of an acting incumbent for a position, to which a level of authority has been granted, must
be made by an authority level no less than that of the incumbent's supervisor.
b. The acting incumbent should normally be given the full contract approval and signing authorities of the
position. However, the acting incumbent must not exercise these authorities on a procurement file for
which the acting incumbent was responsible in the incumbent's normal position.
c. If an incumbent is to perform the duties of a position in an acting capacity for an indeterminate period,
then the incumbent's supervisor will delegate authorities by signing the individual delegation form
PWGSC-TPSGC 524 (PDF 156 KB) - (Help on File Formats), indicating the period that these
authorities are to be in effect.
d. In those situations where an incumbent must perform the duties of a position in an acting capacity for a
short period (e.g. vacation replacement), then the incumbent's supervisor will delegate authorities by
email, indicating the period that these authorities are to be in effect. An example of an email is as
follows:
Objet/ Subject: Absence de______________ / Absence of ______________
Par la présente je vous avise que l'employé(e) sous nommé(e) sera absent(e) pendant la période
spécifiée. Pour assurer la continuité des opérations, les pouvoirs contractuels seront délégués au(à la)
candidat(e) nommé(e) ci-dessous.
This is to advise that the individual named below will be absent for the specified period. To ensure
continuity of operations, acting contractual authorities have been delegated to the following appointee.
Personne absente/
Person Absent: ___________________
Titre du poste comblé/
Position Title occupied: ___________________
Période/ Period: ___________________
Candidat(e) nommé(e)/
Appointee's name: ___________________
Approuvé par/
Approved by: ___________________
e. The e-mail must be sent to the acting incumbent, with a copy to all contracting officers reporting to that
position, and the Senior Purchasing Assistant of the supervisor's immediate superior. In addition, a copy
of the e-mail must be placed on the file of any contractual document approved/signed by the incumbent
while exercising the acting authority.
6.25 Special Approval Considerations

(2010-01-11)
6.25.1 Go-Ahead Letters

(2010-01-11)
Go-ahead Letters may be issued after obtaining final approval of the contract submission, provided all
appropriate terms and conditions of the proposed contract are known and acceptable to the potential contractor.
Go-ahead Letters are subject to the appropriate signing authorities.
6.25.5 Forgiveness of Debts

(2010-01-11)
No PWGSC employee, without the appropriate delegated authority, is authorized to forgive debts arising out of
contractual actions and which are owed to Canada. For the authority to write-off debts refer to "Debt Write-Offs
(Deletion of Debts) " in the departmental Delegation of Authorities Instrument. For more information
regarding debt write-off, see Debt Write-off Regulations, 1994.
6.25.10 Waive of Interest

(2010-01-11)
No PWGSC employee is authorized to waive interest owed to Canada without the appropriate delegated
authority. For the authority to waive interest charges, refer to "Waive of Interest " in the departmental
Delegation of Authorities Instrument. For more information regarding waive of interest, see TB Interest and
Administrative Charges Regulations (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/tbm_142/iacr-eng.asp) .
6.25.15 Per Diem Rates

(2012-04-05)
This section of the Supply Manual has been removed as per ARCHIVED - Policy Notification 105 (PN-105).
6.25.20 Nil Value Amendment

(2010-01-11)
Nil value amendments involving a simple administrative change are the responsibility of each procurement
sector/region. For nil value amendments where risk or liability will be transferred to Canada, refer to Annex
6.4.8: Amendment Approval Instructions for all Complexities, section 11.
6.25.25 Financial Evaluation of Bids/Offers/Arrangements

(2014-09-25)
a. For any competitive procurement requiring contract entry approval of the Assistant Deputy Minister or
above, more than one employee of Public Works and Government Services Canada must be involved in
the evaluation of the prices. For more information on financial evaluation of bids/offers/arrangements,
see section 5.45 Financial Evaluation of Bids.
b. For competitive procurements under Complexity Levels 2 and 3, a peer review of the results of the bid
(technical and financial) evaluation and contractor selection must be obtained if determined by the
results of the procurement risk assessment.
c. For competitive procurements under Complexity Levels 4 and 5, a peer review is mandatory.
d. Refer to section 5.45.1 Formal Peer Review – Evaluation of Bids for instruction on performing a Formal
Peer Review.
6.25.30 CORCAN
(2010-01-11)
Although arrangements with CORCAN are not governed by the Government Contracts Regulationsand the
Treasury Board Contracts Directive, all existing departmental limits governing the approval of entry into and
signing of contracts apply.
6.25.35 Stop Work Orders and Notices of Termination

(2014-09-25)
Stop work orders and notices of termination must be approved and signed by a contracting officer in accordance
with the Procurement Risk Assessment for Amendments (PRAA). The contract value at the time of the
termination is used in the value question of the PRAA.
6.25.45 Trade-ins
(2012-04-05)
Contracts for which trade-ins have been approved through disposal operations procedures are subject to
approval authorities as detailed in Annex 6.4: Conditions Imposed on the Approval Authority Limits for Public
Works and Government Services Canada Personnel. (All trade-ins are disposal operations and, as such, are
subject to disposal operations procedures.) The trade-in value will not be considered in determining the required
level of authority.
6.25.50 Treasury Board Exceptional Contracting Limits

(2012-04-05)
a. PWGSC may enter into any form of agreement used by a railway company for permission to construct
or maintain a private crossing or a pipe or cable crossing over, across or under the property of the
company at a rate or in an amount no greater than those normally charged for each permission.
b. PWGSC may enter into any agreement with a railway, telegraph, telephone or power company for
permission to attach wire to poles belonging to the company at a rate or in an amount no greater than
those normally charged for each permission.
c. PWGSC may enter into and amend contracts with the United States Government containing that
government's usual terms dealing with indemnity and liability, subject to the limits of the TB Contracts
Directive.
6.25.55 Contracts for Legal Services

(2010-01-11)
Contracts for the performance of legal services may be entered into only by or under the authority of the
Minister of Justice.
6.25.60 Standing Offer

(2014-09-25)
a. The inclusion of a limitation of expenditure in standing offers is optional (see section 4.10.20.1 Standing
Offer Procedures).
b. The approval authority to establish standing offers which do not contain a limitation of expenditure will
be determined by the results of the procurement risk assessment using "standing offer" delegation.
c. When completing the risk assessment, contracting officers must enter the total estimated procurement
value for the entire standing offer period.
d. For those standing offers which contain a limitation of expenditure, the approval authority required to
revise the standing offer method of supply is in accordance with the appropriate contract amendment
delegation of authority for the specific commodity (i.e. goods, services).
e. If advance approval was not sought or given to issue a standing offer, then approval to issue each
resulting standing offer is required. The total estimated value of each resulting standing offer is used to
determine the approval authority.
f. If advance approval for Public Works and Government Services Canada to issue call-ups on behalf of a
client against a standing offer was not requested at the time of obtaining approval to establish the
standing offer, the approval authority for each call-up will be determined by the procurement risk
assessment using the appropriate commodity delegation (e.g. goods, services, construction).
g. For more information on standing offers, see 3.40 Standing offer method of supply and 4.10.20 Request
for Standing Offers. For more information on supply arrangements, see 3.45 Supply arrangement
method of supply and 4.10.25 Request for Supply Arrangements.

(2012-04-05)
Public Works and Government Services (PWGSC) is sometimes asked to process requirements when the
procurement process was initiated by client departments (e.g. sourcing, bidding, evaluation, selection). For
details on how to process these types of requirements, refer to section 2.65 Procurement Process Initiated by
Client..
6.30.1 Ratification by Treasury Board

(2014-09-25)
a. As stated in the Treasury Board (TB) Contracting Policy (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?

id=14494&section=text) , subsection 4.1.11:
"If a contracting authority enters into a contract without Treasury Board approval when such approval
should have been obtained, ratification by the Treasury Board must be sought as soon as possible."
b. The request for TB approval must include information on the circumstances, the type and value of the
contract awarded, and whether it was possible to seek bids.
c. In a case where contract approval is being sought for work already commenced, the contracting officer
must include with the request the concerned client department's certification that it had agreed to the
commencement of work before the receipt of TB approval.
d. Where ratification is required due to an administrative oversight, the corrective measures taken to
minimize administrative oversights must be outlined in the request.
6.30.5 Ratifications within Departmental Authorities

(2014-09-25)
a. For procurements that fall within Complexity Levels 1 through 3 inclusive, the approval authority for
agreements which involve:
i. ratification of contractual commitments;
ii. contracts/amendments which include pre-contractual work clauses; or
iii. any other retroactive elements;
will be the appropriate non-competitive contract approval authority, as determined by the application of
a procurement risk assessment and the non-competitive contract approval authority limits.
b. For procurements that fall within Complexity Levels 4 and 5, the approval of the Assistant Deputy
Minister is required.
6.30.10 Confirming Orders and Contracts Involving Pre-contractual Work

(2014-09-25)
a. Public Works and Government Services Canada (PWGSC) does not normally place contracts to confirm
the actions of departments or agencies. The practice of providing such service to client departments
should be discouraged to the maximum extent practical. However, it may be necessary for PWGSC to
become involved because of its exclusive goods procurement authority. PWGSC may have some value
to add in processing confirming orders when the work is complete, or contracts when the work has
started.
b. Requests for confirming orders and contracts for pre-contractual work are considered non-competitive
and must be evaluated and processed on the basis of the circumstances surrounding each instance.
Where the request is the result of attempts to circumvent normal procurement procedures, return of the
request to the client department should be a prime consideration.
c. Where the work has been completed, Legal Services will prepare a confirming order that will contain
only the information necessary to document the transaction, which includes the parties, the work
performed, the dates, the amount, a release and, if required, a transfer of intellectual property rights. The
appropriate director or higher authority, as determined by the contract value and non-competitive
contract approval authority limits, must approve the confirming orders processed by PWGSC.
d. Where the work has commenced, the contracting officer will prepare a contract. This contract should
only include work that was not subject to a proper contract authorization. Even though the work started
before a required contract authorization, the contract must not be backdated. The date in the Period of
the Contract or Period of Performance clause must be the award date of the written contract. The
contract cannot be backdated or retroactive under any circumstances. To ensure that the work done
before the contract date will be covered by the contract, the pre-contractual work clause C0210C of the
Standard Acquisition Clauses and Conditions Manual, indicating the date the work has started, must be
included in the contract to pay the contractor for any work performed before the award of the written
contract.
e. For procurements that fall within Complexity Levels 1 through 3 inclusive, the appropriate authority, as
determined by the Procurement Risk Assessment and non-competitive contract approval authority
limits, must approve the contracts processed by PWGSC.
f. For procurements that fall within Complexity Levels 4 and 5, the approval of the ADM is required.
g. The client department will remain liable for any complaints resulting from their actions.
Annex 6.1: Procurement Plan Instructions

(2017-09-21)
The Procurement Plan must be prepared as a memorandum from the Director General or Regional Director
General to the Assistant Deputy Minister and must include the elements identified below.
Formal Procurement Plan
DESCRIPTION
Give a brief description of the requirement, including any options, advance approvals and set-aside amounts.
Indicate the period of the proposed contract and options, where applicable.
(Insert relevant information for Assistant Deputy Minister (ADM) if procurement exceeds contract approval
limit of director general/regional director general (DG/RDG) and is a non-competitive procurement (including
non-competitive procurements where an advance contract award notice is used).
The ADM is to be notified of sensitive procurements after they are approved by the DG/RDG by way of a copy
of the signed procurement plan).
BACKGROUND
Provide background information and overall context. Address any audit recommendations, Canadian
International Trade Tribunal (CITT) determinations, Treasury Board decisions, etc. specific to the requirement.
ESTIMATED COST AND NAME OF CLIENT

State the estimated cost, the Goods and Services Tax or Harmonized Sales Tax included, for the requirement.
Include any options, set-aside amounts, etc., and state which client department it is chargeable to.
ANTICIPATED CONTRACT (OR STANDING OFFER OR SUPPLY

ARRANGEMENT) APPROVAL AUTHORITY REQUIRED
Indicate the anticipated contract approval authority. Explain why this would be the approval authority, if not
evident.
SOURCING
Identify applicable trade agreements (North American Free Trade Agreement, Canada-European Union
Comprehensive Economic and Trade Agreement, World Trade Organization Agreement on Government
Procurement, Canadian Free Trade Agreement, Agreement on Internal Trade, etc.), Comprehensive Land
Claims Agreements, and any significant policies governing sourcing decisions (Set-aside Program for
Aboriginal Business, Canadian Content, Shipbuilding, Repair, Refit and Modernization, Policy on Green
Procurement, etc.).
Explain the sourcing strategy, i.e. GETS, other public advertising, source lists (one time, permanent).
Substantiate any decision to use sole source.
For procurement plans for which Treasury Board (TB) submissions will be required, a substantiation as detailed
in paragraph b.ii. of section 6.5.15 Treasury Board Submission must be included.
POLICY ISSUES
Attach relevant Procurement Review Committee document. Identify any other relevant socio-economic or
environmental considerations. For more information on the Industrial and Regional Benefits Program, see 3.70
Procurement Review.
Outline any special or unusual aspects of the procurement, for example, a deviation from policy.
Recommend a course of action to resolve or handle any problems involving potential major risks or deviations
from sourcing policy or other PWGSC policy. Where there are major risks inherent in the proposed approach,
they must be examined in consultation with PWGSC financial authorities and Legal Services.
EVALUATION AND CONTRACTOR SELECTION METHODOLOGY

Identify the evaluation criteria and the selection method to be used with any bid solicitation, including pricing
basis, point rating or mandatory/desirable criteria for the technical evaluation.
ANTICIPATED BASIS OF PAYMENT

Provide an indication of the anticipated basis of payment to be used in the contract, (e.g. firm price, fixed time
rates, ceiling price, limitation of expenditure, etc.)
Use this section to substantiate the use of advance payments, and to indicate when financial security (e.g. surety
bond, irrevocable standby letter of credit) will be required from the supplier/contractor. Address contract audit
provisions.
MILESTONES
Give target dates for important milestones (for example, bid solicitation, contract award, delivery schedule) in
the form of "early" May or "mid" August or "late" October, rather than specific dates.
ADDITIONAL COMMENTS
Include any information that should be brought to the approval authority's attention, e.g. limitation of
contractor's liability, fairness monitor, industrial security requirements, intellectual property, business line
consultations, green procurement.
CONTRACTING OFFICER
State the name, sector/region, division and telephone number of the authority responsible for the project.
COMMENTS
Leave two or three lines for comments by the approval authority.
Recommended by:
______________________
Senior Director or Regional Director OR
Director General/Regional Director General
Sector or Region
______________________
Date
Approved by:
______________________
Director General/Regional Director General OR
______________________
Date
Add the Sole Source Questions and Answers as Annex A
Annex 6.2: Contract Request Instructions

(2017-09-21)
Contract Request
1. General
a. If contract entry was not pre-approved through the Contract Planning and Advance Approval
(CPAA) process, or if a procurement plan was used at the procurement strategy phase, a contract
request for approval to enter into a contract must be prepared prior to contract entry. Approval
must be obtained before accepting any offer from a supplier or requesting a potential contractor to
carry out specific work.
b. Prior to preparing the contract request, contracting officers must review the risks identified in the
procurement risk assessment and the original approval document (prepared at the time the
procurement strategy was approved). If the risks have changed during the procurement process,
the contracting officers must complete a new procurement risk assessment and identify the
additional or new risks, provide an explanation as to why the risks have changed and what
mitigation strategies will be put in place to reduce risk.
c. The contract request must give an accurate description of the terms and conditions requiring
approval, which must reflect and be supported by data contained in the applicable files. Each
contract request must identify and explain any proposed deviations from applicable policies and
procedures.
d. Details of the proposed contract must be recorded clearly and concisely in the contract request.
e. The contract request must be supported by a copy of the proposed contract and the applicable
files.
f. The approval authority will review the contract request and will either grant full approval to
proceed, identify concerns and direct changes to the request or request additional steps before
award.
2. Responsibility of the Contracting Officer
a. For procurements requiring approval of the ADM or above, the contracting officer must see to the
preparation, recommendation and completion of the Contract Request on forms PWGSC-TPSGC
1151-1 and PWGSC-TPSGC 1151-2 in accordance with the following preparation
instructions:
i. certify that the information provided in the Contract Request is an accurate representation
of information on file;
ii. submit the Contract Request to the appropriate approval authority and ensure that:
A. the submission is forwarded and recommended by all line management officers

between the contracting officer and the approval authority;
B. sector or region resources such as legal counsel, contract quality control, cost
analysts, and commodity teams review the submission, as required. See 6.10.10. Cost
and Price Analysis Services;
iii. obtain policy interpretations from the Acquisitions Program Policy Directorate and
opinions from departmental specialists (e.g. Legal Services) on the consequences of any
proposed deviations from general conditions, policies and regulations;
iv. obtain the client department's agreement for any deviations from specifications, standards
and delivery requirements; and
v. highlight, in the recommendation, the facts surrounding any proposed deviations and their
negative consequences to Canada.
3. Preparation of Contract Request
a. Contracting officers must prepare the Contract Request as outlined below.
b. Contract Request form PWGSC-TPSGC 1151-1 is used for contracts requiring approval from
the Assistant Deputy Minister, Deputy Minister or Minister. Information can be presented in
either French or English.
Part 1 Submission Data - Contract Request - form PWGSC-TPSGC 1151-1

a. The key elements of a Contract Request include the following:
i. the requirement and its end use;

ii. the supplier and the selection criteria;
iii. the cost, basis of payment and cash flow.
b. The preparation should focus on these general key elements. The following sections provide additional
considerations for the contracting officer's attention, when applicable.
1. Priority Attention
If priority consideration is requested because of delivery requirements or for any reason, including
expiry of price validity, state the consequences of not meeting the expiry date.
2. Subject
State whether this is a request for authority to enter into contract or authority to utilize a standing offer
method of supply or supply arrangement.
3. Proposal
a. State action proposed (e.g. authority to enter into contract with; to authorize the use of a standing
offer or the use of a Master (Regional) standing offer). Identify the contractor by correct legal
name and give its location (e.g. city, town or village; province; country if other than Canada).
Briefly describe the goods or services being supplied and their end use; part numbers and
specification numbers should be referred to in Part 2 of form PWGSC-TPSGC 1151-2 only.
State the delivery point (e.g. city, town, etc.). If there are numerous delivery points, state 'Delivery
to various destinations' but do not list them in this section. Refer to an appendix.
b. Specify any proposed deviations from Cabinet or TB contracting policies.
c. When certain terms or certain deviations from departmental policies are being recommended in
the Contract Request, creating a financial obligation for Canada, request authority for the
monetary obligation in this section and, in the Remarks section, explain why it is recommended
that Canada be responsible in this case.
d. If any advance payments are being proposed, specify in this section and describe in the Basis of
Payment section.
e. If there is an option to be exercised by Canada by a specific date, and the method of pricing is
known or pricing formula agreed upon and the funds for the option are available in the requisition
(or expected to be provided in the future), request approval to exercise the option in this section.
Provide the method of pricing for the option or pricing formula, and the final date for exercise of
the option in the Basis of Payment section.
f. Indicate in a separate paragraph when approval is being requested for an additional estimated
amount so that provision may be made for unscheduled work such as work arising, design
changes or escalation.
g. In the case of a proposed contract for a specified term or period only, or of a proposed standing
offer, state whether the expiry date is for ordering or delivery.
4. Cost
a. Show the total estimated cost to Canada to complete the proposed contract, Goods and Services
Tax/Harmonized Sales Tax (GST/HST) included. When the price to be paid is in a foreign
currency, the estimated Canadian equivalent, based on the conversion rate currently in effect,
should follow in brackets. Identify the funding source (vote and requisition number) and name the
certifying department or agency. For standing offers which are not funded, state that the amount is
chargeable to the client.
b. The total estimated cost, as mentioned in the first line of the preceding paragraph, refers to the
total amount payable to the contractor, GST/HST included, under the contract, including payment
for all goods or services, plus any options for which funds are available (or expected to be
provided in the future) and any additional estimated amount for foreseeable subsequent
amendments covering unscheduled work, etc., for which approval is being sought.
c. Include a schedule of cash flow, providing a distribution by fiscal year of the funds expected to be
disbursed during the course of the contract.
5. Basis of Payment
a. Summarize all factors which have a bearing on the proposed purchase, such as (details of major
elements of cost should be provided in an appendix):
i. price to be paid;
ii. method of pricing;
A. firm lot price;
B. firm unit price;
C. target price, ceiling price and incentive fee formula;
D. target price and incentive fee formula without ceiling price;
E. fixed time rate; or
F. price-to-be-negotiated (PTBN) - include a formula for determination of firm basis of

payment, or provide an explanation as to why inclusion of a formula is not possible,
and why PTBN is not a ceiling price, if this is the case.
iii. audit or verification provisions;
iv. customs duty;
v. Goods and Services Tax:
A. included,
B. extra,
C. exempt or zero-rated (indicate reason for exemption), or
D. not applicable;
vi. other taxes;
vii. delivery terms, for example:
A. FOB (free on board) destination,
B. FAS (free alongside ship),
C. FAF (free alongside flight),
D. FOB common carrier, contractor's plant,

E. CIF (cost, insurance and freight);
viii. exchange rate fluctuation provisions, if applicable. Identify the amount of foreign currency
which is subject to the fluctuation and any special conditions;
ix. any escalation provisions except those provided for in the general conditions forming part
of the contract (e.g. sales tax, excise tax, customs duties);
x. option – method of pricing or pricing formula plus final date for exercise of option.
b. Describe any advance payment requirements.
c. Provide the proposed basis of payment for any unscheduled work (introduced in the "Proposal"
section and included in the "Cost" section as an estimated amount).
d. If a large number of items and/or destinations are involved, insert the following statement under
Basis of Payment:
"Unit (and/or Lot) prices totalling $ ________, sales tax ________, FOB ________, as detailed in
the attached annex or in an annex attached to the proposed contract."
6. Remarks
Ensure that source and price are adequately justified, by using the following criteria:
a. Indicate how many suppliers were requested to bid and the method of soliciting bids. If a
competitive process was followed, state the number of bids received and the relative standing of
the recommended bidder with regard to price, e.g., the lowest being recommended. When a non-
competitive (sole source) procurement strategy is chosen, the legal authority to use an exception
to a competitive bidding process must be stated. (See 3.10 Competitive Contracting Process and
3.15 Non-competitive Contracting Process.)
b. If other than the lowest-responsive bid is recommended, explain clearly why any lower bid is not
acceptable.
c. If a bid is considered non-responsive because it does not meet the mandatory requirements of the
solicitation, but is lower in price than the lowest-responsive bid, concisely describe the major
deficiencies.
d. If two bids have an identical price and one of the two is recommended for acceptance, detail the
governing selection criteria.
e. If selection is not made by competitive bid, provide sufficient support for the choice made. In the
absence of competition, quote the price certification obtained and explain why the price is
considered to be reasonable and justifiable. Include a brief summary of Part 2, Section F2,
Previous Price, of form PWGSC-TPSGC 1151-2 .
f. If deviations from Cabinet or TB contracting policies are recommended, quote opinions given by
the functional branches, specifying any financial or other consequences, and give reasons for such
recommendations. Whenever possible, express Canada's proposed obligations in monetary terms.
g. If deviations from the provisions of the North American Free Trade Agreement, Canada-European
Union Comprehensive Economic and Trade Agreement, the World Trade Organization
Agreement on Government Procurement, the Canadian Free Trade Agreement, or the Agreement
on Internal Trade are recommended, provide reasons for the deviation.
h. If approval is being requested for any estimated amount for unscheduled work arising, design
changes or escalation, as introduced in the "Proposal" section, estimated in the "Cost" section and
substantiated in the "Basis of Payment" section, provide support in this section.
i. Describe any options in this section and include the criteria that will be used for determining
whether the option should be exercised.
j. If the proposed contract is of a value in excess of $2 million for goods and services or of any
value with a socio-economic impact judged to be significant, include a section dealing with the
socio-economic considerations, including any funding implications. Attach the recommendations
of the dedicated management committee or of the Procurement Review Committee.
k. If advance payments are recommended, explain why and state the benefits to Canada.
l. Include a statement on the amount of Canadian content and the creation/maintenance of jobs in
Canada and their location.
m. Provide details surrounding the medium, medium-high and high risks with proposed mitigation
strategies.
n. Describe briefly the profit calculations.
o. State the dates for commencement and completion of deliveries included in the bid being
recommended for acceptance. Do not include all of the delivery details.
p. Whenever possible, give the TB number which grants the client program approval.
7. Expiry Date
State the expiry date of the bid.
NOTE:If genuine urgency exists, the reason should be stated in Part 1, "Priority Attention" section.
Part 2 Supporting Data - Contract Request - form PWGSC-TPSGC 1151-2

In particular, note the information in sections A to F below.
When a non-competitive (sole source) procurement strategy is chosen based on exception 6.(d) of the
Government Contracts Regulations, the responses to the questions found in Annex 3.1: Treasury Board
Questions for Sole Source must be attached to this Part 2.
SECTION A - DETAILS OF CONTRACT DEMAND OR REQUISITION

a. If all of the goods or services requisitioned by the client are not in the proposed contract for which
approval is being sought and Part 1 of form PWGSC-TPSGC 1151-1 did not make this clear, briefly
summarize, for the understanding of the approval authority, the total number of items on the requisition
and the number included in the proposed contract. If there is not enough space because of the size of the
summary explanation, refer to the appendix or document on file which provides the details.
b. If the goods and/or services requisitioned are the same as those being recommended for acceptance from
the proposed supplier, describe them in this section or refer to the work specifications.
SECTION B - SPECIAL TERMS NOT INCLUDED IN PART 1

a. Detail any special terms which will have an effect on the proposed contract which are not included in
Part 1 of form PWGSC-TPSGC 1151-1 , such as financial security, royalty payments, etc. Address
conformance with the following policies (some sectors/regions may prefer to address these policies in
Section F, either location is acceptable):
i. International Sanctions,
ii. Federal Contractors Program for Employment Equity, and
iii. Conflict of Interest.
b. It is not necessary to refer to normal escalation provisions contained in the general conditions.
SECTION C – DELIVERY
State the delivery requirements specified by the client and promised by the supplier and the acceptability of
delivery if not in accordance with the delivery specified.
SECTION D - TYPE OF CONTRACT DOCUMENT

State the type of contract document, e.g. "Your Tender is Accepted"; "You are Requested"; "Standing Offer";
"Your Proposal is Accepted"; "Formal Agreement".
SECTION E - BIDS RECEIVED

State if there was a public opening of bids.
SECTION F - BASIS OF RECOMMENDATION
F1 - Price support for negotiated cases
In the absence of competition, detail the price support which has been obtained, if this was not provided in Part
1 of form PWGSC-TPSGC 1151-1 . State reasons why the various price elements are considered to be
reasonable and justifiable. Substantiate the profit or mark-up factor being recommended.
F2 - Previous Price
Provide details of previous prices for negotiated contracts when available, including the percentage of increase
or decrease, and an explanation for any substantial increases. Provide this information also for competitive
contracts unless the number of low dollar value items makes the comparison too complex to serve a useful
purpose.
F3 - Discrepancies, if any, between bid solicitation and bid recommended

Provide details and reconcile amounts, when discrepancies occur between bid solicitation and bid
recommended.
F4 - Support for deviations from departmental policy, changes or deletions in general conditions
and supplemental general conditions
Support deviations from departmental policy in this section.
F5 - Acceptability of goods and/or services if not in accord with specifications

Support acceptability of supplies if not to specifications.
F6 - Method of Payment
a. Detail the method of payment. If progress payments are being proposed, fully describe them, including
any holdbacks.
Note:If there are numerous items, and items and unit prices are not detailed in Part 1 of form PWGSC-
TPSGC 1151-1 , or in an appendix to Part 1, make reference in Section F to the specific document on
the file which details the information.
b. Other data, if applicable, should be stated under Section F, such as:
i. Add list of suppliers who were invited to bid and their ownership.
ii. Attach financial officer's opinion on supplier's financial status.
iii. Attach legal counsel's opinions on the legal nature of the case and on the contract submission,
including its consistency with the contract.
iv. If not previously mentioned in Section B, address the contractor's compliance with:
A. international sanctions;
B. Federal Contractors Program for Employment Equity; and
C. conflict of interest provisions.
Annex 6.3: Preparation of Contract Amendment Approval Documents

(2014-09-25)
1. Amendments requiring the approval of Directors General/Regional Directors

General and below:
a. The Contract Amendment Request (CAR), available in the Automated Buyers Environment (ABE),
may be used.
b. If a Procurement Risk Assessment for Amendments (PRAA) is required for the proposed amendment, it
must be attached and the results discussed in the CAR.
c. Contracting officers should include the following information, as applicable:
i. Description/Proposal: Briefly describe the goods or services as provided in the original CPAA and
state the purpose of the proposed amendment.
ii. Amendment Increase/Decrease: Show total cost of the proposed amendment in Canadian dollars
or foreign currency, as applicable. If using foreign currency, give the equivalent in Canadian
currency for the amendment only.
iii. Provide the name of the client involved.
iv. Approval Summary: Provide a table addressing the approval documents, the document value, the
approval value of each approval documents, and the approval level.
v. Proposed Basis of Payment: If any alteration in the basis of payment is proposed, provide
justification and support. For more information on modifications to the basis of payment, refer to
subsection 3 of Annex 6.4.8: Amendment Approval Instructions for all Complexities.
vi. Risk: Provide a description of the risk response measures for those risks identified as medium-
high and high, as applicable.
vii. Remarks: Provide the following information, as a minimum:
A. Give additional important information required for a proper assessment of the proposed
amendment. For example, if the proposed amendment is for a substantial increase, state
why this additional requirement did not form part of the original requirement.
B. Provide a justification for the amendment.
2. Amendments Requiring Approval at the ADM level and above:

a. Form PWGSC-TPSGC 1151-1 Contract Request/Contract Amendment Request (Part 1 - Submission
Data)and Form PWGSC-TPSGC 1151-4 Contract Amendment Request (Part 2 - Supporting Data),
must be used and presented in either French or English.
b. Authority to Amend Contract or Authority to Revise a Standing Offer Method of Supply: Form
PWGSC-TPSGC 1151-1, can be used to obtain approval to utilize a standing offer that has been revised
by the bidder.
PART 1 - SUBMISSION DATA CONTRACT AMENDMENT REQUEST - FORM

PWGSC-TPSGC 1151-1
The key elements that should be included in a Contract Amendment Request are:
a. the purpose of the amendment; and

b. the amendment cost.
The following sections provide additional considerations for the contracting officer's attention, when applicable.
a. Proposal
i. State the purpose of the proposed amendment and briefly describe the goods and/or services, as
provided in the original contract request (for example, to amend the contract with ABC for the
supply of 20 additional widgets). Include, in the case of goods or services being added, the prices,
sales tax position, delivery points, etc.
ii. Identify any differences between funds previously authorized and contract commitments.
iii. If a large number of items are involved, state:

"Unit (and/or Lot) prices totalling $ ____________, sales tax ____________,
FOB_____________, as detailed in the attached appendix or in an appendix attached to the
proposed amendment."
iv. If the proposed amendment involves any deviations from Cabinet or TB contracting policies, not
included in the original approval, describe the deviations fully.
b. Additional Costs (or Reduction in Cost)
i. Show total cost of the proposed amendment in Canadian dollars or foreign currency, as
applicable. If using foreign currency, give the equivalent in Canadian currency.
ii. Show the proposed amended estimated cost of the contract. If the previously authorized total
contains an amount for specific future work or foreseen yet unscheduled work (such as design
changes or work arising), always include this amount in the total estimated cost. If not, authority
for the amount set aside is lost.
iii. Provide the cash flow and other information, as explained under the "Cost" section of the contract
request in Annex 6.2: Contract Request Instructions.
iv. Provide a brief description of previous amendments and their cost.
c. Remarks
i. Give additional important information required for a proper assessment of the proposed
amendment. For example, if the proposed amendment is for a substantial increase, state why this
additional requirement did not form part of the original requirement. Refer to the Remarks section
of the contract request in Annex 6.2: Contract Request Instructions for a guide to the information,
which should be provided, if applicable.
ii. When a Contract Amendment Request requires a higher approval level than originally authorized
in the contract, detail the basis for the selection of the contractor and the Basis of Payment. It is
not necessary to repeat in Part 1, the present Basis of Payment if it was previously approved at a
higher level or by the contracting authority being approached now for approval of this
amendment.
iii. If any alteration in the basis of payment is proposed, provide justification and support. Refer to
subsection 3 of Annex 6.4.2: Contracting Limits including Exceptional Authorities.
iv. If a difference exists between funds authorized and contractual commitments, explain why.
v. Provide details surrounding the medium-high and high risks relating to the proposed amendment
with proposed mitigation strategies.
vi. If items are being added, or when establishing a firm Basis of Payment for a contract, previously
issued on a price-to-be-negotiated basis, provide price support.
d. Authority
Show the original authority for entry into the contract and the authority for each approved amendment.
When Treasury Board (TB) authority has been obtained, give the TB number and date and when the
Minister's approval has been obtained and state "ministerial authority." In all other cases, state
"departmental authority." Do not show amounts in Part 1.
PART 2 - SUPPORTING DATA CONTRACT AMENDMENT REQUEST - FORM

PWGSC-TPSGC 1151-4
In completing this form, pay particular attention to providing all supporting information. In particular, note the
following:
Section A - Physical Progress to Date

In this section, summarize the progress of the contract, such as quantities already delivered and the percentage
completed; work in progress or completed; advance or progress payments made or any other preliminary
expenses; and other matters of a similar nature.
Section B - Authorities for and Status of Contract, plus Amount of Proposed Amendment
Give specific authorities and authorized amounts under the "Authority and Amount" column for the contract
and each amendment (that is, TB, Minister, Deputy Minister, Director General, Director, etc.). Any differences
between authorities (approvals) and commitments should be reconciled in Section B. Also, if the amount of the
proposed amendment exceeds the funds available, it should be noted in this section.
Section C - Basis and Method of Payment as Last Amended

Describe briefly the Basis of Payment and Method of Payment as Last Amended, including sales tax position,
delivery terms [for example, FOB], advance and progress payments) unless it is proposed to amend the Basis of
Payment or Method of Payment. In this case, give a detailed description of the present Basis of Payment and
Method of Payment for any portion of the work for which a new Basis of Payment or Method of Payment is
being recommended. Refer to Annex 6.4.2: Contracting Limits including Exceptional Authorities.
Section D - Basis of Recommendation

a. Support price and changes in terms or method of payment.
b. Detail all price support for any items being added or when establishing a firm Basis of Payment for a
contract, previously issued on a price-to-be-negotiated basis.
c. Explain any discrepancies between: (a) the amount approved for the contract and amendments (if any),
and (b) the total committed.
Note: If numerous items and unit prices have not been detailed in Part 1 of form PWGSC-TPSGC 1151-1 , or
in an annex to Part 1, make reference in Section D to the specific document of the file that details the
information.
3. Preparation of Treasury Board Amendment Submission

Treasury Board approval is required for any contract amendment exceeding the limits outlined in Annex 6.4.2:
Contracting Limits including Exceptional Authorities and subject to the exceptions detailed in Annex 6.4.1:
Approval Authorities and Additional Signing Authorities in Support of Clients' Programs Only - Other than for
Canadian Commercial Corporation.
Annex 6.4: Conditions Imposed on the Approval Authority Limits for Public Works and
Government Services Canada Personnel
(2014-09-25)
The approval authority limits for Public Works and Government Services Canada (PWGSC) personnel are
subject to the following conditions:
a. that contracting authorities ensure that, for requirements and associated amendments requiring their
approval, the conditions of the contract are consistent with the representations made to them as to the
substantive nature of the transaction;
b. that Legal Services be consulted when the contracting officer is considering a deviation from Standard
Acquisition Clauses and Conditions Manual clauses, departmental standard procurement templates, or
commodity or sector-based legally approved templates. Contracting officers may seek advice from
Legal Services on sensitive requirements. For other situations requiring consultation with Legal
Services, see section 3.110 Legal Services.
Note: The Minister's approval authority is required for specific submissions described in Annex 6.4.1: Approval
Authorities and Additional Signing Authorities in Support of Clients' Programs Only - Other than for Canadian
Commercial Corporation.
Annex 6.4.1: Approval Authorities and Additional Signing Authorities in Support of

Clients' Programs Only - Other than for Canadian Commercial Corporation
(2016-04-04)
This annex describes the internal approval and signing authorities and exceptions to the internal approval
authorities. It also addresses additional signing authorities such as for progress payments, certifications, etc.
1. Approval Authorities
a. Internal approval and signing authorities are in accordance with Annex 6.4.2: Contracting Limits
including Exceptional Authorities.
b. Treasury Board (TB) approval is required for submissions exceeding the authority found in Annex 6.4.2.
c. Exceptions to Annex 6.4.2 are described in 1.1 below.
1.1 EXCEPTIONS TO INTERNAL APPROVAL AUTHORITIES
1.1.1 Former Public Servants

a. Contracting limits in Annex 6.4.2 apply to submissions granting approval to enter into a contract
including amendments for the services of former public servants in receipt of a pension when the
contract value, including amendments, does not exceed $100,000 (competitive) or $25,000 (non-
competitive).
b. TB approval is required for submissions granting approval to enter into a contract including
amendments for the services of former public servants in receipt of a pension when the contract value,
including amendments, exceeds $100,000 (competitive) or $25,000 (non-competitive).
c. The fee component in any non-competitive contract must be abated if the individual has been retired for
less than one year and is in receipt of a pension. See section 3.90 Contracting with former public
servants, subsection e.
d. TB approval is required for submissions granting approval to enter into or amend a contract with former
public servants in receipt of a lump sum payment pursuant to the terms of a work force reduction
program where the fee component will exceed $5,000 of either the individual contract or a combination
of contracts, during the period covered by the lump sum payment. See section 3.90, subsection e.
Note: For more information on the definition of former public servants and pension, see section 3.90, subsection
b.
1.1.2 Confirming Orders

Submissions granting approval to issue a confirming order must be approved at the Director level or higher in
accordance with the non-competitive contract approval authority limits in Annex 6.4.2: Contracting Limits
including Exceptional Authorities. The limitation to non-competitive contract approval authority limits apply to
all positions below Assistant Deputy Minister. (See 6.30.10 Confirming Orders and Contracts Involving Pre-
contractual Work.)
1.1.3 Royalty Payments

a. For contracts subject to the Defence Production Act (DPA), when royalty payments exceed five percent,
Deputy Minister approval is required before entering into a contract. (Approval of the Deputy Minister
is not sought to enter into contract, but to permit Canada to pay the royalty.)
b. If there is an increase in the amount of the royalty to be paid or if further items become subject to
royalty payments during the life of a contract, the same guidelines for approval apply.
c. To obtain the approval of the Deputy Minister for royalties exceeding five percent, the following
information is to be provided on Part 1 of the contract request:
i. details of the royalties;

ii. a forecast of anticipated future purchases beyond the requirement in the present submission;
iii. the comments of Legal Services.
1.1.4 National Security Exception

a. The Assistant Deputy Minister, Acquisitions Branch (ADM/AB) must have approved the National
Security Exception (NSE) pursuant to a letter from the client ADM requesting the NSE before the
document approval process takes place.
b. Following NSE approval by the ADM/AB, the normal document approval process and authority apply.
c. For complete details of the NSE process, see 3.105 National Security Exceptions.
1.1.5 Integrity Provisions

a. Public Interest Exception (PIE): A PIE must be invoked prior to entering into a contract, supply
arrangement or standing offer with a bidder, offeror or supplier, or assigning a contract to proposed
assignee who has been determined to be ineligible or suspended under the Ineligibility and Suspension
Policy (http://www.tpsgc-pwgsc.gc.ca/ci-if/politique-policy-eng.html) . A request for a PIE must be escalated to the
Assistant Deputy Minister (ADM) of Acquisitions Branch (AB) through the Acquisitions Program
Integrity Secretariat (APIS), by e-mail at TPSGC.DGAIntegrite-ABIntegrity.PWGSC@tpsgc-
pwgsc.gc.ca.
b. Integrity verification: When a response of “Caution Due Diligence Should be Applied” is received,
approval must be sought at the level indicated on the response (i.e. ADM or Director General (DG)
level).
i. All requests for ADM approval must be sent to APIS for processing, by e-mail at
ii. All requests for DG approval must be sent through the established processes within the sector or
region. Contracting officers may seek assistance from APIS by e-mail at TPSGC.DGAIntegrite-
ABIntegrity.PWGSC@tpsgc-pwgsc.gc.ca if required.
iii. Heightened integrity approval is not required when issuing:
A. an amendment where the Integrity Provisions were not modified;
B. a call-up;
C. a contract subsequent to a supply arrangement; or
D. a task authorization.
Contracting officers may proceed with obtaining approval at the level determined for the contract
through the Procurement Risk Assessment.
c. If a contractor wishes to enter into a first tier subcontract with an ineligible or suspended subcontractor,
contracting officers are to escalate this request to the ADM/AB through APIS, by email at
2. Additional Signing Authorities
Signing authorities for purchase orders, contracts, standing offers, supply arrangements, formal agreements and
arrangements, stores and supply transfer orders, written direction to the Agency of Record, assignments, go-
ahead letters and messages, letters of intent, consents to subcontract, termination for convenience notices, and
amendments to any of the above, are as follows:
a. in accordance with Annex 6.4.2: Contracting Limits including Exceptional Authorities;
b. and if under departmental seal, together with the Corporate Secretary.
2.1 ADVANCE, MILESTONE AND PROGRESS PAYMENTS

The authority for certification of advance, milestone and progress payment claims (form PWGSC-TPSGC 1111
, Claim for Progress Payment), as a prerequisite for client certification pursuant to section 34 of the Financial
Administration Actis as follows:
a. For incumbents of positions listed in Annex 6.4.2, with the exception of Intern Officers/Trainees, Senior
Purchasing Assistants and Procurement Assistants, unlimited certification authority applies;
b. For Senior Purchasing Assistants:
i. for contracts beyond their approval authority: certification authority for claims up to $40,000,
with the exception of a final claim or of a release of a holdback;
ii. for contracts within approval authority: certification for all claims.
2.2 SETTLEMENT AND RELEASE DOCUMENTS

a. The authority to sign release and settlement documents (form PWGSC-TPSGC 9223-2 , Settlement
and Release) for terminations on behalf of the Minister is delegated as follows:
i. Arising from termination for convenience:
A. Director General, Policy, Risk, Integrity and Strategic Management Sector, Acquisitions
Branch (PRISM/AB)
B. Director, Acquisition Program Integrity Secretariat, PRISM/AB
C. Chairman, Contracts Settlement Board
ii. Other than for termination of convenience, authority is one of the following in the order listed:
A. Chief Risk Officer

B. Chairman, Contracts Settlement Board.
b. For assistance, contracting officers may consult the Specialized Support Services for Procurement
Division, at 819-934-1382.
2.3 INDUSTRIAL SECURITY
The Director, Canadian Industrial Security Directorate, has the authority to provide instructions to contractors
concerning industrial security requirements.
2.4 CERTIFICATES UNDER DEPARTMENTAL SEAL

The Assistant Deputy Minister, Corporate Services, Policy and Communications Branch, has the authority for
certifying that documents under departmental seal are true copies.
Annex 6.4.2: Contracting Limits including Exceptional Authorities

(2014-09-25)
Instructions
a. The Delegation of Authorities Tables for Complexity Levels 1 through 3 inclusive for the Acquisitions
Program can be found on the Contracting Limits and Related Notes
(http://www.gcpedia.gc.ca/wiki/Contracting_limits_and_related_notes) page on GCpedia.
b. The limits shown in the Delegation of Authorities Tables are maximums as defined by the application of
both a Complexity Assessment and a Procurement Risk Assessment. The authority required for contract
entry or amendments will be determined on a case-by-case basis through the application of a
procurement risk assessment appropriate for the level of complexity. This assessment will identify the
specific risks of a procurement or proposed amendment, and the appropriate level of approval required
for contract entry or issuing a contract amendment.
c. For Complexity Levels 4 and 5 inclusive, with the exception of administrative amendments, the
approval authority for contract entry and non-administrative amendments is set at Assistant Deputy
Minister, Acquisitions Branch, regardless of the competitiveness of the requirement.
d. The relevant limits for individual officers, which may be lower than the maximums identified in the
Delegation of Authority Tables, are contingent upon Acquisitions Branch policies and procedures.
Contracting officers must ensure that any authorities they exercise are in accordance with their approved
delegation form.
e. For the purposes of contract approval authorities, an Advance Contract Award Notice (ACAN) is
classified under the "electronic bidding" category. The electronic bidding approval levels apply
whenever an ACAN has been posted and no valid Statement of Capabilities was submitted.
f. Refer to Annex 6.4.5 Table of Equivalent Positions for position titles under each level.
g. Any incumbent, under any level, who holds a valid delegation of approval authority for contract entry
may sign a contractual document for the same commodities for which the incumbent has delegation of
authority, regardless of dollar value. For example, if the incumbent holds a valid delegation of approval
authority for contract entry for goods and military repair and overhaul, then the incumbent has signing
authority for goods and military repair and overhaul.
h. By default, the delegation limits of individual officers are a percentage of the departmental authority:
i. Level 1 and 2 positions have 100% of the departmental authority;
ii. Level 3 positions have 50% of the departmental authority; and
iii. Level 4 positions have 5% of the departmental authority.
i. For information on contract entry approval authorities for contracts requiring ratification, refer to
section 6.30.5 Ratifications within Department Authorities.
j. If the total cost of the procurement for approval purposes exceeds the limits set out in PWGSC’s
Delegation of Authority Instrument, Treasury Board approval is required.
k. The Delegation of Authority Tables outline PWGSC’s Departmental Contracting Limits in accordance
with Appendix C – Treasury Board Contracts Directive (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?
section=text&id=14494#appC) .
l. Unless otherwise stated within the "Notes" accompanying the Delegation of Authorities Tables, the
exceptional authorities include both contract entry and amendment authority. Once the departmental
authority limit for the exceptional authority has been reached, any subsequent approvals require a
Treasury Board submission.
m. Standing Offers and Supply Arrangements
i. Approval and amendment authorities are set in the Exceptional Contracting Limits detailed on the
Contracting Limits and Related Notes
(http://www.gcpedia.gc.ca/wiki/Contracting_limits_and_related_notes) page on GCpedia.
ii. The Contract Planning and Advance Approval (CPAA) issued to seek advance approval to use the
standing offer method of supply, or establish a supply arrangement (or the formal procurement
plan to seek procurement strategy approval), must be approved based on the total estimated value
(i.e. the entire project/program), Goods and Services Tax/Harmonized Sales Tax (GST/HST)
included, of the requirement that is proposed to be satisfied by this method of supply.
iii. Therefore, if it is intended to issue more than one standing offer against a Request for a Standing
Offer, the sum of the total estimated value (GST/HST included) of all resulting standing offers
must be used to obtain CPAA or formal procurement plan approval.
Risk-Based Procurement Delegation
COMPLEXITY LEVEL
Level 1 Level 2 Level 3 Level 4 Level 5
Risk High Manager Director Director General Assistant Assistant

Level Deputy Deputy
Minister Minister
Supply Team Leader Manager Senior Assistant Assistant
Medium-
Director/Regional Deputy Deputy
High
Director/Director Minister Minister
Supply Specialist Supply Manager Assistant Assistant
Medium Team Deputy Deputy
Leader Minister Minister
Supply Officer Supply Supply Team Assistant Assistant
Medium-
Specialist Leader Deputy Deputy
Low
Minister Minister
Intern Officer/Sr Supply Supply Specialist Assistant Assistant
Purchasing Officer Deputy Deputy
Low
Assistant/Procurement Minister Minister
Assistant
Annex 6.4.2.1: Contracting Limits for Basic and Standard Procurements

(2014-09-25)
Authorities, the content of this section was reviewed and incorporated to Annex 6.4.2: Contracting Limits
The obsolete content of Annex 6.4.2.1 has been deleted but can be viewed for reference only in the Supply
Manual Archive (http://www.gcpedia.gc.ca/wiki/Supply_Manual_Archive) , Version 2014-3.
Annex 6.4.2.5: Contracting Limits for Complex Procurements

(2014-09-25)
The obsolete content of Annex 6.4.2.5 has been deleted but can be viewed for reference only in the Supply
Manual Archive (http://www.gcpedia.gc.ca/wiki/Supply_Manual_Archive) , Version 2014-3.
Annex 6.4.3: Exceptional Contracting Limits for Complex Procurements

(2014-09-25)
The obsolete content of Annex 6.4.3 has been deleted but can be viewed for reference only in the Supply Manual
Archive (http://www.gcpedia.gc.ca/wiki/Supply_Manual_Archive) , Version 2014-3.
Annex 6.4.4: Notes to Exceptional Contracting Limits for Complex Procurements

(2014-09-25)
Authorities, the notes to contracting limits were reviewed and moved to the Contracting Limits and Related
Notes (http://www.gcpedia.gc.ca/wiki/Contracting_limits_and_related_notes) page on GCpedia.
The obsolete content of Annex 6.4.4 has been deleted but can be viewed for reference only in the Supply Manual
Archive (http://www.gcpedia.gc.ca/wiki/Supply_Manual_Archive) , Version 2014-3.
Annex 6.4.5: Table of Equivalent Positions

(2012-04-05)
Purpose
Unless otherwise specified, all positions in this table are in the Acquisitions Branch, located in either
headquarters or at client locations, or in regional operations with responsibility for common service acquisition
functions.
Remarks:
1. Unless restricted by legislation, regulation, or policy, the Deputy Minister and the Associate Deputy
Minister have the same authorities as the Minister.
2. For any position titles not listed in this Table of Equivalent Positions, the equivalent positions as
recognized by the Chief Financial Officer will apply.
Table of Equivalent Positions

Assistant Deputy Minister, Acquisitions
Associate Assistant Deputy Minister, Acquisitions
Director General, Acquisitions
Regional Director General
Level 1
Senior Director, Acquisitions
Senior Director, Crown Assets Distribution
Senior Director, Seized Property Management Directorate
Regional Director, Acquisitions
Director, Acquisitions
Manager
Level 2 Project Manager
Procurement Manager
Manager (Koblenz)
Level 3 Supply Team Leader

Chief
Supervisor
Senior Procurement Officer
Senior Contract Management Officer
Senior Contracts Officer (Washington)
Supply Specialist
Team Leader
Senior Case Officer
Project Officer
Procurement Officer
Contract Management Officer
Marine Technical Inspector (when performing purchasing functions)
Senior Contracts Officer
Supply Officer
Export Transportation Officer
Purchasing Officer
Contracts Officer
Case Officer
Intern Officer/Trainee
Level 4
Senior Purchasing Assistant
Procurement Assistant
Purchasing Assistant
Sales Representative (Crown Assets Distribution)
Project Clerk
Contract Clerk
Annex 6.4.6: Contract Amendment Approval Instructions for Complexity Levels 1, 2 and
3
(2014-09-25)
1. With the exception of administrative amendments and pre-approved amendments, the approval authority
level for a proposed amendment to a contract within Complexity Levels 1 through 3 inclusive is
determined by completing a Risk Assessment for Amendments (RAA).
2. When answering the "Value" question within the RAA, consideration must be given not only to the
value of the proposed amendment but also to the cumulative value (or aggregate) of all amendments,
both positive and negative (previous and proposed). Therefore, the dollar value to be used in that
question must be the aggregate amendment value (previous and proposed) excluding pre-approved
amendments.
3. Exceptional Authorities: Unless otherwise stated within the notes to contracting limits including
exceptional authorities found on the Contracting Limits and Related Notes
(http://www.gcpedia.gc.ca/wiki/Contracting_limits_and_related_notes) page on GCpedia, the exceptional authorities
include both contract entry and amendment authority. When answering the "Value" question within the
RAA, consideration must be given not only to the value of the proposed amendment but also to the
cumulative value (or aggregate) of all amendments, both positive and negative (previous and proposed)
and the original contract value. Therefore, the dollar value to be used in that question must be a
combination of the original contract value and the aggregate amendment value (previous and proposed).
4. Examples showing when a RAA is required for a Complexity Level 1 through 3 contract awarded on an
electronically competed basis can be found on the Determining the Amendment Approval Authority
(http://www.gcpedia.gc.ca/wiki/Determining_the_Amendment_Approval_Authority) page on GCpedia.
Annex 6.4.7: Complex Contract Amendment Approval Instructions

(2014-09-25)
Authorities, the content of this annex was reviewed and incorporated in Annex 6.4.6: Contract Amendment
Approval Instructions for Complexity Levels 1, 2 and 3.
For reference purposes, Annex 6.4.7 is available in the Supply Manual Archive
Annex 6.4.8: Amendment Approval Instructions for all Complexities

(2014-11-27)
1. Reductions in Contract Value
a. Situation: The client reduces the quantity required and the supplier/contractor agrees to the
reduced quantity with no increase in the unit price.
Approval Level: The contracting authority, designated as such in the contract, may approve the
amendment that reduces the value of the contract (when the amendment is administrative in
nature).
b. Situation: The client reduces the quantity required but the supplier/contractor wants to increase
the price because of the reduced quantity. Renegotiation is necessary.
Approval Level: The approval level for the contract amendment is that required for the revised
unit price multiplied by the new quantity. Aggregate amendment approval authorities apply.
c. Situation: The client wishes to disencumber funds allocated to a repair and overhaul contract in
the last quarter of the fiscal year, because no more work arising will be forthcoming during that
period.
Approval Level: The contracting authority, designated as such in the contract, may approve an
amendment to reduce the value of the contract (considered an administrative amendment).
d. Situation: The client requires a work package to be removed from a research and development
contract. There is no clear relationship between the reduced cost and the reduced work package.
Approval Level: The amendment will be approved at a level equal to the value of the proposed
cost reduction. Aggregate amendment approval authorities apply. Nil value amendment is not
appropriate as there is no link between the value of the work package and the reduction.
2. Substitute Item (or work package)

If a client requests the contracting authority to amend a contract by deleting an item (or work package)
and substituting a different item (or work package), the value of the substitute item (or work package)
will determine the contract amendment approval level. A Risk Assessment for Amendments must be
performed to determine the appropriate approval authority required to add the substitute item (or work
package).
3. Additional Risks
Contract amendments that propose changes to either the basis of payment, the method of payment or the
contract conditions, so that additional risk or liability is transferred to Canada, must be authorized in
accordance with the Procurement Risk Assessment for Amendments for that contract only if
corresponding compensatory benefits accrue to Canada. In the absence of corresponding benefits, such
changes would constitute extra payments for which only TB has approval authority.
The following are examples of changes that would constitute additional risk to Canada:
a. liberalizing the progress payments;
b. eliminating the requirement for a performance bond;
c. slippage, by the contractor, of firm delivery dates.
4. Advance Approval for Amount Set Aside
a. If the original authority to enter into a contract also included advance approval for an amount to
be set aside for unscheduled work, design changes or work arising, then any amount set aside
used must be approved by the appropriate non-competitive contract entry approval authority, not
to exceed the Director level. The Risk Assessment for Amendments will determine the
appropriate approval authority. When completing the "Value" question of the RAA, contracting
officers are to select "set aside amount".
b. If an amendment to use the remainder of the amount set aside for a specific purpose exceeds the
amount set aside, the approval authority for the excess amount will revert back to the appropriate
aggregate amendment approval authority in accordance with Annex 6.4.2: Contracting Limits
including Exceptional Authorities. Aggregate amendment values of set asides, previously
approved, are separate from the aggregate amendment values of either options or normal
amendments. If required, set-asides can be exercised to the maximum value in one amendment.
c. If a condition of the original approval requires other levels of approval for encumbering amounts
set aside, the levels established in the original contract approval will take precedence.
d. The amount of the set aside should be based on sound front-end planning and preparation. The
better the planning and preparation the better the ability to predict additional quantities or
unforeseen work arising, and the more accurate the assigned dollars values. A procurement plan
that is thoroughly justified as to the purpose of each planned expenditure, is more likely to be
approved.
e. Some examples of the vehicles used to utilize the amount of the set-aside are Contract
amendment, work authorization form, form DND 626 Requisition on a Contract, or a Pre-
Approved Amount for Anticipated Amendments (PAAA).
5. Advance Approval for Options
a. Once approval has been obtained to exercise an option, the contract amendment to exercise the
option requires only the signature of an incumbent, under any level, who holds a valid delegation
of approval authority for contract entry for the same categories for which the incumbent has
delegation of authority. For example, if an incumbent holds delegation of authority for contract
entry for goods and military repair and overhaul, then that incumbent would have signing
authority for goods and military repair and overhaul. Aggregate values of options, previously
approved, are separate from the aggregate amendment values of either set-asides or normal
amendments. If required, options can be exercised to the maximum value in one amendment.
b. Funds and approval received for an option can only be used for the specific purpose stated in the
approval document. For example, if approval was obtained for a 1 year services contract valued at
$200,000, with an option year also valued at $200,000, the contracting officer cannot use the
approval and funding related to the option year to cover an increase in the services required
during the first year.
6. Contract Code for Pre-approved Amendments
a. Document Type number 22, Contract Code for Pre-approved Amendments is available in the
Automated Buyer Environment (ABE) and SELECT, and is used to identify all pre-approved
amendments.
b. These include, but are not limited to:
i. amendments issued to exercise an option for additional quantities or years that formed part
of the original bid solicitation and approved as part of the original contract approval
submission; and,
ii. amendments which use amounts set-aside for anticipated, but not yet clearly defined,
changes (e.g., unscheduled work, design changes, work arising), which were approved as
part of the original contract approval submission.
c. Amendments that do not fit within the description of the original approval or go beyond the scope
or value of the approval will be coded as "Normal Amendments" and must be approved at the
appropriate level as determined by the Minister's delegation of amendment authorities.
7. Rates (or prices-to-be-negotiated)/Interim Rates (or prices)

If the basis of payment in a contract includes interim rates (or prices) and it is proposed to amend the
contract to provide for firm rates (or prices) in lieu, then the amendment approval authority level will be
as follows (unless otherwise instructed by the contract approval authority):
a. Contracting authority, only if the firm rates (or prices) are equal to or less than the interim rates
(or prices); or
b. For Level 1, 2 and 3 procurements, a Procurement Risk Assessment for Amendments is required
to determine the appropriate approval authority; or
c. Director General, if the contract was approved by the Assistant Deputy Minister, the Minister or
TB.
8. Combining Several Types of Contract Changes in One Amendment

When a contract amendment is raised to incorporate several types of changes enumerated above (i.e.,
firming up price-to-be-negotiated items, using a portion of an amount set aside, addition of
items/quantities, etc.), the highest approval level must apply for any one type of these changes or
combinations being incorporated into the contract by that amendment.
9. Amendments to Contracts with Former Public Servants

Treasury Board (TB) must approve all amendments to service contracts with former public servants in
receipt of a pension pursuant to the Public Service Superannuation Act when these amendments exceed
the limits specified in section 1.1.1 of Annex 6.4.1: Approval Authorities and Additional Signing
Authorities in Support of Clients' Programs Only - Other than for Canadian Commercial Corporation.
10. Interpretation of Aggregate Amendment Value
a. All amendment approval authorities (for amendments not pre-approved) must be determined on
the basis of the aggregate amendment value.
b. Aggregate amendment value means the sum total of the amendments to a contract, including
positive and negative amendments. It applies only to amendments requiring TB approval. For
internal purposes and to ensure adequate control measures are in place, the aggregate amount for
amendments not pre-approved will be calculated using only positive amendments.
c. As a general principle, once an approval level has been reached, it can never be lowered. As an
example, once the manager level for approval has been reached for Complexity Level 1
procurements, then every subsequent positive amendment reverts to the manager regardless of
dollar value.
d. Nil value amendments where no further risk or liability accrued to Canada are administrative in
nature and can be approved and signed by the Contracting Authority. For nil value amendments
where further risk or liability will be Canada's responsibility, the completion of a Risk Assessment
for Amendments is required to determine the appropriate approval authority.
e. Extending the period of a contract with a specific end date (i.e. a contract, task authorization
contract, standing offer or supply arrangement, etc.) cannot be treated as administrative in nature.
Adding additional time to the contract represents additional liability for Canada regardless of
whether or not additional funding is required. For example, if a contract has been awarded for a
two (2) year period ending March 31st, in the amount of $10M and there is $4M left over on
April 1st, that $4M cannot be used for an extension of the contract without obtaining the
appropriate approval, even though the original approval to contract was for $10M.
11. Amendment Approved by Treasury Board

When TB has approved an amendment, PWGSC may further amend the contract without TB approval if
the cumulative value of the amendments after each issuance of an amendment pursuant to a TB approval
does not exceed the non-competitive contract amendment approval authority limits set out in Annex
6.4.2: Contracting Limits.
7 Chapter 7 - Award of Contracts and Issuance of Standing Offers and Supply

Arrangements
(2012-01-18)
7.1 Overview of contract award and issuance of standing offers and supply
arrangements
(2016-08-19)
a. This chapter describes the process of contract award to a successful bidder, as well as the issuing of the
authorization to use a standing offer (SO) or a supply arrangement (SA) received from a successful
offeror or supplier. It also provides general instructions for release of information to the public about the
results of the bid solicitation.
b. Before award/issuance of the document, the contracting officer must ensure that the following elements
have been appropriately addressed:
i. industrial security requirements (see 3.55 Industrial Security Requirements (Personnel or

Organization) and 5.15 Verifying Compliance with Security Requirements);
ii. vendor performance corrective measures (see 8.180 Vendor Performance Policy);
iii. supplier financial capability or financial security (see 5.60 Financial Capabilities of Contractor);
iv. award/issuance is in accordance with the approval obtained and any exceptions to internal
approval authorities (see article 1.1. of Annex 6.4.1: Approval Authorities and Additional Signing
Authorities in Support of Clients' Programs Only - Other than for Canadian Commercial
Corporation);
v. Integrity Provisions (see 5.16 Integrity Compliance);
vi. Federal Contractors Program for Employment Equity (see Annex 5.1 Federal Contractors
Program for Employment Equity).
c. Electronic Signatures: When awarding a contract or issuing a standing offer or supply arrangement,
the contracting officer may choose to electronically sign the front page of the document using their
MyKey (or a Public Key Infrastructure [PKI] certificate) to self-authenticate. The contracting officer
must save the completed document outside of the Automated Buyer Environment (ABE) as a PDF
document. The contracting officer can then electronically sign the document using Adobe Acrobat or
another PDF writer software after being prompted to self-authenticate using their MyKey (or a PKI
certificate).
7.5 Contract Award

(2016-04-04)
a. Contract award may take place at any time, after bid closing and completion of the evaluation, and
before the bid validity expiry date. The contract document will depend on the type of bid solicitation.
b. A purchase order will be issued when quotations are received, either by way of a Request For Quotation
(RFQ) or a telephone buy. If quotations were solicited by telephone, the supplier must confirm, in
writing, the terms of the purchase order.
Note: Prior to issuing a purchase order, contracting officers must follow the integrity verification
process outlined in section 5.16 Integrity Compliance.
c. A "Your Tender/Proposal is accepted" document will be issued when tenders/proposals are requested,
and the bid is received in writing and accepted. This type of document is used when the contract reflects
those conditions proposed, or agreed to in writing, by the successful bidder. The document should make
reference to the bid and any amendments to it.
Note: Construction contracts are awarded under a true bid and acceptance process. The bidder submits
the completed bid and acceptance form, and Public Works and Government Services Canada (PWGSC)
sends an acceptance document.
d. A "You are Requested" document is issued where the proposed contract may reflect a condition not
agreed to in writing by the successful bidder. This constitutes a counter-offer by PWGSC, and must be
accepted by the successful bidder in writing to constitute a legally binding contract.
Note: The "You are Requested" documents, and in some cases purchase orders, are not contracts but
only offers by PWGSC to potential contractors. Although a legal contract does not exist, such offers
usually reflect the contracting officer's understanding of the conditions, which are agreeable to the
successful bidder. If the successful bidder does not accept the PWGSC offer, or proposes modifications
to the contract, the matter should be referred to Legal Services.
e. Formal Agreements. Contracting officers must consult with Legal Services when considering this type
of contract.
7.10 Issuance of Supply Arrangements and Standing Offers

(2010-01-11)
Following a Request for Standing Offers (RFSO) or a Request for Supply Arrangements (RFSA) process, an
authorization document is issued, which gives contracting officers and client departments, when applicable, the
authority to use the instrument. For more information on the use of these instruments, see 3.5 Existing
Procurement Instruments, 3.15 Non-competitive Contracting Process, 4.10.20 Request for Standing Offers and
4.10.25 Request for Supply Arrangements.
7.10.1 Standing Offers

(2017-06-21)
a. The authorization document for standing offers, entitled "Standing Offer and Call-Up Authority", may
take one of the following forms:
i. a "National Master Standing Offer (NMSO)", which is generally issued for the use of all
departments. PWGSC contracting officers and client departments are both authorized to make
call-ups;
ii. a "Departmental Individual Standing Offer (DISO)", which is generally issued for the use of a
single client. Only PWGSC contracting officers are authorized to make call-ups. However,
software DISOs, which are structured more like NMSOs, are an exception as they authorize the
client to make call-ups;
iii. a "National Individual Standing Offer (NISO)", which is generally issued for the use of a single
client. Both PWGSC contracting officers and client department are authorized to make call-ups;
iv. a "Regional Master Standing Offer (RMSO)", which is generally issued for the use of many
clients within a specific geographic area; and
v. a "Regional Individual Standing Offer (RISO)", which is generally issued for the use of a single
client within a specific geographic area.
b. Call-ups must be made in accordance with the procedure set out in the SO and, in the case of multiple
SOs, in accordance with the call-up methodology described in all of the SOs being referenced. Call-ups
cannot exceed the contracting limit set out in the standing offer. For more information on allowable call-
up limitations, see 4.10.20.1(a).
c. A call-up against a standing offer carried out by an identified user constitutes acceptance of the offer.
The SO (offer) and call-up (acceptance) form a binding contract between Canada and the offeror.
Several options can be used to issue a call-up under a SO:
i. the Canada acquisition card (Visa or MasterCard) for low dollar value requirements
ii. PWGSC-TPSGC 942 Call-up Against a Standing Offer
iii. PWGSC-TPGSC 942-2 Call-up Against a Standing Offer - Multiple Delivery
iv. PWGSC-TPSGC 944 Call-up Against Multiple Standing Offers (English version)
v. PWGSC-TPSGC 945 Commande subséquente à plusieurs offres à commandes (French version)
7.10.5 Supply Arrangements

(2010-01-11)
a. The authorization to use a supply arrangement insert (SA) will take the form of a SA document that is
generally issued for use by all client departments. Client departments may or may not be authorized to
award contracts or issue bid solicitations. If authorized, they will award contracts under their own
contracting authority within their own financial contracting authority. For contracts beyond client
departments' contracting authority, PWGSC will be the contracting authority.
b. Resulting contracts must be awarded in accordance with the procedures, and within the contracting
limits, described in the supply arrangement.
7.15 Legal Entity

(2010-01-11)
a. Whatever the form of procurement document, the contracting officer must ensure that it is with a
supplier that is a legal entity having the legal capacity to contract, and that the supplier's legal name is
used.
b. Possession of a Procurement Business Number (PBN) is not equivalent to having the legal capacity to
contract. The contracting officer must still verify that the supplier has the legal capacity to contract.
c. For example, a contract may not be awarded to a division of a corporation, as it is not a legal entity. Be
aware that computerized source lists may include an abbreviated name for a supplier. In some cases, a
legal entity (for example a numbered company) will use a business name to do business. In such cases,
the legal name (the number of the company) must be used and it could be followed by "doing business
as ______(insert the business name)".
7.20 Letter of Intent

(2010-01-11)
a. When the timely delivery of goods or services would be jeopardized by lengthy negotiations, a Letter of
Intent authorizes commencement of the work before the contract is awarded. It is a binding commitment
to place a contract with a designated supplier.
b. Letters of Intent can only be used in exceptional circumstances, and must not be issued without prior
approval of the Deputy Minister (DM).
c. A Letter of Intent is issued subsequent to DM approval of the conditions already agreed to by the
proposed contractor, but before obtaining contract approval of all the conditions of the proposed
contract.
d. Letters of Intent are prepared by Legal Services with the cooperation of the contracting officer.
e. No contractual commitment may be made that would constitute the first step of a procurement that
might require subsequent Treasury Board approval.
f. The Letter of Intent must accurately describe the work authorized, state the maximum liability of
Canada, expressed as funds to be spent by the contractor, and specify how the payment will be made.
The contract serial number that will be assigned to the subsequent contract must be indicated on the
Letter of Intent.
g. After DM approval is received, the original Letter of Intent must be signed by the appropriate contract
signing authority and distributed in the same manner as a contract.
h. On completion of negotiations of all the conditions of the proposed contract, the contract approval
document will be submitted for review and approval at the appropriate level.
i. The contracting officer must clearly indicate in the contract that the work authorized under the Letter of
Intent is not to be duplicated.
7.25 Go-Ahead Letters

(2010-01-11)
Go-ahead letters may be issued after obtaining final approval of the contract approval document, provided all
appropriate conditions of the proposed contract are known and accepted by the proposed contractor. Go-ahead
letters are subject to the appropriate signing authorities. After issuing the go-ahead letter, the contract must be
sent to the contractor in a timely manner.
7.30 Procurement Reporting and Posting of Award Notices

(2013-07-03)
The following sections describe procedures that contracting officers must follow to meet departmental
responsibilities for award notices and contract activity reporting. These requirements stem from legal
requirements, corporate and government policies, parliamentary needs and departmental procedures. The
following is a summary of reporting requirements:
i. Award Notices posted on the Government Electronic Tendering Service (GETS);

ii. Purchasing Activity Reports (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/con_data/siglist-eng.asp) (government-wide
annual reporting);
iii. Contract History database (published on Buyandsell.gc.ca);
iv. Comprehensive Land Claim Agreement contract reporting;
v. Procurement Strategy for Aboriginal Business reporting (http://www.aadnc-
aandc.gc.ca/eng/1100100032802/1100100032803) ;
vi. Trade agreements reporting requirements; and;

vii. Specific procurement activities such as contracts with task authorizations, terminations and conditional
amendments related to vendor performance.
Note: The above section is not written to address the complete reporting requirements of client departments or
suppliers, but only of contracting officers in the Acquisitions Program of Public Works and Government
Services Canada.
7.30.1 Award notices on the Government Electronic Tendering Service

(2017-07-01)
a. For procurements subject to the international trade agreements and the Canadian Free Trade Agreement
(CFTA), an award notice must be posted on the Government Electronic Tendering Service (GETS)
within 72 days of contract award. Although there are no minimum time periods identified for the
Agreement on Internal Trade (AIT), the 72-day limit applies for reasons of consistency.
b. For all contractual documents issued through the Automated Buyer Environment (ABE), award notices
are generated automatically through ABE, with the release of the completed Procurement Summary, and
posted on Buyandsell.gc.ca, except when the "National Security" indicator is checked. See 7.30.30 Use
of the National Security Indicator for more details.
c. For more information on completing the Procurement Summary, see the Automated Buyer Environment
Blue Book (PDF 1.58 MB) (Help with PDF files).
d. For procurements subject to the trade agreements where ABE is not used for contract award, contracting
officers must create award notices using the Tender Management Application (TMA) on
Buyandsell.gc.ca. For more information about obtaining an account to use TMA, please contact the
InfoLine at: 1-800-811-1148.
7.30.5 Procurement Activity Reporting to Treasury Board Secretariat

(2017-07-01)
a. In 1996, Public Works and Government Services Canada (PWGSC) agreed with the Treasury Board
Secretariat (TBS) that PWGSC would be responsible for collecting contract data from other government
departments and agencies to generate the annual procurement activity reports. This annual activity
entails the reporting of the following:
i. federal contracting (on behalf of the Treasury Board Secretariat);
ii. federal contracting in respect of all Trade Agreements to which Canada is a signatory (on behalf
of the Department of Foreign Affairs and International Trade);
iii. federal contracting in respect of the Canadian Free Trade Agreement, the Agreement on Internal
Trade, and the Ownership of Intellectual Property (on behalf of the Department of Industry); and
iv. all procurements related to the Procurement for Aboriginal Business (on behalf of the Department
of Aboriginal Affairs and Northern Development Canada).
b. The Office of Small and Medium Enterprises and Strategic Engagement (OSME-SE) is responsible for
assembling contract activity data based on input submitted from all departments and agencies. This
information is then provided to TBS to support the publishing of the government's Purchasing Activity
Reports (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/con_data/siglist-eng.asp) for each calendar year.
c. On completion and release of the procurement summary in the Automated Buyer Environment (ABE),
the award data is sent automatically to the Acquisition Information System (AIS) and will be included
in the contract activity reporting.
d. PWGSC Contract Activity Outside of ABE: Contracts done outside of ABE must be reported to
OSME-SE at NCRReporting.RCNRapportage@pwgsc-tpsgc.gc.ca on an annual basis. The reports,
summary or detail, should be submitted by the end of February. Such reports should include contract
activity such as formal agreements, confirming orders, security sensitive contracts and any other
contract or call-up not otherwise captured in automatic reporting in ABE.
e. Standing Offers and Supply Arrangements: In the past, departments and agencies have reported only
the total contract activity under standing offer agreements instead of reporting details on individual call-
ups as quite a number of departments did not have the capability to report against call-ups. Beginning in
2011, departments and agencies phased in the reporting of standing offer call-ups as part of the
Purchasing Activity Reports. Effective January 2011:
i. all call-ups issued by PWGSC contracting officers are captured in the Government Contract
Activity Report assembled by OSME-SE. Contracting officers must release the procurement
summary in ABE for all call-ups to ensure the data is captured;
ii. the value entered for the total estimated value, appearing on the front page of Standing Offers is
no longer used as part of the contract activity report, regardless of the type of standing offer.
Contracting officers within AB are not responsible for reporting client departments' contracts/call-
ups which utilizes PWGSC SOs and SAs. This is reported to OSME-SE directly from the
departments;
iii. call-ups done within PWGSC/AB but outside of ABE must be reported separately to OSME-SE
per subsection d. of this section.
7.30.10 Contract History on Buyandsell.gc.ca

(2013-06-27)
a. The Contract History database for Public Works and Government Services Canada (PWGSC) common
services procurement was originally launched to facilitate requests about contracts awarded by PWGSC,
and is accessible to both suppliers and government buyers. Making this data readily available supports a
reduction in access to information and privacy (ATIP) requests for information on contract awards. On
March 8, 2013, this database was added to the Procurement Data section on BuyandSell.gc.ca, along
with other data such as Standing Offers and Supply Arrangements (SOSA), and also Goods and
Services Identification Number (GSIN) on June 1, 2013.
b. On completion and release of the procurement summary in the Automated Buyer Environment (ABE),
the award data is sent automatically to the Contract History database and published on Buyandsell.gc.ca,
except when the National Security indicator is checked. There is no requirement for buyers to report in
this system for contracts done outside of ABE.
7.30.15 Comprehensive Land Claims Agreement Reporting

(2013-06-27)
a. As detailed in Treasury Board Secretariat Contracting Policy Notice 2008-4 (http://www.tbs-

sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/2008/0619a-eng.asp) , the government monitors and reports on
procurements that are subject to Comprehensive Land Claims Agreements (CLCAs). Therefore,
contracting officers must ensure that the coding for procurements subject to CLCAs is done accurately.
See section 7.70.30 Comprehensive Land Claims Agreement (CLCA) Coding for instructions for the
Automated Buyer Environment (ABE).
b. Contracting done outside of ABE must be reported as described in subsection d. of 7.30.5 Procurement
Activity Reporting to Treasury Board Secretariat.
7.30.20 Procurement Strategy of Aboriginal Business Reporting

(2013-06-27)
a. Treasury Board Secretariat (TBS) ARCHIVED - Aboriginal Business Procurement Policy Performance
Objectives - (Contracting Policy Notice 1996-6) (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/cpn_96-
6-eng.asp) sets out details of department's responsibilities with respect to developing performance
objectives relating to procurements from aboriginal businesses and to develop related reporting
mechanisms. The establishment of, and reporting on, annual objectives in support of the program,
includes value and numbers of contracts awarded to Aboriginal businesses, supplier promotion
activities, and increased representation of Aboriginal businesses on department source lists.
b. Therefore, contracting officers must ensure that reporting on procurements subject to a Procurement
Strategy of Aboriginal Business (PSAB) set-aside is done accurately. All procurements subject to PSAB
must be coded as such; in the Automated Buyer Environment (ABE), this involves clicking on "Trade
Agreement" and selecting "Set-Aside Program for Aboriginal Business (SPAB)".
7.30.25 Trade Agreements Reporting

(2017-09-21)
a. Some trade agreements, including the Canadian Free Trade Agreement (CFTA), the Agreement on
Internal Trade (AIT), Canada-European Union Comprehensive Economic and Trade Agreement
(CETA), the North American Free Trade Agreement (NAFTA) and the World Trade Organization
Agreement on Government Procurement (WTO-AGP) require that parties report on covered
procurement. In response to this obligation, Public Works and Government Services Canada provides
statistics to the Treasury Board Secretariat who is responsible for the government-wide report.
b. Contracting officers are to ensure that the procurement summary in the Automated Buyer Environment
(ABE) is coded properly when their procurement is covered by CFTA, AIT, CETA, NAFTA and/or the
WTO-AGP. ABE selection choices, which include NAFTA, also include the bilateral trade agreements
that have reporting obligations.
c. Contracts done outside of ABE must be reported as per subsection d. of 7.30.5 Procurement Activity
Reporting to Treasury Board Secretariat. Such reports must identify whether the procurement was
covered by the CFTA, AIT, CETA, NAFTA and/or the WTO-AGP.
7.30.30 Use of the National Security Indicator

(2013-06-27)
a. There may be circumstances other than National Security where posting an award notice could
reasonably be expected to compromise government confidences, cause economic disruption, or
similarly be contrary to the public interest. On the other hand, there are procurements for which a
National Security Exception (NSE) was approved in accordance with paragraph 3.105 National Security
Exceptions of the Supply Manual, but it is still appropriate to post an award notice.
b. A contracting officer may suppress the posting of an award notice by checking the box for the National
Security Indicator in the ABE Procurement Summary. Contracting officers must treat this indicator as if
it were labeled “Suppress Posting”.
c. For amendment documents in ABE, the value of the National Security Indicator always defaults to “No”
(unchecked) regardless of the value on the original document. If the National Security indicator was
“Yes” (checked), on the original award, the contracting officer must remember to choose “Yes” (by
checking the box) for subsequent amendments. If the National Security indicator was “No”
(unchecked) on the original award, the contracting officer must leave the box set to “No” (unchecked)
for subsequent amendments. Changing the value of the National Security Indicator on an award
amendment can result in awards being posted in error on the Buy and Sell website.
d. Therefore, the following procedures apply with regard to the National Security Indicator on the ABE
Procurement Summary:
i. when an NSE is invoked for a procurement in accordance with paragraph 3.105 of the Supply
Manual, and posting an award notice is contrary to the public interest, the contracting officer must
check the National Security Indicator box for the original contractual document and for any
subsequent amendments, thus no award notices will be posted for any documents.
ii. when an NSE is invoked in accordance with paragraph 3.105 National Security Exceptions of the
Supply Manual, and posting an award notice is not contrary to public interest, the National
Security Indicator must be left unchecked for both original and subsequent amendment
documents and the award notice will be posted.
iii. if an NSE does not apply, but the contracting officer’s management has advised that it is not in the
public interest to post an award notice, the contracting officer must check the National Security
Indicator box for the original contractual document and for any subsequent amendment
documents.
iv. if during the life of a contract, it is decided and approved that the National Security Indicator must
be changed (as not being the same as for the original), contracting officers must first contact the
Acquisitions Systems Service Desk (ITSB) either by phone at 819-956-3325 or via e-mail at:
assd.basa@pwgsc-tpsgc.gc.ca, to have them modify the indicator from the original contractual
documents. This is a complex process that, if not followed properly, can cause reporting issues,
so contracting officers should not attempt to make the change without ITSB’s assistance.
7.30.35 Reporting of Contract with Task Authorizations

(2013-06-27)
After issuing a contract with task authorizations (TAs) or an amendment to this type of contract, contracting
officers must report on the procurement. See section 7.70.35 Contracts with Task Authorizations - Coding for
instructions.
7.30.40 Reporting of Emergency Requirements

(2013-06-27)
Use of the emergency contracting authority is subject to the reporting requirement for such contracts as set out
in the TB Contracting Policy (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text) (see section 11.2.9
Emergency Contracting for details).
7.35 Notification to Unsuccessful Bidders/Offerors/Suppliers

(2010-01-11)
Contracting officers should notify unsuccessful bidders/offerors/suppliers as soon as possible after contract
award and issuance of a standing offer or supply arrangement. Samples of regret letters are provided in
Annex 7.1: Samples of Regret Letters.
7.40 Debriefing and Feedback Session to Bidders/Offerors/Suppliers

(2014-03-01)
a. Debriefing
i. The purpose of a debriefing is to explain to unsuccessful bidders/offerors/suppliers why their

bid/offer/arrangement was not accepted, allowing them to improve their future documents. A
debriefing demonstrates the fairness, openness, and transparency of the federal government
contracting process. Also, contracting officers can improve future solicitations by using the
comments and suggestions provided by bidders/offerors/suppliers.
ii. Every solicitation must include a provision stating that bidders/offerors/suppliers may request a
debriefing about the results of the solicitation. The departmental standard procurement templates
include a provision to this effect.
iii. Following the award of a contract or issuance of a standing offer (SO)/supply arrangement (SA), a
debriefing will be provided upon request. A written debriefing is usually done in the form of a
regret letter that is sent out to each unsuccessful bidder/offeror/supplier. See samples of regret
letters in Annex 7.1 Samples of Regret Letters.
iv. In the case of a complex procurement, when a solicitation is conducted in phases, the contracting
officer will notify unsuccessful bidders/offerors/suppliers at the end of each phase and provide a
debriefing upon request.
v. Within the limits expressed at section 7.45 Disclosure of information, a debriefing will include the
following, as applicable:
A. the name(s) of the successful bidder(s)/offeror(s)/supplier(s);
B. the total estimated cost of the contract(s), the unit price(s)/labour rate(s) of an SO, or
(where applicable) the firm/ceiling unit price(s) or labour rate(s) of an SA;
C. the total evaluated price of the successful bidder(s)/offeror(s)/supplier(s) and the total score,
if applicable;
D. very general information on the relative strengths of the successful

bid(s)/offer(s)/arrangement(s), ensuring that confidential and commercial information is not
divulged; and
E. an outline of the reasons the bid/offer/arrangement of the bidder/offeror/supplier being

debriefed was not successful according to the evaluation criteria and selection methodology.
In addition, scores achieved on all rated criteria will be provided with sufficient detail for
the bidder/offeror/supplier to understand why those scores were assigned.
b. Feedback Session
i. A feedback session is a form of debriefing. A feedback session will be provided, upon request,
when a solicitation is to be cancelled and reissued. The purpose of a feedback session is to
provide the bidder/offeror/supplier with information specific to their bid/offer/arrangement. As an
example, a feedback session will provide the bidder/offeror/supplier with information on which
mandatory criteria they passed or failed or their overall technical score or their score for each
technical criterion. This information will allow the bidder/offeror/supplier to understand why their
bid/offer/arrangement failed to meet the requirements. No information regarding other
bids/offers/arrangements or the solicitation to be reissued must be divulged.
ii. In order to ensure the fairness, openness, and transparency of the solicitation process, all
bidders/offerors/suppliers must have access to the same information on the solicitation to be
reissued. Therefore, all information provided in a feedback session must be documented by the
Contracting Authority. The information communicated during the feedback session, where
pertinent, will be provided in a generic form in the solicitation to be reissued to maintain fairness
to all potential bidders/offerors/suppliers. One or both of the following measures will be taken to
provide bidders/offerors/suppliers with this information:
A. The particular area of concern will be highlighted more prominently with additional
instructions to bidders/offerors/suppliers in the solicitation to be reissued (for example, by
adding text to inform or focus attention).
B. A bidders' conference will be held for the solicitation to be reissued. For further information
on bidders' conferences, see section 4.30.45.15 Bidders' Conferences and Site Visits.
iii. In determining which of these two measures, b. ii. A. and/or B., to use, contracting officers should
consider the following factors:
A. the complexity of the procurement or solicitation documents;
B. the likelihood of an unsuccessful reissued solicitation, e.g. if no responsive

bids/offers/arrangements had been received;
C. the nature of the issues that created a need to cancel and reissue the solicitation;
D. the sensitivity of the procurement; and
E. the estimated dollar value of the procurement.
iv. Both measures listed in, b. ii. A. and B. above, must be undertaken when Treasury Board (TB)
contract approval is required.
v. In accordance with subsection f. of section 4.100 Cancelling and Reissuing a Solicitation , all
solicitations to be reissued must include Standard Acquisition Clauses and Conditions (SACC)
clause A9043T Reissue of Bid Solicitation, informing bidders/offerors/suppliers that the reissued
solicitation cancels and supersedes the previous solicitation and that a debriefing or feedback
session will be provided, upon request, to bidders/offerors/suppliers who bid on the previous
solicitation.
c. Cancelled Solicitations
i. When a solicitation is cancelled prior to the bid solicitation closing date, the Contracting
Authority must adhere to the procedures addressed in section 4.100 Cancelling and Reissuing a
Solicitation.
ii. When a solicitation is cancelled after the bid closing date but prior to completing the evaluation of
mandatory or rated criteria, the Contracting Authority will inform bidders/offerors/suppliers of the
cancellation and that the evaluation of the bids/offers/arrangements was not completed.
iii. When a solicitation is cancelled after the bid closing date, following the evaluation of mandatory
or rated criteria, and a new solicitation is not planned or will not be issued, a debriefing will be
provided upon request in accordance with section 7.40 Debriefing and Feedback Session to
Unsuccessful Bidders/Offerors/Suppliers.
iv. When a solicitation is cancelled following the evaluation of mandatory or rated criteria and will
be reissued, then a feedback session will be provided upon request.
A. If the solicitation is cancelled because all bids/offers/arrangements are non-responsive or do

not represent fair value and the Statement of Requirements of the solicitation to be reissued
is significantly modified, bidders/offerors/suppliers will only be informed of which
mandatory criteria(s) or rated criteria(s) requiring a minimum score were failed but no
detail is to be provided as to why the bidders/offerors/suppliers failed each criteria. No
information on other rated criteria(s) is to be provided.
B. If the solicitation is cancelled because all bids/offers/arrangements are non-responsive or do

not represent fair value and the Statement of Requirements of the solicitation to be reissued
is not significantly modified, bidders/offerors/suppliers will be informed of which
mandatory criteria(s) or rated criteria(s) requiring a minimum score were failed with
sufficient detail for bidders/offerors/suppliers to understand why they failed each criteria.
No information on other rated criteria(s) is to be provided.
C. If the solicitation is cancelled for reasons other than those mentioned above,
bidders/offerors/suppliers will only be informed of which mandatory criteria(s) or rated
criteria(s) requiring a minimum score were failed but no detail is to be provided as to why
the bidders/offerors/suppliers failed each criteria. No information on other rated criteria(s)
is to be provided.
Bidders/offerors/suppliers will be advised not to make any assumptions from the information
received regarding the cancelled solicitation when bidding on the solicitation to be reissued as
evaluation criteria(s) may change.
d. Bidders/offerors/suppliers should request a debriefing or feedback session within fifteen (15) working
days of receipt of the results of the solicitation process or cancellation of the solicitation process.
e. A debriefing or a feedback session should be provided within ten (10) working days from the date a
request was received.
f. A debriefing or feedback session can be provided in writing, by telephone or in person. Contracting

officers are to determine which method will be most effective in the context of a particular procurement.
To the extent possible, any request for an in-person debriefing or feedback session, or for the
information to be provided in a particular way, should be accommodated.
g. Contracting officers should consult with management and, if required, legal services prior to providing a
debriefing or feedback session for a requirement that is sensitive or high risk.
h. If a fairness monitor was present during the evaluation process, then the contracting officer will advise
the fairness monitor of the date and time of any telephone/in-person debriefing or feedback session or
bidders' conference.
i. If legal counsel is to accompany the bidder/offeror/supplier to any in-person debriefing or feedback

session, or participate in any telephone debriefing or feedback session, the contracting officer will
inform Legal Services and discuss their participation.
j. Contracting officers must keep a record of the debriefing or feedback session information provided
including, but not limited to, minutes or a record of any meeting and comments and suggestions from
the bidders/offerors/suppliers.
k. Upon request, contracting officers should provide to bidders/offerors/suppliers the following general
information about the judicial and quasi-judicial bodies to which bid protests can be made. For any
given procurement, one or more of the following avenues may be available to a bidder/offeror/supplier
that wishes to make a claim regarding the conduct of the procurement:
i. Canadian International Trade Tribunal (CITT): Whether or not the CITT has jurisdiction to
conduct an inquiry regarding any particular procurement will depend on factors such as the
government institution conducting the procurement, the estimated value of the procurement, and
the nature of the goods, services, or construction services being procured. More information can
be obtained by visiting the How to File a Complaint (http://www.citt-tcce.gc.ca/en/how-file-complaint-
introduction) section on the CITT Web site.
ii. Office of the Procurement Ombudsman (OPO): If the value of the procurement is below the
monetary thresholds established under the Agreement on Internal Trade, the OPO may have
jurisdiction to conduct a review. More information can be obtained by visiting the Make a
Complaint section on the OPO Web site.
iii. An action in a Provincial/Territorial Superior Court or in Federal Court.
Note: There are strict deadlines for bringing bid protests, and the time periods vary depending on where
the bid protest is brought. Suppliers may wish to consult their own lawyers on the appropriate forum for
bringing a bid protest.
7.45 Disclosure of Information

(2010-01-11)
a. The following information can be released by contracting officers on a routine basis, after award of a
contract or issuance of a standing offer (SO) or supply arrangement (SA):
i. for all solicitations for goods and services, the name of the successful and unsuccessful
bidders/offerors/suppliers, responsive and non responsive, together with the total evaluated price
of the successful bidder/offeror/supplier and total score, if applicable. Since information on
bidders/offerors/suppliers who are individuals may qualify for exemption under the Privacy Act,
such requests should be directed to the Access to Information and Privacy Office as indicated in
7.45.b.;
ii. for all goods and services requirements subject to public opening, information which was released
at the public opening of bids; for example, name of each bidder and the total amount of each bid;
and
iii. individual unit pricing information including labour rates contained in standing offers (see
instructions at 7.45.c.).
b. The following types of requests for bid, contract or standing offer and supply arrangement information
should be referred to the Access to Information and Privacy Office:
i. names of bidders/offerors who are individuals and the content of their bids/offers, including
prices, since such information may be subject to an exemption under the Privacy Act;
ii. copies of bids/offers, including any accompanying catalogues, handbooks or pricing guides;
iii. copies of contracts, purchase orders or standing offer documents, including any accompanying
PWGSC-produced catalogues, handbooks, or acquisition guides;
iv. bid and contract information pertaining to classified requirements;
v. information contained in bids/offers/arrangements that have been cancelled or superseded by later

bids/offers;
vi. individual unit pricing pertaining to contracts or purchase orders for goods and services and
construction; and
vii. any other information not covered in (a) above.
Any disclosures not referred to the Access to Information and Privacy Office should first be discussed
with Legal Services.
c. To ensure a consistent approach to the public disclosure of information, PWGSC will release on a
routine basis the unit prices and labour rates contained in standing offers for goods and services.
Offerors must be informed of PWGSC's intention to disclose unit prices and labour rates contained in
successful offers in the event of a resulting standing offer. General conditions 2005 of the Standard
Acquisition Clauses and Conditions (SACC) Manual include a provision to this effect.
There may be circumstances where the provisions related to the disclosure of information, as set out
above, cannot be applied. Such circumstances must be handled on a case-by-case basis and would
require the approval of the manager or higher, depending on the approval authority, before issuing the
RFSO or RFSA.
7.50 Bid and Contract Security

(2010-01-11)
a. Surety bonds lapse automatically on expiration of the purpose or period for which they were required.
Security deposits (government guaranteed bonds, bills of exchange, irrevocable standby letters of credit)
must be returned to bidders. The bidder must return the letters of credit to the issuer to complete the
discharge.
b. Lapsing of surety bonds or return of security deposits (government guaranteed bonds, bills of exchange,
irrevocable standby letters of credit) must occur in the following way for all requirements except
construction:
i. for all bidders, at the expiration of the bid validity period, either as originally set or as extended;
ii. for unsuccessful bidders, prompt notification or return of a security deposit, immediately after a
contract is awarded, is essential in such cases so as not to constrain the their ability to make new
bids;
iii. for a successful bidder, if no contract security is required, immediately upon award of a contract
or, if contract security is required, once the contract security is received; and
iv. if contract security is required, the contract must be awarded before bid security lapses, if
applicable, but not before the contract security has been received.
c. Lapsing of surety bonds, or return of security deposits (government guaranteed bonds, bills of exchange,
irrevocable standby letters of credit) for construction requirements must occur as soon as practical
following:
i. the bid solicitation closing date, for those bidders submitting non-compliant bids;
ii. the administrative bid review, for those bidders submitting compliant bids ranked fourth to last on
the schedule of bids;
iii. the award of contract, for those bidders submitting the second and third ranked bids; and
iv. the receipt of contract security from the successful bidder; or
v. the cancellation of the bid solicitation, for all bidders.
vi. If one or more of the bids ranked third to first is withdrawn or rejected for whatever reason, then
Canada should reserve the right to hold the bid security of the next highest ranked compliant bid
in order to retain the bid security of at least three valid and compliant bids.
d. For construction services requirements, if contract security is required, the security must be received
within 14 days after contract award and before bid security lapses.

(2013-01-28)
a. For every proposed procurement, the client departments must identify the security requirements by
completing a Security Requirement Check List (SRCL) or else certify in writing that there are no
security requirements (date of no security requirement must be included).
b. The contracting officer must verify with the Canadian Industrial Security Directorate (CISD), and not
by using the security indicator from the VIM system, that the proposed contractor meets the security
requirements before contract award. For more information, see 5.15 Verifying Compliance with Security
Requirements.
c. Contracting officers must include a comment on the front page of the contract, standing offer, or supply
arrangement, as follows:
"THIS DOCUMENT CONTAINS A SECURITY REQUIREMENT (specify date of
statement)"
Or
"THIS DOCUMENT CONTAINS NO SECURITY REQUIREMENT (specify date of
statement)"
d. If applicable, the document index shall contain the block entitled:

"Security Requirement(s)"
AND, if applicable
"Location(s) of Work Performance"
e. If the contract, standing offer or supply arrangement contains security requirements, the contracting
officer must forward a copy of the contract, standing offer or supply arrangement, and any amendments,
or revisions, to CISD within two working days of the document being issued. Contracting officers may
send a PDF version of the document by e-mail to sncrcontracts@tpsgc-pwgsc.gc.ca. For procurements
using the Automated Buyer Environment (ABE), a copy of the contract is automatically sent to CISD.
f. When contracting for destruction of protected and classified government materials, contracting officers
must be aware of the additional measures required and manage the risks associated with the destruction
of protected and classified government materials. The Corporate Security Technical Standard defines
PWGSC corporate policy and procedures relating to classified waste destruction, and should follow the
interim standard, regarding classification levels of shredders, and complete the appropriate form ARC
0203, Request for Non-Accessioned Disposal, for the destruction of sensitive documents.
PWGSC threshold may be exceeded when administering destruction contracts on behalf of other client
departments, based on the client's threat risk assessment. If such is the case, the client may develop a
security guide as amplifying instructions, which is to be attached to the Security Requirements Check
List (SRCL).
g. For foreign classified information, consult with the Canadian Industrial Security Directorate before
undertaking destruction.

(2010-01-11)
Information on environmental considerations is found in sections 3.4 Contract Award and 3.5 Contract
Performance Clauses of the Guideline for Integration of Environmental Performance Considerations in Federal
Government Procurement.
7.65 Proactive Disclosure

(2013-06-27)
a. Client departments are required to report on a quarterly basis on contracts awarded with a value over
$10,000, an amendment with a value over $10,000, and an amendment when it modifies the initial value
of a contract to an amended contract value that is over $10,000. After January 1, 2013, departments will
be required to include information on contracts and contract amendments over $10,000 awarded to a
former public servant in receipt of a Public Service Superannuation Act (PSSA) pension on the
Disclosure of Contracts departmental websites.
b. Contracting officers for common services should be providing the required information to client
departments in a timely manner to facilitate their reporting process. For further information, consult the
Guidelines on the Proactive Disclosure of Contracts (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=14676) on the
Treasury Board of Canada Secretariat website.
7.70 Coding Procedures

(2013-06-27)
Statistical information pertaining to PWGSC contracting activities is required to meet corporate and
parliamentary needs. Contracting officers are responsible for ensuring the complete and accurate recording of
all contracts.
7.70.5 Public Works and Government Services Canada Reporting (Common Services)
(2013-06-27)
a. The Acquisition Information System (AIS) database contains over 16 full years of historical contracting
data beginning with calendar year 1993. AIS is a relational database. It is a collection of information
organized in related tables. A table is a collection of information about a certain topic. It contains data
about contracts, requisitions, solicitations, notices, organizations, vendors and customers. AIS feeds data
to the Contract History application on Buyandsell.gc.ca. Most procurement-related data comes from the
Automated Buyer Environment (ABE), but for those organizations who don't have access to ABE, there
is a limited front end user interface called Automated Data Capture (ADC). From ABE, the working
copy requisition, contract and line item information is sent upon release of the procurement summary
for original contracts, and upon coding an amendment, an assignment or the termination of a contract.
Within the ABE environment, there are several fields that are mandatory or that cannot be changed to
protect data integrity.
b. Contracting officers must follow the coding procedures in the Contract Coding Reference Guide .
c. The Contract Coding Reference Guide contains a list of elements and definitions found in the
Procurement Summary Release Document. The Procurement Summary Release Document is completed
by the contracting officer and the information it contains is then released to AIS.
7.70.10 Coding of Advance Contract Award Notice Results

(2013-06-27)
a. In the Automated Buyer Environment (ABE) Procurement Summary, when the requirement is
competitive, choose the blank when selecting a choice from the ACAN Result box. This will create the
response "Not Applicable" in the No ACAN Reason box.
b. Where an ACAN is not published for other reasons, users are directed to choose only the option "No
ACAN", when selecting a choice for this box. The choices of "ACAN not required" has been removed,
and leaving it blank should only be selected as per a. above.
c. The No ACAN Reason box then requires the user to select one No ACAN reason to explain why a
competitive process cannot be followed, so an ACAN must not be used. See section 3.15.5.15 Advance
Contract Award Notice Exceptions for details.
7.70.15 Coding of Region of Delivery

(2013-06-27)
When entering the delivery points information for a standing offer or supply arrangement within the
Procurement Summary in the Automated Buyer Environment (ABE), contracting officers must select only those
provinces or territories where potential deliveries may occur. The "national button" in the Procurement
Summary must only be selected if it is for a National (Master or Individual) Standing Offer, and if potential
deliveries may take place in all of the provinces and territories.
7.70.20 Coding of Call-ups

(2014-03-01)
Call-ups are coded as competitive or non-competitive depending on the procurement strategy used on the
underlying Standing Offer.
a. If a Standing Offer is issued competitively, with a clear ranking methodology for issuing call-ups in
accordance with section 4.10.20.5 Ranking and Methodology for Standing Offers, then the resulting
call-ups are considered competitive and must be coded accordingly.
b. A Standing Offer that uses the Advance Contract Approval Notice is considered competitive for
approval purposes only; call-ups resulting from a Standing Offer subject to an Advance Contract Award
Notice (ACAN) posting must be coded as non-competitive.
c. If a Standing Offer is issued using a non-competitive (sole-source) procurement strategy, or does not
have a clear ranking methodology (e.g. the client can choose which firms to issue call-ups), then the
resulting call-ups are considered non-competitive and must be coded accordingly.
7.70.25 Coding of Terminations and Conditional Amendments

(2013-06-27)
Contracting officers must do procurement coding in the Automated Buyer Environment (ABE) in support of the
Vendor Performance Corrective Measures Policy (VPCMP) as follows:
a. Terminations for Default: When terminating contracts, purchase orders, or call-ups (sole source or
competitive), contracting officers must select one of the two new codes, "Full Termination for Default"
or "Partial Termination for Default", from the drop down list in the Document Type field of the
Procurement Summary. The code "Termination for Default" is no longer available in the Document
Type drop down list.
b. Conditional Amendments: When amending contracts, purchase orders or call-ups (sole source or
competitive) conditionally, contracting officers may now select the new code "Conditional Amendment"
from the drop down list in the Document Type field of the Procurement Summary.
Note: A conditional amendment is triggered by an event as defined in the VPCMP. For more
information on when you can use a conditional amendment, see section 8.180.10 Definitions.
7.70.30 Comprehensive Land Claims Agreement Coding

(2013-06-27)
Contracting officers using the Automated Buyer Environment (ABE) must properly code all procurements
subject to Comprehensive Land Claims Agreements (CLCAs) by following these steps:
a. Click the checkbox for CLCAs on Part I of the Procurement Summary.
b. On Part II of the Procurement Summary, under "Project ID", select all applicable CLCAs.
c. On Part II of the Procurement Summary, under "Project ID", select either "CLCA bid criteria included
in the solicitation? -- Yes" or "CLCA bid criteria included in the solicitation? -- No" as appropriate.
d. If bidding on a procurement restricted to CLCA beneficiaries under a CLCA right of first refusal, then
the procurement must be coded, on Part I of the procurement summary, as "Only CLCA Beneficiaries
Solicited" for the Trade Agreement field and as "Set-asides for Small and Minority Businesses" for the
Derogation field.
7.70.35 Contracts with Task Authorizations - Coding

(2013-06-27)
Contracting officers must code contracts with Task Authorizations (TA)s as follows:
a. For Automated Buyer Environment (ABE) users: on the main page of the Procurement Summary,
click on "Program ID", and select "Contract that allows Task Authorizations".
b. For Automated Data Capture (ADC) users: include the following statement when submitting the
ADC procurement report: "Program ID: Contract that allows Task Authorizations".
Annex 7.1: Samples of Regret Letters

(2010-01-11)
Appendix A 7.1.1: Regret Letter to Unsuccessful Bidders/Offerors/Suppliers - Responsive

(2014-06-26)
Note to Contracting Officer: Because the evaluation methodology for different procurements varies, this letter
will have to be tailored to the individual requirement. This letter has been drafted assuming that this
bidder/offeror/supplier, although unsuccessful, its bid/offer/arrangement was declared responsive because it has
met all mandatory requirements. Contracting officers should use the other sample regret letter in Appendix B
7.1.2: Regret Letter to Unsuccessful Bidders/Offerors/Suppliers - Non-responsive Bid/Offer/Arrangement if the
bid/offer/arrangement was declared non-responsive.
________(insert date)
____________(insert department address)
Attention: ___________(insert name of addressee)
_____________(insert supplier's name and address)
Dear Mr./Mrs. ____________(insert the addressee's last name):
Subject: Solicitation No. ________
Thank you for your ____________(insert "bid" or "offer" or "arrangement") submitted in

response to our request for ____________(insert brief description of goods/services).
This is to inform you that a ___________(insert "contract" or "Standing Offer (SO)" or

"Supply Arrangement (SA)") will not be ___________(insert "awarded" or "issued") to
you for this requirement. A __________(insert "contract" or "SO" or "SA") has been
____________(insert "awarded" or "issued") to the successful __________(insert "bid"
or "offer" or "arrangement") submitted by ____________(insert name of successful
bidder/offeror/supplier) in response to the above-noted solicitation. The price of the awarded
_________(insert "contract" or "SO" or "SA") is $_________(insert value of
awarded contract or issued SO or SA), excluding Goods and Services Tax/Harmonized Sales
Tax, as applicable.
Although your _______(insert "bid" or "offer" or "arrangement") was found to be

responsive to the mandatory requirements of the solicitation, it did not achieve the highest-ranking under the
evaluation methodology described in the solicitation.
For your information and to assist you in responding to future solicitations, you are informed that your
_________(insert "bid" or "offer" or "arrangement") was evaluated as follows in
comparison to the successful ___________(insert "bid" or "offer" or "arrangement"):
Appendix A - This table shows the point rating scored by the successful and unsuccessful bidders.
Technical Financial
Comparison
Score Score
Successful_______(insert "bid" or "offer" or

"arrangement")
Your _______(insert "bid" or "offer" or
"arrangement")
I would like to thank you for submitting your _________(insert "bid" or "offer" or
"arrangement") and your interest in being a supplier to the Government of Canada. Your participation is
appreciated, and I hope that you will continue to bid on procurement opportunities offered by Public Works and
Should you require further information regarding the evaluation of your ___________(insert "bid" or
"offer" or "arrangement"), please do not hesitate to contact me.
If you have any concerns relating to the procurement process, please refer to the Recourse Mechanisms page on
the Buyandsell.gc.ca website. Please note that there are strict deadlines for filing complaints with the Canadian
International Trade Tribunal (CITT) or the Office of the Procurement Ombudsman (OPO).
_________________(insert name of contracting authority)

Telephone: _____-_____-______
E-mail: ________@tpsgc-pwgsc.gc.ca
cc: ________(insert any additional names of people who should receive a copy)
Appendix B 7.1.2: Regret Letter to Unsuccessful Bidders/Offerors/Suppliers - Non-

responsive Bid/Offer/Arrangement
(2014-06-26)
Note to contracting officer: Because the evaluation methodology for different procurement varies, this letter will
have to be tailored to the individual requirement. This letter has been drafted assuming that the
bid/offer/arrangement was declared non-responsive because it has not met one or more mandatory requirements.
Contracting officers should use the other sample regret letter provided in Appendix A 7.1.1: Regret Letter to
Unsuccessful Bidders/Offerors/Suppliers - Responsive Bid/Offer/Arrangement if the bid/offer/arrangement was

declared responsive but simply wasn't the highest-ranked.
____________(insert department address)
________(insert date)
_____________(insert supplier's name and address)
Attention: ___________(insert name of addressee)
Dear Mr./Mrs. ____________(insert the addressee's last name):
Subject: Solicitation No. ________
Thank you for your ____________(insert "bid" or "offer" or "arrangement") submitted in

response to our request for ____________(insert brief description of goods/services).
This is to inform you that a _________(insert "contract" or "Standing Offer (SO)" or

"Supply Arrangement (SA)") will not be issued to you for this requirement. A _________(insert
"contract" or "SO" or "SA") has been awarded to the successful ________(insert "bid" or
"offer" or "arrangement") submitted by ________(insert name of successful
bidder/offeror/supplier) in response to the above-noted solicitation. The price of the awarded/issued
_________(insert "contract" or "SO" or "SA") is $_________(insert value of
awarded contract or SO or SA) excluding Goods and Services Tax/Harmonized Sales Tax, as
applicable.
As indicated in the solicitation, a ______(insert "bid" or "offer" or "arrangement") was

required to meet each and every mandatory requirement. Unfortunately, the evaluating team determined that
your ______(insert "bid" or "offer" or "arrangement") did not comply with all the
mandatory requirements of the solicitation, including the following:
__________________(insert description of non-compliance)
To provide you with information on the characteristics and relative advantages of the successful
_________(insert "bid" or "SO" or "SA"), you are informed that the successful
_______(insert "bid" or "SO" or "SA") has satisfied all the mandatory requirements of the
solicitation and scored on the technical point-rated requirements (insert table below if relevant), as follows:
Appendix B - This table shows the point rating scored by the successful and unsuccessful bidders
Technical Financial
Comparison
Score Score
Successful_______(insert "bid" or "offer" or
"arrangement")
Your _______(insert "bid" or "offer" or
"arrangement")
INSTRUCTION TO CONTRACTING OFFICER:

1. If you did not score the bid/offer because it was disqualified early in the process, add the following
sentence (i.e. As a result of finding your …) and delete the second row in the above table (i.e. Your
____...).
2. If you are providing the unsuccessful bidder/offeror/supplier with its score, delete the following
sentence (i.e. As a result of finding your …).
As a result of finding your ______(insert "bid" or "offer" or "arrangement") to be non-

responsive, your ______(insert "bid" or "offer" or "arrangement") was disqualified and
Canada did not proceed with your evaluation and did not determine a technical score for your ______(insert
"bid" or "offer" or "arrangement").
I would like to thank you for submitting your ______(insert "bid" or "offer" or
"arrangement")) and your interest in being a supplier to the Government of Canada. Your participation is
appreciated, and I hope that you will continue to bid on procurement opportunities offered by Public Works and
Should you require further information regarding the evaluation of your ________(insert "bid" or
"offer" or "arrangement"), please do not hesitate to contact me.
If you have any concerns relating to the procurement process, please refer to the Recourse Mechanisms page on
the Buyandsell.gc.ca website. Please note that there are strict deadlines for filing complaints with the Canadian
International Trade Tribunal (CITT) or the Office of the Procurement Ombudsman (OPO).
___________(insert name of contracting authority)

Telephone: ____-____-______
E-mail: ________@tpsgc-pwgsc.gc.ca
cc: ________(insert any additional names of people who should receive a copy)
8 Chapter 8 - Contract Management

(2012-01-18)
8.1 Overview of contract management

(2015-09-24)
a. Contract management is the process of systematically and efficiently managing contract development,
implementation, and administration for maximizing financial and operational performance and
managing inherent risk. Contract management encompasses the life cycle of a contract and involves
many stakeholders including, but not limited to the contracting officer, the client department and the
supplier.
b. Contract administration is an important part of contract management, which includes those activities
performed after a contract award, to ensure files are properly maintained and that the contractor meets
the requirements of the contract.
c. Contract management is an essential element of the procurement process that protects the interests of
Canada while ensuring that suppliers are being treated fairly. Contract management can be divided into
four distinct phases:
i. pre-contractual (planning);
ii. contracting (bidding and awarding of contract);
iii. contract administration (after the contract is awarded);
iv. post-contractual (close out, warranty and audit).
The pre-contractual phase is addressed in the contents of Chapter 2 - Defining the Requirement and
Requisition Receipt and Chapter 3 - Procurement Strategy. The importance of early involvement by
contracting officers during the pre-contractual phase cannot be overstated, as this sets the tone for the
balance of the contract life cycle activities.
d. Planning of the details of how the contract will be managed should start during the formulation of the
requirement itself, which will set the standards of what the contractor must do, how performance will be
monitored and what standards will be used. These details, together with other procedures related to how
the contract will be managed, should be included in the bid solicitation, to allow bidders to determine
what is required of them, to plan the activities needed and to reflect the costs in their bids.
e. The contracting phase is addressed in Chapter 4 - Solicitation Process through Chapter 7 - Award of
Contracts and Issuance of Standing Offers and Supply Arrangements. Responsibility for the elements of
the contracting phase fall generally to the contracting officer, though client departments have lead
responsibility for some elements (see Annex: Specific Division of Responsibilities Agreements).
f. In general, the level of effort required for contract management will vary depending on the value and
complexity of the procurement. Low dollar value or simple contracts may require only minimum
management, while more complex contracts will require continuous monitoring by both the client and
the contracting officer. A dedicated team of clients and contracting officers may be assigned to large
projects, where roles and responsibilities are defined in more detail.
8.5 Contract Administration

(2017-08-17)
a. Both the client department and Public Works and Government Services Canada (PWGSC) must
administer the contracts. It is important that the client and the contracting officer understand and agree
on who is responsible for managing and administering the various aspects of the contract.
b. Contracting officers responsible for the management of contracts should be aware of any institutional or
personal sanctions. As per section 12.1.3 (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?
evttoo=C&evttoc=C&id=14494&section=text&AspxAutoDetectCookieSupport=1) of the Treasury Board (TB)
Contracting Policy, TB may require that sanctions be imposed on either the department or certain
officials when contracting practices or contract administration is not acceptable.
c. Contracting officers should set up and maintain complete and up to date documentation on every aspect
of the contract, both to provide a record of actions taken and to protect Canada's interests under the
contract. The files will provide an organizational memory of activities and events and should include,
where applicable, but not be limited, to the following:
i. the procurement planning documents;
ii. the requisition and any amendments;
iii. the solicitation documents;
iv. bid evaluation plan and resulting evaluation documents;
v. professional and specialist's advice;
vi. risk identification, assessment and mitigation;
vii. environmental considerations, impacts, and mitigation;
viii. conditions or sanctions imposed by the Vendor Performance Corrective Measure Policy or the
Ineligibility and Suspension Policy;
ix. correspondence with clients;
x. contract conditions;
xi. contract amendments;
xii. work schedule, including milestones and deliverables;
xiii. payment schedules, invoices and payments;
xiv. other correspondence (written and email);
xv. records of phone discussions;
xvi. formal records of meetings, including minutes;
xvii. records of decisions;
xviii. warranties;
xix. management reports, including audit reports, and
xx. contract closeout documents.
d. Additional information on environmental considerations is provided in the Guideline for Integration of

Environmental Performance Considerations in Federal Government Procurement, in section 4. Contract
Management; in section 5. Use, Operation and Maintenance; and in section 6. Disposal.
e. For guidelines on file organization, see Annex 8.1: Guidelines on File Organization and Make-up.
8.10 Administration of Service Contracts

(2010-01-11)
a. Section 16. Service contracts (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=14494&section=text#cha16) of the TB

Contracting Policy sets out the policy for service contracts. Article 16.11.3 (http://www.tbs-sct.gc.ca/pol/doc-
eng.aspx?id=14494&section=text#sec16.11) states the following:
"The contracting authority should appoint a contracting officer and the technical authority should
appoint a project officer (who may be the same person), to be responsible and accountable for
monitoring the work through:
a. regular physical progress and financial reports from the consultant or professional;
b. attending progress meetings with the consultant or professional;
c. examining the work in progress to ensure conformity with contract requirements;
d. monitoring time, resource, cost and quality aspects of the work against a pre-determined and
agreed work plan;
e. amending the contract to reflect new requirements, work schedules and payment provisions in
response to changing circumstances;
f. conducting technical and financial audits;
g. accepting or approving the work at intermediate stages and at completion;
h. certifying all payments and following up to ensure timely payment.
The division of these responsibilities among authorities should be agreed to before placing the contract."
8.15 Contract Performance

(2010-01-11)
a. The management of a contract involves many activities to ensure fulfillment of that contract. Events can
sometimes alter or disrupt the performance of a contract. For example, a contractor may default on
contractual obligations, disputes may arise about contract conditions, or there may be a need to make
amendments to the contract after it has been awarded.
b. Whenever the satisfactory fulfillment of a contract is jeopardized, contracting officers should take the
necessary steps to serve and protect the interests of Canada. Contract disputes should be dealt with
fairly, and as promptly as possible. Contracting officers should keep procurement files complete and up
to date, to provide a record of actions taken.
8.20 Canada's Obligations

(2010-01-11)
In managing a contract, contracting officers must ensure strict adherence to all of Canada's obligations. A
breach of such obligations could nullify a surety bond. Where responsibility lies with a client department, the
contracting officer should ensure the client authority is aware of the obligations.
8.25 Contract Payments

(2010-01-11)
Work performed or goods received under a contract must be paid for in accordance with the government's
policy on the payment of accounts providing for payment within 30 days. The payment period is measured from
the date that the goods or services were received, in acceptable condition, at the location(s) specified in the
contract, or the date that an invoice in proper form was received, whichever is later.
8.30 Progress Payments

(2010-01-11)
a. Progress payments need to be measured against milestones. A project progress monitoring system
should be in place to provide an indication of when the work has been accomplished. Progress payments
must include appropriate documentation that is retained on file.
b. When milestone progress payments are not appropriate, then payments may be made at set times during
the contract period.
8.35 Claims for Progress Payment and Invoicing

(2010-01-11)
a. No payment, other than a progress payment, may be made under a contract unless a person authorized
by the appropriate minister certifies that:
i. the work has been performed;
ii. the goods have been supplied or the services rendered as the case may be; and
iii. the price charged is according to the contract or, if not specified by the contract, is reasonable.
b. When a payment must be made before the completion of the work, delivery of the goods or rendering of
the service, the payment must be in accordance with the contract.
c. Claims for progress payment are normally routed, through the contracting officer, to the client for
verification and authorization of payment. Contracting officers processing payment claims must act
promptly. The standard due date for payment is 30 days, after invoicing or receipt of goods, whichever
is later. Acceptable performance standards should be set by the sectors/regions to allow adequate time
for the certification of the claim by an authorized representative of the client.
d. Claims for progress payment must include the completed form PWGSC-TPSGC 1111 Claim for
Progress Payment (http://www.tpsgc-pwgsc.gc.ca/app-acq/forms/1111-eng.html) , which requires a certification of
contract expenditures.
e. The contractor normally sends invoices directly to the client. A copy must also be sent to the contracting
officer and kept on file.
f. Invoices that include billings for items not received are not considered due until all items are received. If
a contractor wishes payment for a partial shipment, a revised invoice, if permitted by the contract, must
be submitted.
g. Clients are required to notify contractors of any error or missing information in an invoice or supporting
documentation, within 15 days of receipt. Clients should return, within 15 days, any invoice not in
accordance with the terms of the contract, to the contractor for resubmission.
8.40 Exchange Rate Fluctuation Provision

(2013-11-06)
For contracts with an exchange rate fluctuation provision, client departments and contracting authorities must
ensure that this provision is applied during invoicing and payment. Invoices must indicate the adjustment
required and would typically include form PWGSC-TPSGC 450 Claim for Exchange Rate Adjustments
(http://www.tpsgc-pwgsc.gc.ca/app-acq/forms/formulaires-forms-eng.html#f2) showing the adjustment calculations, all in
accordance with the contract terms.
8.45 Interest
(2010-01-11)
a. Simple interest will be paid automatically on any amounts that are overdue, provided that Canada is
responsible for the delay. The general conditions of the SACC Manual reflect this policy. The amount of
interest will be shown separately on the cheque stub or accompanying remittance advice.
b. Interest will be calculated from the day after the due date to the day before the date that the payment is
issued. However, interest will not be paid until the contract payment is made.
c. Interest is calculated according to the following formula:

Interest = Amount owed x ([that date's bank rate + 3%] x [number of days interest payable/365])
d. The provisions for payment of interest on overdue accounts set out in the general conditions must be
strictly adhered to, except in special cases where the client requisition and appropriate provisions in the
contract specifies a payment period longer than 30 days, for example when extensive product
evaluation, inspection or testing requirements are involved.
8.50 Overtime
(2017-11-28)
a. When a contractor performs overtime under a contract, added costs may be incurred by Canada in the
form of overtime premiums. Recognition of the additional cost by Canada depends upon the attendant
circumstances and the cause of the overtime. Work performed under contract to Canada should not
attract higher overtime charges than would apply to similar commercial work.
b. Scheduled overtime premium costs included in a contractor's overhead account and applied to contracts
are allowed, if contracts account for a pro rata share of the overtime.
c. Unscheduled overtime premium costs to specific contracts are allowable only, if the overtime is due to
Public Works and Government Services Canada (PWGSC) or client demands for accelerated delivery,
increased delivery quantities, or other reasons initiated by the client for which benefit to Canada can be
demonstrated.
d. If the need for unscheduled overtime appears likely, the contracting officer should ensure that proper
provisions concerning authorization, rates and dollar limits are included in the contract.
e. The contracting officer should consult with the cost analyst to ascertain whether the contractor's cost
system includes overtime premium costs in the overhead account or as a direct charge to the particular
contract, in accordance with the Guideline on the Use of Cost and Price Analysis Services
f. When deciding to authorize unscheduled overtime, the contracting officer must:
i. consult with the client and jointly determine that authorization and the need of overtime will
result in benefit to Canada;
ii. ensure that funds are available to reimburse the contractor;
iii. determine the aggregate limits of time and costs of the overtime to be authorized;
iv. determine what delegation of authority, if any, should be made to the client representative;
v. ensure that provision for proper claiming and approval of overtime claimed, and overtime
payments to the contractor, is included in the contract, and
vi. ensure that the procurement file includes clear documentation of all elements included in the
decision to authorize overtime.
8.55 Claims for Extra Payment

(2017-08-17)
a. From time to time, contractors submit claims for upward price revision of firm price contracts, based on
changes caused by Canada. A firm price contract may not be amended to provide for upward price
revision, without prior approval of Treasury Board (TB), unless either the contract contains an
escalation clause, covering the adjustment requested or the contract conditions allowed for the
adjustment requested.
b. The advice of Legal Services should be obtained to determine whether a proposed extra payment is
considered an amendment to the contract or an "ex gratia" payment.
c. The approval of TB is required for all extra payment claims, irrespective of the dollar amount. As a
general rule, TB will not approve claims for extra payments arising solely from the following causes:
i. increases in labour or material costs;
ii. changes in freight rates;
iii. revisions in exchange rates;
iv. delays caused by the contractor;
v. errors on the part of the contractor; or
vi. other difficulties that the contractor overlooked, but should have foreseen.
d. TB has granted full authority to deputy heads to make "ex gratia" payments, and to designate officials
within the department to act on their behalf. See TB Directive on Payments (http://www.tbs-sct.gc.ca/pol/doc-
eng.aspx?id=32504) .
8.60 Services of Non-residents - Entry Requirements

(2010-01-11)
a. In the performance of a contract, a contractor may wish to use the services of a non-resident employee
on a temporary basis. The determination of eligibility to enter Canada is the responsibility of
Immigration Canada.
b. United States nationals may apply for employment authorization at the port of entry. All others must
obtain authorization before the point of entry. To obtain the correct documentation and necessary
authorizations, the applicant must contact the nearest Canadian embassy or consulate.
c. Canadian citizens residing outside Canada always have the right to work in Canada.
d. In cases of emergency service requirements, the client department (or Public Works and Government
Services Canada) must provide the contractor with written notice, including details of the emergency. In
some emergencies, this information may be provided by telephone to the appropriate immigration
authorities.
8.65 Assignment of Monies

(2010-01-11)
a. Contracting officers may receive from contractors, banks, other financial institutions, or other sources,
statements or documents showing that persons or companies, other than the contractor, claim to be
entitled to receive monies under a contract with Public Works and Government Services Canada
(PWGSC) or Canadian Commercial Corporation (CCC).
b. Payments to persons other than those named in the contract will only be made in cases of bankruptcy,
the appointment of a receiver-manager, or an assignment of debt pursuant to Part VII of the Financial
Administration Act.
c. This does not include those cases where the contractor owes a debt to Canada for tax arrears where
Canada Revenue Agency has obtained Treasury Board (TB) approval to collect taxes due or has
requested a deduction for taxes due to Canada.
d. If the claim relates to a bankruptcy or insolvency situation, see 8.120 Bankruptcy, Receivership,
Insolvency.
e. The contracting officer, immediately upon receipt of a notice of assignment of money under a contract
with a request to pay the assignee of the Crown debt, should contact the Payment Standards Division, at
819-956-9328 or via e-mail at: dlpsd.lddnp@tpsgc-pwgsc.gc.ca to obtain information on how to process
an assignment of Crown debt.
8.65.1 Receipt and Deposit of Monies

(2013-03-21)
a. When contracting officers receive monies directly from contractors with respect to a particular claim by
Canada, these monies must be sent, in compliance with TB Contracting Instrument "ARCHIVED -
Policy on Deposits (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12166&section=text) ", to the departmental
accounting unit, as soon as possible. A memorandum must accompany the monies, with copies to the
client and the Cost and Profit Assurance Group (CPAG). The memorandum should include:
i. a brief description explaining why monies are being remitted;
ii. the name of the client;
iii. the PWGSC file/contract serial number; and
iv. the name and telephone number of the contracting officer.
b. In the National Capital Region (NCR), the monies are sent to:
Finance Branch
Portage III, 12B1
Gatineau, Quebec K1A 0S5
c. Outside NCR, the recipient is the appropriate PWGSC regional director's office.
d. Reference should be made to section 10.70 Recovery and Disposition of Contract Claims Adjustments
Process.
8.65.5 Release of Contract Financial Security

(2010-01-11)
a. Surety bonds, according to their terms, automatically expire when the contractor has fulfilled all
obligations under the contract. When the contract has been completed, surety bonds must be destroyed.
b. Where a contract, in respect of which a security deposit (government guaranteed bonds, bills of
exchange, irrevocable standby letters of credit) was given, has been completed or terminated through no
fault of the contractor, the security deposit must be returned to the contractor. The contracting officer
must instruct the Finance Branch to requisition a cheque for the amount of a bill of exchange plus
accumulated interest, or to request to arrange the release of bonds, letters of credit and other negotiable
instruments deposited.
8.65.10 Financial Claims by Canada

(2013-03-21)
a. There are two general categories of claims by Canada as a result of contracting activities:
i. overpayments or overclaims, as may occur when reported as a result of audit, and
ii. legal disputes, for example, termination for default, bankruptcy (only when the amount owing is
actually known and final).
Note:Either instance can only be determined when a contract has been completed or terminated.
b. Where monies may be owing to Canada as a result of contracting activity, sectors/regions are to
determine the liability and amount owing with assistance, as necessary, from Legal Services.
c. There are special procedures to be followed whenever there are suggestions of unreasonably high profits
from any contract placed pursuant to the Defence Production Act, or from any contract other than a
competitive firm priced contract. See Annex 8.5: Refunds of Excess Profits Earned on PWGSC
Contracts for details of these procedures.
d. The contracting officer should liaise with the contractor to get concurrence of the final amount owing.
Once that amount has been established, the contracting officer, in accordance with TB Contracting
Policy, must formally advise the client to establish an accounts receivable. The client must advise
PWGSC that this has been done, and take collection action.
e. Many organizations have roles to play relating to these claims by Canada.
i. The contracting officer is responsible to:
A. review the acceptability of contractor claimed amounts;
B. respond to audit observations, as required;
C. liaise with the client department as to concurrence on the final amount, and
D. advise Cost and Profit Assurance Group (CPAG) of all settlements reached.
ii. Audit Services Canada (ASC) provides audit reports on specific contracts.
iii. Legal Services is responsible to:
A. identify the potential risks and liability faced by Canada as a result of claims against the
contractor;
B. inform the contractor, when requested by the contracting officer, of Canada's claim, by way
of a formal legal demand;
C. initiate legal action against the contractor.
iv. Industrial Technologies Office of Industry Canada (IC) is responsible to:
A. follow up on the disposition of all audit qualifications and/or observations raised by ASC,
except for audit issues involving interpretation of the Contract Cost Principles 1031-2,
which are a responsibility of PWGSC; and
B. resolve issues and disputes in the case of joint Canadian Commercial Corporation and
Industry Canada agreements.
f. Reference should be made to section 10.70 Recovery and Disposition of Contract Claims Adjustments
Process.
8.65.15 Financial Security Issues related to Amendments

(2010-01-11)
a. Before authorizing any material changes in contract conditions, contracting officers should ensure that
such changes do not invalidate security obligations by obtaining the consent of the surety company.
"Material changes" means any change to the contract, except a change which on the face of it and
without further explanation or investigation, is clearly for the benefit of the surety. Examples of changes
requiring the surety company's approval are: changes in the contract price; changes in the scope of the
work; revision to the completion and/or delivery dates specified in the contract; and changes in the
payment schedule."
b. When the change must be made via a contract amendment, a copy of the draft amendment should be
sent to the surety company for concurrence. When the contract contains a provision for design or
engineering changes within certain limits, it is not necessary to obtain the surety company's prior
consent. In this case, the company only needs to be kept informed. If the limits must be changed, the
surety company's consent is required.
c. In cases where the contract price is being increased, it may be advisable to increase the amount of
security to reflect the revised contract price. The face amount of a contract support letter of credit may
be increased or reduced commensurate with the change in risk that has occurred. It may be changed by
an amendment to the letter of credit. Alternatively, the letter of credit may contain an express provision
for a change by a specified or determinable amount or amounts on a specified date or dates or upon
presentation of the document(s) specified for this purpose, such as an interim certificate of completion.
Any new letter of credit, if applicable, should be received before the contract is amended.
d. If a security deposit exceeds the amount required due to changes in the contract price, the excess must
be returned to the contractor (see 8.155.1 Refunds of Excess Profits). The face amount of a contract
support letter of credit may be reduced commensurate with the change in risk that has occurred. The
face amount may be changed by an amendment to the letter of credit. Alternatively, the letter of credit
may contain an express provision for change by a specified or determinable amount or amounts on a
specified date or dates or upon presentation of the document(s) specified for this purpose, such as an
interim certificate of completion.
8.70 Contract Administration Considerations

(2010-01-11)

(2013-01-28)
The client department must ensure that the contractor has a valid security clearance for the entire duration of the
contract. When using standing offers or supply arrangements as a method of supply, client departments must
confirm with the Canadian Industrial Security Directorate (CISD) that the required level of security is met prior
to issuing call-ups, and contracts. It is the responsibility of the client department to ensure that every person
accessing the work site(s) has the proper security clearance. The contracting officer must ensure that the
organization security status, at time of contract award, is communicated to the client department. The
contracting officer must also communicate to the client department any changes in security statuses during the
contract period as identified by CISD.
8.70.1.1 Compliance and Enforcement with Industrial Security Requirements

(2013-01-28)
a. In the case of non-compliance with the security requirements during the life of a contract, the Industrial
Security Sector (ISS) has put in place a Policy on Compliance and Enforcement with Industrial Security
Requirements (DP 123) that provides Public Works and Government Services Canada (PWGSC)
with a mechanism to address private sector non-compliance with Government of Canada (GOC)
industrial security requirements and to adopt a progressive and measured approach to handle non-
compliance.
b. ISS will track non-compliance with industrial security requirements on GOC procurement instruments
and update the contracting authority(ies), client department(s) and other parties at select points within
the compliance and enforcement process. In the event of revocation of a security clearance, the
Assistant Deputy Minister of the respective Branch will also be notified so that PWGSC contracting
authorities managing other procurement instruments can be advised.
c. The DP 123 will be applied when non-compliance has been confirmed.
d. There are three levels of gradual enforcement, which will require action from the contracting authority.
i. Level 1: Letter of warning listing corrective measures required by the organization

ISS will inform the contracting authority and client department by providing a copy of the letter
sent to the private sector organization. The contracting authority should start discussion with the
client department as to what actions/option may be available if the contractor does not redress the
non-compliance issues. Legal counsels should also be involved in the discussions. The
organization has 30 calendar days to comply.
The file must be documented accordingly
ii. Level 2: Letter restating corrective measures and advisement of intent to revoke an organization’s
clearances, if not corrected.
Once again, ISS will inform the contracting authority and client department by providing a copy
of the letter sent to the private sector organization. The contracting authority and the client
department should discuss the consequences non-compliance with the security requirements may
have on the contract. Ensure that the legal counsels are involved in discussions. The organization
has 30 calendar days to comply.
The file must be documented accordingly
iii. Level 3: Letter advising of revocation of the security status.

At this time, it is really important for the contracting authority and the client department to do a
risk assessment that would look at different options like:
A. amending the security requirements of the contract at the level met by the contractor. In this
case there is a need to establish measures that will address the portion of the work the
contractor cannot do anymore due to not holding the required security status. Any
amendments need to be discussed with the legal counsel as it may not always be considered
under the Canadian International Trade Tribunal as contract management;
B. terminating the contract for default (refer to 8.135.15 Termination for Default). In this case,
the Vendor Performance Corrective Measures Policy applies. (See 8.180 Vendor
Performance Corrective Measure Policy)
8.70.2 Compliance with the Integrity Provisions

(2016-04-04)
a. As stated in the Ineligibility and Suspension Policy (http://www.tpsgc-pwgsc.gc.ca/ci-if/politique-policy-eng.html)

the contractors, offerors or suppliers must notify the Registrar of ineligibility and suspension (the
Registrar), in writing, within 10 business days, of any criminal charges, convictions or other
circumstances as described in the Policy with respect to themselves, their affiliates and their first tier
subcontractors, as well as any change affecting the list of directors or corporate owners.
b. Where non-compliance with the Integrity Provisions is identified during the period of the contract
(including contracts with task authorizations, standing offers or supply arrangements), the contracting
officer must consider, after weighing the impact on operational requirements and having regard to any
representation made by the contractor, terminating the contract for default, setting aside the standing
offer and terminating any call-ups, or canceling the supply arrangement and terminating any resulting
contracts issued by Public Works and Government Services Canada (PWGSC).
i. If informed by the Registrar that a contractor has been determined ineligible or suspended, the
contracting officer must contact the Acquisitions Program Integrity Secretariat (APIS), by e-mail
at TPSGC.DGAIntegrite-ABIntegrity.PWGSC@tpsgc-pwgsc.gc.ca for assistance.
ii. Where a contract is terminated for default for reasons of non-compliance with the Integrity
Provisions, the contracting officer must provide the contractor with a notice period of no less than
two weeks that the contract is being terminated. During this time, the contractor may make
representations on such matters as maintaining the contract.
iii. A contractor subject to a termination for non-compliance with the Integrity Provisions may be
required to enter into an Administrative Agreement with PWGSC, as an alternative to
termination. Administrative Agreements are negotiated by the Departmental Oversight Branch
(DOB) of PWGSC, and the terms and conditions are within the sole discretion of DOB.
c. For the approval of procurement instruments, contracts, supply arrangements, standing offers, as well as
for contract assignments where the supplier has been determined to be ineligible or suspended, see
section 1.1 Exceptions to Internal Approval Authorities of Annex 6.4.1 Approval Authorities and
Additional Signing Authorities in Support of Clients' Programs Only – Other than for Canadian
Commercial Corporation.
8.70.5 Amending Contracts

(2016-04-04)
a. Contract amendments are used to formally delete, modify, or introduce new conditions to the original
contract. The need for an amendment may arise from continuing negotiations or to deal with an
unforeseen circumstance. When amending a contract, Canada's best interest should be considered.
Amendments are subject to agreement by both parties to the contract. Where the vendor is subject to a
relevant Vendor Performance Corrective Measure Policy (VPCMP), the length of the contract cannot be
extended either by an amendment or through the exercise of an option unless:
i. there is insufficient time to recompete; or
ii. there are other exceptional circumstances.
These situations require ADM approval in accordance with 8.180.25 Exceptions.
b. Contracting officers must carefully analyze the need for an amendment versus the need to issue a new
contract and every effort should be made to avoid:
i. inadequate initial funding, resulting in an amendment to increase the contract value;
ii. inadequate pre-planning, resulting in an amendment to the design, specifications or quantity

involved; and
iii. improper administrative procedures, necessitating an amendment to the specifications and

delivery or other requirement in order to protect the contractor or government agency involved.
c. In addition to the above regarding contract amendment in general, for the purpose of the Vendor
Performance Corrective Measure Policy (VPCMP), a conditional amendment is a specific type of
contract amendment. It is used for operational reasons in lieu of a full or partial termination for default
when there is a performance issue for which the vendor is primarily responsible. When a contracting
officer is ready to terminate or partially terminate for default, a conditional amendment is available as
an alternative to immediate termination. If the vendor refuses the conditional amendment, then the
contract must be terminated for default and no normal amendment can be issued. (See 8.180.10
Definitions for more information on conditional amendments and 8.180.15.1(c) for the paragraph to be
inserted in a conditional amendment. See also 8.135.15 Termination for Default and Annex 8.4
Termination for Default.) As with terminations for default, conditional amendments will trigger a
VPCMP Assessment process under the VPCMP. (See 8.180 Vendor Performance Corrective Measure
Policy.)
d. Integrity Provisions
i. For each amendment to a contract where the Integrity Provisions have been amended, except for
administrative amendments and call-ups against standing offers, contracting officers must follow
the verification process specified in section 5.16 Integrity Compliance. For further details on the
verification process, see sections 5.16 Integrity Compliance and 8.70.2 Compliance with the
Integrity Provisions.
ii. When a significant contract amendment is to be done for an existing contract which does not
contain the most recent Integrity Provisions (e.g. increase to the contract value, to exercise an
option, to extend the contract period, to modify the requirement, or the assignment of a contract),
contracting officers must propose to add or revise the Integrity Provisions of the contract.
Contracting officers may use the Template Letter for Addition of Provisions to an Existing
Contract (see 8.13. Annex: Letter Templates for Integrity).
iii. Where the contractor refuses to make changes to the Integrity Provision or provide the
certification as requested in the Template Letter for Addition of Provisions to an Existing
Contract, best efforts should be made to ensure that the supplier has a clear understanding of the
terms of the new Integrity Provisions. This may include having a manager contact the contractor
directly. Where the contractor still refuses to update the Integrity Provisions, the refusal should
not prevent the continuation of business operations and the contract amendment may proceed. For
assistance, contact the Acquisitions Program Integrity Secretariat (APIS), by e-mail at
e. The amendment format will follow the form of the original contract. The amendment should identify, by
using complete clauses, any changes, additions, conditions or deletions.
f. To reduce administrative costs, contracting officers and client departments should combine as many
individual changes as possible into each amendment. For example, multiple design changes or
deviations can be amended together.
g. Amendments should receive the same distribution as the original contract.
8.70.10 Approval of Contract Amendments

(2014-09-25)
a. Legal services must be consulted on conditional amendments before being considered.
b. With the exception of administrative amendments and pre-approved options, contracting officers are to
complete the Procurement Risk Assessment for Amendments to determine the risks associated with the
proposed amendment and the appropriate approval authority required.
c. For more information on forms of amendment requests and the appropriate approval levels, see Chapter
6 Approvals and Authorities.
8.70.15 Exercising Options

(2011-10-04)
a. Before exercising a contract option, contracting officers must first verify if the option was pre-approved.
If not, the appropriate approval authority must be sought, in accordance with Chapter 6 Approvals and
Authorities, before amending the contract.
b. Before exercising the option, the contacting officer should confirm that the prices for the option are still
fair and reasonable. It may be appropriate to negotiate a lower price when market prices for such goods
or services have dropped significantly since contract award.
8.70.20 Administration of Contracts with Task Authorizations

(2011-05-16)
a. The following paragraphs highlight some considerations regarding the administration of task
authorizations (TAs). (See 3.35.1 Contracts with Task Authorizations for information on issuing and
monitoring contracts with task authorizations.)
b. A detailed and current record of all authorized tasks must be kept for each contract with a task
authorization process. The contractor or the client department is responsible for creating and updating
this record, as established in consultation with the client department during the procurement planning
stage. This record may contain but is not limited to:
For each authorized task:
i. the task number and, as applicable, task revision number(s);
ii. a title or brief description of each authorized task, as applicable;
iii. the total estimated cost specified in the authorized TA of each task, GST or HST extra, as
applicable;
iv. the total amount, GST or HST extra, expended to date against each authorized task (as
applicable);
v. as applicable, when a task is completed, the committed amount should be reduced to reflect the
actual expenditure and the change should be reflected in the record of task authorizations;
vi. the start and completion date for each authorized task, as applicable;
vii. the active status of each authorized task.
For all authorized tasks:
i. the amount (GST or HST extra) specified in the contract (as last amended, as applicable) as
Canada's total liability to the contractor for all authorized TAs; and
ii. the total amount, GST or HST extra, expended to date against all authorized task authorizations.
c. Before authorizing a task, the organization authorized to issue the task to the contractor (normally the
client) must ensure that:
i. the task can be completed on or before the expiry date of the contract with task authorizations. If
it cannot be, the task authorization cannot be issued until after the contracting officer amends the
period of the contract with task authorizations;
ii. the total estimated cost of the TA, GST or HST extra, is within the client’s authority limit relative
to individual task authorizations specified in the contract. (If the total value exceeds that limit, the
TA must be forwarded to PWGSC for authorization and issuance); and
iii. the task authorization will not cause the exceeding of the amount (GST or HST extra) specified in
the contract as Canada’s total liability to the contractor for all authorized TAs.
d. When a task is completed, the committed amount may be reduced to reflect the actual expenditure, and
such changes must be reflected in the record of task authorizations.
e. See 3.35.1.35 Separation of Duties relative to the separation of duties in TAs.
8.70.25 Design Change or Deviation

(2011-10-04)
a. If there is no design change or deviation provision in the contract, the procedure may be instituted only
after an authorization document is received from the client and is incorporated in the contract via an
amendment (see 8.70.10 Approval of Contract Amendments). Adequate funds should be authorized and
set aside for changes. If additional funds are required, a requisition amendment is required.
b. Each design change or deviation request must have technical approval by the technical authority or
project authority and, as specified in the contract, be approved by the contracting officer.
c. Whenever possible, a design change requiring a price adjustment should be negotiated before the
change in work is made.
d. Design changes or deviations can result in upward, downward or nil adjustment to contract costs. After
approval by the client, the contracting officer is responsible for prompt negotiation of price adjustments,
and ensuring that these changes are reflected in the total contract price.
e. The form PWGSC-TPSGC 9038 Design Change/Deviation (http://www.tpsgc-pwgsc.gc.ca/app-acq/forms/9038-

eng.html) , should support deviations and changes.
f. Surplus materiel resulting from an authorized design change or deviation must be accounted for and
reported to the contracting officer.
8.70.25.1 Design Change or Deviation Procedure

(2010-01-11)
The following is an example of a design change or deviation procedure:
a. When it is necessary to depart, either temporarily or permanently, from the governing technical data in a
contract, the technical authority or project authority or the contractor may originate a request for design
change or deviation.
b. The contractor may initiate the design change or deviation process by completing section 1 of form
PWGSC-TPSGC 9038 Design Change/Deviation (http://www.tpsgc-pwgsc.gc.ca/app-acq/forms/9038-eng.html)
including a ceiling price for the change, subject to negotiation, and sending three copies to the technical
authority or project authority and one to the contracting officer. When required, copies of the supporting
technical data should be submitted.
c. A subcontractor must submit the form through the contractor, who will ensure that all the information
required is entered, before submission.
d. The technical authority or project authority, with the sole right to deny approval, will review the design
change or deviation request, and either approves it, and forwards it to the contracting officer, or rejects
it, and returns it to the contractor.
e. The technical authority or project authority may initiate the process by sending five copies of the form
to the contractor. After providing the contractual information required, the contractor will retain one
copy, and send three copies to the technical authority or project authority and one to the contracting
officer.
f. Where equipment or stores affected by the change are being procured under more than one contract, a
separate form is required for each contract, unless the technical authority or project authority has
specifically authorized the use of one form for all contracts held by a single contractor. In all cases, the
form should show all contract references, including the file number and the serial number assigned by
the contracting officer.
g. The contracting officer will:
i. negotiate a firm price, if possible, or another pricing basis that is consistent with the existing basis
of payment in the contract;
ii. provide contractual authority for the design change or deviation; and
iii. sign the form and send a copy to the contractor and the technical authority or project authority.
Upon receipt, the contractor will implement the change.
h. The contractor should direct enquiries regarding the design change or deviation procedure to the
technical authority or project authority. The contracting officer or the technical authority or project
authority will provide blank forms to the contractor, who will provide them to the subcontractors.
8.70.30 Loans of Department of National Defence Materiel

(2010-01-11)
a. When a contract does not provide for the loan of the Department of National Defence (DND) materiel,
the contractor may request such a loan.
b. Such requests should be directed to DND, Director Disposal, Sales, Artifacts and Loans
(DND/DDSAL).
c. Returns must be made:
i. when the materiel is no longer required;
ii. when repairs are beyond the capability of the contractor;
iii. when recalled by DND/ DDSAL, or
iv. on completion of the contract.
d. The contractor must return the materiel, as directed by DND/ DDSAL, and should request from DND/
DDSAL, in writing, instructions for the disposition of the items to be returned. The request should
include a description of the items, identification or NATO stock number, their condition, and the loan
agreement number.
e. DND/ DDSAL will issue disposition instructions, and inform all concerned. The contractor must
arrange for the return of the items as directed and confirm action by returning a signed copy of the
"Notice to Ship" to DND/ DDSAL.
f. At their discretion, the local Canadian Forces Quality Assurance Representative will carry out
inspection on issue and return of DND-loaned materiel.
g. The contractor must report lost, damaged or destroyed DND loaned materiel, in writing, to DND/
DDSAL, which is responsible for coming to a resolution with the contractor.
8.70.35 Return of Special Test Equipment and Special Production Tooling

(2010-01-11)
a. Contractors must provide DND/ DDSAL with at least 60 days written notice before the date when the
production assets will no longer be required. The notice should identify the contract or loan agreement
serial number under which the production assets were held, location of the equipment, a brief but
adequate description of the surplus production assets and the total estimated value, if applicable.
b. A decision to retain production assets for future use should be supported by a cost/benefit analysis,
which provides an estimate of the storage and transportation costs involved, the duration of the storage,
the refurbishing/modification costs that may be required to re-activate the assets, including
installation/set-up charges, if applicable, and the remaining operational use or life of the equipment.
c. DND/ DDSAL will advise the contractor on the most appropriate method of retention and storage of the
assets. DND/ DDSAL will arrange for the transfer of production assets to another contractor, or a
storage facility; or will prepare the appropriate documentation, declaring the items surplus, and forward
it to Crown Assets Distribution Centre.
8.75 Administration of Standing Offers and Supply Arrangements

(2010-01-11)
8.75.1 Reporting for Standing Offers and Supply Arrangements

(2010-01-11)
a. Contracting officers must ensure that the supplier fulfills all reporting requirements in the standing offer
(SO)/supply arrangement (SA), as applicable. Typically, suppliers must report on a quarterly basis on
the call-up/contract activities. Such reports may contain, but are not limited to, the following
information:
i. the standing offer/supply arrangement number;
ii. the supplier name;
iii. the reporting period;
iv. the call-up/contract number for each call-up/contract, including amendments;
v. the client department;
vi. the contracting authority;
vii. the date of the call-up/contract;
viii. the call-up/contract period;
ix. the line items acquired/services provided;
x. the value of the call-up/contract, Goods or Services Tax/Harmonized Sales Tax included, as
applicable.
b. Each standing offer/supply arrangement should clearly describe the reporting requirements for the
supplier, as applicable, and must indicate the timeframe by which each report must be submitted after
the reporting period. For that purpose, contracting officers must insert Standard Acquisition Clauses and
Conditions Manual clauses M7010C in their standing offer and S0010C in their supply arrangement.
c. Reporting Requirements for Client Departments

Contracting officers must ensure that client departments fulfill all reporting requirements as identified
users of the standing offer/supply arrangement, as applicable, in a timely fashion. Client departments
may be required to provide more detailed reports than those required of suppliers and include
information regarding bid solicitation, supplier responses and selection of successful bidder(s). These
reports provide contracting officers with valuable information on the effectiveness of these methods of
supply.
8.75.5 Revisions to Standing Offers

(2010-08-16)
a. Standing offers are not contracts so cannot be amended or assigned.
b. Standing offers typically have a provision that an offeror must provide 30 days written notice of its
intent to withdraw its RFSO. The contracting officer would then issue a "Revision to the Standing Offer
and Call-up Authority", to notify all the identified users and the offeror of the effective date of the
withdrawal. Call-ups received by the offeror before the effective withdrawal date are legally binding and
must be honored.
c. The Contracting Officer can issue a "Revision to the Standing Offer and Call-up Authority" for reasons
such as to extend the RFSO period or update other relevant instructions in the RFSO.
d. An offeror may revise their standing offer within the limits established in the RFSO solicitation process.
The Contracting Officer would then issue a "Revision to the Standing Offer and Call-up Authority" to
reflect the appropriate revisions.
8.75.10 Managing Proportional Basis of Selection

(2010-01-11)
a. When proportional basis of selection is used for selecting the contractor among multiple standing offers,
the contracting officer must ensure that identified users are aware of their obligation to award call-up
activities, in accordance with the predetermined work distributions stated in the SO.
b. The offeror that is furthest under the ideal percentage in relation to work distributed to the other offerors
will be selected for the next call-up. The ideal percentage is stated in the standing offer. A spreadsheet is
an acceptable method to track all call-ups and to maintain a cumulative total for each offeror.
c. For more information on the ranking methodology for multiple standing offers, see 4.10.20.5 Ranking
and Methodology for Multiple Standing Offers.
8.80 Employer-employee Relationship

(2010-01-11)
a. The client department is responsible for ensuring that an employer-employee relationship does not
develop during the performance of the contract.
b. The contracting officer must ensure that descriptions of the work or changes to the work will not result
in an employer-employee relationship. For more information on employer-employee relationships, see
2.55 Employer-Employee Relationships.
8.85 Subcontracting
(2010-01-11)
a. As stated in certain Standard Acquisition Clauses and Conditions(SACC) Manual general conditions
(e.g. 2030) forming part of the contract, a contractor must, in this case, obtain the consent of the
contracting officer before subcontracting, by using form PWGSC-TPSGC 1137 Permission to
Subcontract (PDF Version 121 KB) - (Help on File Formats). In this case, the contractor must certify
that the proposed subcontract is subject to all of the same conditions as contained in the contract. The
contracting officer will only consent if satisfied with the subcontractor and the proposed subcontract.
b. Any deviations are entirely at the risk of the contractor.
c. The award of a subcontract does not relieve the contractor of any contractual obligations, or impose any
liability upon Canada in relation to the subcontractor.
8.90 Assignment of contracts

(2017-08-17)
a. Under the Standard Acquisition Clauses and Conditions (SACC) Manual general conditions, the written
permission of Public Works and Government Services Canada (PWGSC) is required before any contract
assignment.
b. When the contract contains security requirements, the contracting officer, with the assistance of the
Canadian Industrial Security Directorate, must ensure that the assignee meets all security requirements
specified in the contract.
c. In order to comply with the Integrity Provisions, the proposed assignee needs to provide a signed
certification (see Annex 8.13 Letter Templates for Integrity) and, if applicable, a list of names of
directors, or, for privately owned corporations, the names of the owners of the corporation. The
contracting officer must then proceed to verify compliance to the Integrity Provisions as further detailed
in section 5.16 Integrity Compliance.
d. If the assignee, or its affiliates, is found to be ineligible or suspended under the Ineligibility and
Suspension Policy (http://www.tpsgc-pwgsc.gc.ca/ci-if/politique-policy-eng.html) , the contracting officer may
refuse the assignment or request a Public Interest Exception to the Assistant Deputy Minister of
Acquisitions Branch for the contract of the proposed assignee. See section 4.21 Integrity Provisions for
details on procurements where the supplier is ineligible or suspended.
e. All proposed assignments supported by a contracting officer must be referred to a cost analyst for
review, and then, to Legal Services for drafting of the necessary legal documents.
f. When a contractor assigns a contract, the responsibility for all or part of the performance is transferred
to a third party. However, the assignment of a contract must not relieve the original contractor of any
obligations under the contract or impose any additional liability on Canada, in relation to the assignee.
g. In order to protect Canada's interest, the transfer of the liabilities and rights of the contract from the
original contractor under the original contract to the assignee, will be done so that the original contractor
is ultimately liable for the performance of the contract. An acceptable manner of protecting Canada's
interest is to obtain the original contractor's guarantee of performance in the event that the assignee fails
to perform.
h. The contracting officer will forward the assignment agreement to the appropriate PWGSC signing
authority, with the reasons for the assignment, the number and value of contracts involved, and the
financial condition of the assignee.
i. In the case of Canadian Commercial Corporation (CCC) contracts, a copy of the approved assignment
should be forwarded to the Cost and Profit Assurance Group (CPAG), in order to maintain data on
supplier financial status, or to the appropriate vice-president of the CCC.
8.95 Financial Security and Contractor Difficulties

(2010-01-11)
If the contract contains financial security, and the contracting officer becomes aware that a contractor may have
difficulty in successfully completing the contract, then the surety company should be informed immediately.
8.100 Bonding Companies

(2010-01-11)
Whenever a bonding company has failed to honour its undertakings, the matter must be referred to Legal
Services for appropriate action, and to the Corporate Secretary who must notify Treasury Board (TB).
8.105 Protecting Canada's goods

(2017-11-28)
a. If a contractor is delinquent in discharging its accrued liabilities, subcontractors or suppliers may attach
liens to goods that Canada has taken title to through full or partial payment. Steps should be taken to
protect Canada's interests.
b. This is not required for service contracts, and is generally not cost effective for goods contracts under
$25,000.
c. Where a contractor has given security under section 427 of the Bank Act, a waiver must be obtained for
the bank's priority over Canada's title to the goods. The contracting officer must consult with Legal
Services.
d. If the contractor should change bank, and a new waiver is not obtained, or if the contractor fails to
disclose that security was given, Canada's title could be affected.
e. To protect Canada's interest with potentially insolvent or bankrupt contractors, the contracting officer
must obtain a waiver when a bank or other financial institution has a prior lien on the contractor's assets.
If the waiver is unobtainable, consult with Legal Services, the cost analyst, and Cost and Profit
Assurance Group (CPAG), to determine if the contractor's credit position warrants relieving the
contractor of the contractual obligation relating to bank liens.
f. To preclude the attachment of liens, the contracting officer should check that the contractor has met
payment obligations under the contract to its workmen, subcontractors and suppliers.
g. The contracting officer should promptly review all indications of unpaid invoices or wages or
unreasonable delays in the payment; and carry out a cost analysis, if appropriate, in cooperation with a
cost analyst, in accordance with the Guideline on the Use of Cost and Price Analysis Services
h. The frequency, scope and extent of checks will be determined and carried out by the contracting officer,
based on cost/benefit, and the contractor's payment record, credit rating and financial strength.
i. When the financial analysis indicates potentially serious financial problems, a report should be sent to
CPAG, who will distribute copies to all procurement sectors/regions. The sectors/regions in turn should
compile lists of all open contracts with the contractor involved, including the contract values and
anticipated completions dates and return these lists to CPAG.
j. CPAG will then determine whether a discretionary verification should be carried out, and what would be
the scope and extent of the verification.
Sectors/regions should only enter into new contracts with the contractor with due caution and proper
justification.
k. A discretionary verification is carried out by qualified personnel and approved by CPAG. Discretionary
verifications may be commissioned only by CPAG, and will be performed on a timely and prompt basis,
so as to lessen potential risks to Canada.
l. If the total risk exposure is $2,000,000 or over, a discretionary verification will normally be undertaken.
A determination will be made, as to the protection provided to Canada by any security deposits
(government guaranteed bonds, bills of exchange, irrevocable standby letters of credit), performance
bonds, labour and material payments bonds, or registration action taken or intended.
m. If the total risk exposure is under $2,000,000, CPAG will, in consultation with the sector/region
involved, determine the need to commission a discretionary verification, after taking into account any
financial security provision or registration action.
n. When the verification points to a breach of the contractor's specific contractual obligation to effect
prompt payment to its workmen, subcontractors, or suppliers, CPAG will provide written advice to the
sectors/regions and senior financial officers of the client(s) holding the contracts in default.
8.110 Registering Notice of Interest in Goods

(2010-01-11)
a. In provinces other than Quebec, Canada can register notice of its interest in the goods with a view to
protecting itself against the risk of liens. The registration requirements differ for each province. The
contracting officer must consult with Legal Services.
b. In practical terms, because of the complexities involved, this action is appropriate only on high dollar
value contracts.
8.120 Bankruptcy, Receivership, Insolvency

(2013-03-21)
a. The contracting officer must consult Legal Services when:
i. a contractor proposes a settlement while in an impending or actual receivership, bankruptcy or

insolvency condition;
ii. the contract is secured by surety bond guarantees or other securities; or
iii. a contractor has given security to a bank under section 427 of the Bank Act.
b. Upon receipt of a bankruptcy, receivership or insolvency notice or when there is an indication of such,
the contracting officer must:
i. inform the relevant director;
ii. develop a plan, in consultation with the client, for completion of the work; and
iii. advise Cost and Profit Assurance Group (CPAG) and Legal Services.
c. When a contractor is in formal bankruptcy, the contracting officer must, in consultation with Legal
Services, pursue the rights of Canada, including:
i. realizing on any contractual securities;
ii. proving title to any Canada property in the contractor's possession;

iii. ensuring payment, if Canada is unsecured, in priority of other unsecured creditors; or
iv. offsetting money payable to the contractor against any amount due to Canada.
d. After formal bankruptcy or receivership, monies due to the contractor must be sent to the trustee in
bankruptcy or the receiver-manager, as applicable.
8.125 Goods or Services not in accordance with the Contract

(2010-01-11)
It is the responsibility of the client to inform the contractor, as specified in the contract, if the goods or services
are not in accordance with the contract. Failure to do so may prejudice any subsequent claims by Canada.
8.130 Timely Performance

(2010-01-11)
a. Under SACC Manual general conditions, time is of the essence of the contract. If a contractor fails to
deliver the goods or perform the services on time, the contracting officer should ascertain, in
consultation with the client and Legal Services, the facts surrounding the delay. If the delay was caused
by factors beyond the control and without the fault or negligence of the contractor, the contracting
officer should extend the time of performance of the contract for a period equal to the length of the
delay. Excusable delays are detailed in general conditions. In all other circumstances, the contractor is
responsible for the delivery default. If the contractor is in default in carrying out the delivery
commitments, the contracting officer may, upon giving notice in writing to the contractor, terminate the
contract fully or partially.
b. Where the time of delivery is to be extended due to delays beyond the control of the contractor, and if
the contract is secured by surety bonds, the contracting officer must:
i. advise the surety company and obtain its concurrence before the completion dates specified in the
contract are actually extended; and
ii. advise the surety company and obtain its concurrence before adjusting the contract price, due to
additional work requirements, if applicable.
8.135 Terminations
(2010-01-11)
To determine which type of termination might be involved, see 8.135.5 Termination for Convenience of
Canada, 8.135.15 Termination for Default and 8.135.20 Termination by Mutual Consent. For termination
clauses, see subsection 5-J of the Standard Acquisition Clauses and Conditions (SACC) Manual.
8.135.1 Suspension of the Work - Stop Work Order

(2010-01-11)
When a client wishes to suspend the work under a contract rather than cancel it, SACC Manual clause J0500C
or J0502C should be used. The suspension of the work allows the client to obtain a review of the contract status
before deciding the type and extent of termination (including a termination for default). If a client wishes to
reinstate a contract after a stop work order has been issued, the stop work order must be cancelled (see clause
J0501C). In this event, it may be necessary to adjust the delivery terms and/or contract price. It is the
responsibility of the contracting officer to determine the reasonableness of all claims for additional costs that the
contractor may make. Amendments to cover payment of such costs must be approved in accordance with the
contract amendment approval and signing authorities. (See Annex 8.3: Termination for Convenience Process for
a detailed description of the termination for convenience process.)
8.135.5 Termination for Convenience of Canada

(2010-01-11)
a. Occasionally, Canada may terminate a contract for convenience in accordance with the termination for
convenience provision of the general conditions applicable to the contract. See Annex 8.3: Termination
for Convenience Process for a detailed description of the termination process. This may be due to
curtailment of funds, discontinuation of a government program, or other circumstances, which make the
procurement of the good or service unnecessary. To protect the integrity of the bid solicitation process,
Canada may also terminate a contract for convenience, if it is determined that it has been mistakenly
awarded to other than the lowest-responsive bidder. Clauses related to the termination for convenience
notices are in subsection 5-J of the SACC Manual (see clauses J0001C, J0002C, J0003C, J0006C).
b. Termination for convenience applies when:
i. the client has requested termination;
ii. a termination for default cannot be considered because the contractor is not in default; and
iii. a termination by mutual consent would not be more advantageous to Canada.
8.135.10 Involvement of the Termination Claims Officer

(2017-09-21)
The Termination Claims Officer (TCO), Policy, Risk, Integrity and Strategic Management Sector (PRISMS),
should be involved immediately in the claim settlement process resulting from contracts that are partially or
completely terminated for convenience. Accordingly, the contracting officer should contact the TCO, as soon as
the notice of termination for convenience (see SACC Manual clauses J0001C, J0002C, J0003C, J0006C) is
issued, and should provide the TCO with a copy of the notice. The email address of the TCO is TPSGC.parrc-
aptfc.PWGSC@tpsgc-pwgsc.gc.ca.
8.135.15 Termination for Default

(2010-01-11)
Termination for default applies when the contractor is in default in carrying out any of the obligations under the
contract, usually through non-performance or delayed delivery. The section "Default by the Contractor" in the
SACC Manual general conditions provides the basis for termination for default. For more information on
termination for default, see Annex 8.4: Termination for Default.
8.135.20 Termination by Mutual Consent

(2010-01-11)
a. On rare occasions both parties may agree to termination without claims or penalties, usually where the
client has requested full or partial termination of a contract, the contractor has incurred minor or no
expenses and is willing to forego a claim, and the matter may be settled at no cost to Canada.
b. Termination by mutual consent does not apply when it is in Canada's interest to issue a termination for
default or when the contractor claims additional costs following the reduction or cancellation of all or a
portion of the contract.
c. On receiving the client's request for termination by mutual consent, the contracting officer should
request the contractor to confirm that no claim is involved, and should refer the matter to Legal Services
in accordance with 8.135.1 Suspension of the Work - Stop Work Order.
d. Since no claim is made, the TCO is not involved in this process.
8.135.25 Request for Termination by the Contractor

(2010-01-11)
When a contractor requests a termination because of anticipated losses in performing the contract, consent will
not be granted. Instead, the contractor should be instructed to carry out its obligations under the contract. The
contractor may, on completion of the contract, request an "extra payment" for additional costs incurred or losses
suffered, if some responsibility for the additional cost or for the loss can be ascribed to Canada. (See 8.135.1
Suspension of the Work - Stop Work Order).
If the contractor refuses to carry out the contractual obligations, the contract must be terminated for default.
8.135.30 Financial Security Issues Related to Terminations

(2010-01-11)
a. If the contract is secured by a security deposit (government guaranteed bonds, bills of exchange,
irrevocable standby letters of credit), it should not be terminated without the prior advice of Legal
Services.
b. If the contract is secured by surety bonds, it must not be terminated as this would also terminate the
existing contractual relationship with the bonding company. When a contractor fails to perform a
contract, or when a claim is received for non-payment of labour or material, and a payment bond is in
place, contracting officers must immediately inform the surety company in writing, requesting that
corrective action be taken. Contracting officers must not enter into negotiations with the contractor or
claimant.
8.135.35 Involvement of Legal Services in Cases of Termination

(2010-01-11)
a. The following terminations must not be issued without a written legal opinion:
i. all terminations for default;
ii. terminations by mutual consent, and
iii. terminations for convenience.
b. In seeking the opinion of Legal Services, the contracting officer should submit the procurement file with
a chronological index of the documents forming the basis for the termination request, together with a
short note outlining the events leading to termination. Based on this information, Legal Services will
render an opinion and advise as to the appropriate method of termination.
8.135.40 Adjustment to Source Lists

(2010-01-11)
Terminations for convenience by Canada should not result in any adjustment of the source lists, while
terminations by mutual consent may require correction of source lists. Terminations for default are usually the
cause for the deletion or suspension of the contractor from the source list.
8.135.45 Public Works and Government Services Canada Offices Outside Canada
(2010-01-11)
Termination procedures for contracts awarded by Public Works and Government Services Canada (PWGSC)
offices outside Canada may differ from those for contracts issued in Canada; therefore, the termination
procedures serve only as a general guide.
8.135.50 Approval Authority

(2014-11-27)
Stop work orders and notices of termination must be approved and signed by a contracting officer in accordance
with the Procurement Risk Assessment for Amendments (PRAA). The total contract value at the time of the
termination is used in the value question of the PRAA.
8.140 Disputes
(2017-04-27)
a. When managing a contract, disputes may arise between parties to the contract. Disputes must be
handled expeditiously. All parties must meet their contractual obligations. Proper record keeping is vital
for clarification, audit or termination purposes.
b. If a contracting officer is unable to resolve a contract dispute, the matter should be brought to the
attention of the contracting officer's immediate supervisor.
c. Consultation with Legal Services is recommended to ensure the protection of the interests of Canada.
Consultation with the Business Dispute Management (BDM) Program, Departmental Oversight Branch
(DOB), is recommended to prevent or limit unnecessary escalation and to create conditions for early
resolution.
d. When any business dispute associated with a contract (i.e. construction, acquisition, letting, leasing and
disposal of real property) cannot be resolved through discussion, the contracting officer should
immediately advise the contractor, in writing, of the Alternative Dispute Resolution (ADR) services
available in the BDM Program.
e. Any questions concerning the BDM Program or any of its services should immediately be referred to
the Manager, Business Dispute Management Program by email at the following address:
GestionConflit.ConflictManagement@tpsgc-pwgsc.gc.ca.
8.140.1 Contract dispute resolution

(2017-04-27)
a. All enquiries, from contractors or contracting officers concerning the options for dispute resolution
should be addressed to the Manager of the Business Dispute Management (BDM) Program,
Departmental Oversight Branch, by email at the following address:
GestionConflit.ConflictManagement@tpsgc-pwgsc.gc.ca.
b. The BDM Program provides coordination, prevention and Alternative Dispute Resolution (ADR)
services upon request to support the management of business disputes with third parties, other
government departments and PWGSC employees to facilitate timely and appropriate action. ADR
services provided through the BDM Program include consultation, facilitated discussions, mediation
and arbitration.
c. Prevention and Mitigation
i. When a conflict does arise, the contracting officer must make every effort to resolve the dispute
with the contractor as soon as possible.
ii. If the contracting officer and contractor do not resolve some or all of the issues in dispute, they
should then attempt to resolve the dispute as soon as possible through the involvement of a senior
level contracting authority or a senior project authority.
d. Conflict Intervention
i. If involving a senior level contracting authority or a senior project authority (as stated in c. ii.)
does not resolve some or all of the issues in dispute, the contracting authority should immediately
advise the contractor, in writing, of the ADR services available through the BDM Program,
Departmental Oversight Branch. The contracting authority can also enlist the assistance of the
BDM Program.
ii. Any party to a PWGSC contract can approach the BDM Program and request assistance in
managing a business dispute.
iii. If an ADR service is requested, the BDM Program will inform the other parties of the request and
determine their interest in such process. If the parties are interested, the ADR process will be
initiated.
iv. If an ADR process does not resolve the dispute, the parties’ rights are not compromised.
8.145 Contract Settlement Board

(2012-07-16)
This section of the Supply Manual has been removed. The dispute process is replaced as per section 8.140
Disputes.
8.145.1 Contract Settlement Board - Procedures

(2012-07-16)
Disputes.
8.145.5 Contract Settlement Board - Meetings

(2012-07-16)
Disputes.
8.145.10 Contract Settlement Board - Settlement Offer

(2012-07-16)
Disputes.
8.145.15 Contract Settlement Board - Non-acceptance of Settlement

(2012-07-16)
Disputes.
8.150 Contract Dispute Advisory Board

(2012-07-16)
Disputes.
8.150.1 Contract Dispute Advisory Board - Procedures

(2012-07-16)
Disputes.
8.150.5 Contract Dispute Advisory Board - Non-acceptance of Settlement

(2012-07-16)
Disputes.
8.155 Final Payments

(2012-01-18)
a. The total time charged under a fixed rate contract should be verified for acceptability and accuracy of
recording before the final claim is processed for payment. The findings of such verifications will be
noted on the procurement file.
b. The contracting officer, or other qualified personnel designated by the sector/region concerned, should
carry out the verification of time for acceptability.
c. Verification of time for accuracy of recording should be carried out by qualified personnel from the
financial division or section in the directorate concerned, or other suitably qualified personnel with the
prior approval of the director who is also responsible for setting the standards of verification for the
accuracy of recording.
8.155.1 Refunds of Excess Profits

(2010-01-11)
As the result of an audit, or for various other reasons, it may be determined that a contractor has realized
unreasonably high profits from a contract. On such occasion, a contractor may need to return excess profits to
the department. The special procedures for dealing with these situations are in Annex 8.5: Refunds of Excess
Profits Earned on Public Works and Government Services Canada Contracts.
8.160 Cost Submissions Standards for Cost Reimbursable Contracts

(2010-01-11)
a. The contractor will be paid, in accordance with the contract, the cost reasonably and properly incurred
in the performance of the work. Upon completion of the work, on all cost reimbursable contracts
meeting the cost threshold, the contracting officer must place on the procurement file a certification to
the effect that the final amount paid represents a reasonable price. This certification should be based on
the findings of a cost audit, if one was done.
b. The agreed final price, after all reconciliations, is then formalized in a contract amendment, generally
referred to as "finalization of cost amendment", which adjusts the total contract price to reflect the final
price. This amendment should also state that further claims cannot be submitted.
c. The audit provision in contracts valued over $50,000 with Canadian contractors allows for the
determination of the actual costs incurred, to determine the final contract cost of cost reimbursable
contracts and the reasonableness of the price.
d. All cost reimbursable contracts require a cost submission upon the completion of the contract. All multi-
year cost reimbursable contracts, except for repair and overhaul (R&O) services, will include a
provision for an annual cost submission, as a mandatory deliverable item.
NOTE: For R&O service contracts, an annual cost submission is at the contracting officer and the audit agency's
discretion.
8.165 Cost Audit

(2013-03-21)
a. The selection of cost reimbursable contracts for audit will be made by the contracting officer after
consultation with the Cost and Profit Assurance Group (CPAG) within the Policy, Risk, Integrity and
Strategic Management Sector, in accordance with the following:
i. all contracts associated with Major Crown Projects (MCPs); and
ii. if risks of significant overpayment are apparent.
b. For those contracts selected for audit, the sectors/regions will supply to CPAG a copy of the contract
document, along with copies of all cost submissions received.
c. A copy of the audit report will be forwarded to the contracting officer, along with an audit notification
form prepared by CPAG detailing overpayments and/or comments requiring approval.
d. The contracting officer will establish a final price with the contractor based on the audit findings. Every
effort will be made to do this within 90 days of the audit report being received. The contracting officer
will notify CPAG of the terms of the settlement and resolution of all audit issues raised in the contract
audit.
e. When the contractor has agreed to the final price, the contracting officer must certify that the price
charged is reasonable and in accordance with the contract.
f. Reference should be made to section 10.70 Recovery and Disposition of Contract Claims Adjustments
Process.
8.175 Contract End and Contract Close Out

(2014-11-27)
a. It is the contracting officer’s responsibility to ensure that all contract activities are completed in order to
consider the contract closed out.
b. A contract is considered to be fully completed when:
i. the required deliverables have been received in accordance with the contract; and
ii. the client has accepted the deliverables and the invoice has been paid in accordance with the
contract price and basis of payment; and
iii. there are no outstanding work deficiencies, changes, payments or claims that require formal
release action.
c. Contracting officers should ensure the administrative closure of the file has been carried out in
accordance with established procedures (e.g. reporting, return of Government Furnished
Equipment/Government Supplied Material disposal of surplus material and assets etc.).
d. Contracting officers should ensure that the procurement file is properly documented and archived in
accordance with established Public Works and Government Services records management procedures.
e. Best Practices:
i. Wherever possible, files/contracts with warranty periods should be retained and warranty periods
noted, until the warranty has expired or until any warranty claims are resolved.
ii. Where a contract created Intellectual Property (IP) for Canada or associated rights, the related
documentation should be kept until such time as the Government of Canada no longer has need of
the IP. The contract may need to be kept indefinitely.
iii. Contract files with any outstanding legal or operational issues or requirements related to oversight
(e.g. audits) should not be archived until such time as the issues are resolved.
8.180 Vendor Performance Corrective Measure Policy

(2011-06-29)
8.180.1 Vendor Performance Corrective Measure Policy - Introduction

(2015-09-24)
a. The purpose of the Vendor Performance Corrective Measure Policy (VPCMP) is to assist the PWGSC
procurement community in mitigating procurement risk for future contracts and improving client
service. There are a number of tools to meet this purpose. The VPCMP is just one of those tools. Other
tools include the Code of Conduct for Procurement (http://www.tpsgc-pwgsc.gc.ca/app-acq/cndt-cndct/index-
eng.html) and the Standard Acquisition Clauses and Conditions (SACC) Manual. Collectively these tools
provide a foundation on which the relationship with vendors is established.
b. The VPCMP is in effect as of November 4, 2010. However, the VPCMP was implemented on an
extended trial basis with no consequences for vendors from November 4, 2010 to June 28,
2011 inclusive. There will be no consequences resulting from terminations for default and/or conditional
amendments that fall within the scope of the VPCMP and that occurred during that period. Otherwise,
the provisions of the applicable previous version remain in effect for transactions issued prior to
November 4, 2010.
c. Vendor performance issues are an important component of procurement risk management. As shown in
the Process Chart on the Risk Management Approach to Vendor Performance (See Annex 8.6), those
issues have to be considered at all four phases of the contract management process.
d. The VPCMP applies to PWGSC Acquisitions Branch as a common service provider for transactions
under its authority. The scope of the VPCMP on such transactions is clarified below. The VPCMP
focuses on using a vendor’s performance information from closed contracts for:
i. Rejection of offers for competitive and non-competitive procurements:

Bids/offers/arrangements received from vendors subject to a Vendor Performance Corrective
Measure (VPCM) will not be considered for evaluation if the terms of the VPCM are relevant to
that procurement. Specifically, with respect to vendors with a VPCM, the following applies:
A. no negotiation is to be initiated and no offer is to be accepted for a sole source contract;
B. bids on competitive procurements of goods or services are to be rejected;
C. offers for standing offers for goods or services are to be rejected; and
D. arrangements for supply arrangements for goods or services are to be rejected as well as
bids for contracts under supply arrangements where PWGSC Acquisitions Branch is the
contract authority.
ii. VPCM Assessment: Terminations and/or partial terminations for default and/or conditional
amendments on the following transactions trigger a VPCM assessment at the end of the contract
or at the expiry date of the standing offer:
A. sole source contracts awarded on or after November 4, 2010;
B. contracts awarded pursuant to competitive solicitations (other than (ii)(C) and (ii) (D)
below) issued on or after November 4, 2010;
C. call-ups under standing offers awarded pursuant to a Request for Standing Offers issued on
or after November 4, 2010; and
D. contracts under supply arrangements awarded pursuant to a Request for Supply

Arrangements issued on or after November 4, 2010 where PWGSC Acquisitions Branch is
the contract authority.
However, for the above transactions, no consequences against vendors under the VPCMP will be
enforced for terminations for default and/or conditional amendments that occurred from
November 4, 2010 to June 28, 2011 inclusive.
e. In addition, a relevant VPCM entails the following effects on procurement:
i. A VPCM does not affect existing contracts.
ii. Where the vendor is subject to a relevant VPCM, the length of the contract cannot be extended
either by an amendment or through the exercise of an option unless:
A. there is insufficient time to recompete; or
B. there are other exceptional circumstances.
These situations require ADM approval in accordance with 8.180.25 on exceptions.
iii. No call-up can be issued against any existing standing offer.
f. In addition, the general information on the nature and extent of performance problems gained during the
contract and post contract phases should be used in the other phases. In the pre-contractual phase this
information will assist in the development of the procurement risk strategy. During that phase it will
also assist with assessing the need for a customized or tailored program for managing vendor
performance on specific commodity or commodity groupings. This information is also important in
developing not only performance criteria but also any other risk mitigation terms for both solicitation
and contract documents in the contracting phase.
8.180.5 Principles
(2011-06-29)
a. PWGSC has the authority and the duty to take reasonable measures to ensure that it can rely on its
vendors to perform their obligations. It has the same right as other purchasers in the market to assess a
vendor's performance, and may take action to prevent future problems, based on the vendor's past
performance. The discretion to take such action will be taken in a fair and reasonable manner.
b. The VPCMP is founded on principles that support PWGSC’s commitment to carrying out contracting in
a manner that enhances competition, fairness and transparency.
c. Any corrective measure taken should rationally relate to the nature and severity of the problem for
which it is applied.
8.180.10 Definitions
(2016-01-28)
For the purpose of the generic process in this policy, the following terms or expressions have the following
meaning:
a. Conditional amendment: refers to an amendment to a contract being made for operational reasons in
lieu of a termination for default or a partial termination for default because of poor performance. This
type of amendment may only be considered when the contracting officer is ready to terminate (full or
partial) for default. It is an alternative to immediate termination for default. If not accepted by the
vendor, the termination for default will be issued.
b. Poor performance: means anything less than full performance of a contract by a vendor that results in
either a termination for default or a conditional amendment. In both situations the vendor is primarily
responsible for the poor performance. This definition extends to all aspects of performance that the
contracting officer and the client want to consider and specify for evaluating the vendor's performance
during the contract. (Terminations for default also include partial terminations for default.)
c. Vendor Performance Corrective Measure (VPCM): is a condition or limitation placed on a vendor's

ability to contract with Public Works and Government Services Canada (PWGSC) in the future on the
basis of PWGSC's assessment of the vendor’s past performance. The VPCM affects the vendor’s
eligibility for consideration for award of contracts and issuance of contract amendments.
d. Expiry date of the standing offer: means the date upon which the standing offer has ended or the date
the standing offer is permanently set-aside, whichever occurs first.
e. Vendor Information Management System (VIM): is a database available to the users of the
Automated Buyer Environment (ABE). It stores vendor information including VPCMP notes and
VPCMs.
8.180.15 Generic Process

(2011-06-29)
8.180.15.1 Contract administration concerning the Vendor Performance Corrective

Measure Policy
(2016-01-28)
a. Contracting officers must enforce the terms of contracts. A performance issue may lead to the
following:
i. enforcement of the remedies available under the contract;
ii. a note placed in the Vendor Information Management (VIM) System; and
iii. a Vendor Performance Corrective Measure (VPCM) Assessment.
b. The contracting officer will document the following in the contract file:
i. vendor performance issues, i.e., non-compliance with the performance criteria specified in the
contract;
ii. proof of communication with the vendors on the issues; and
iii. proof of having sent a copy of the VPCMP to the vendor as part of the above communication.
c. When a contract is terminated for default or when a conditional amendment is issued, the vendor is to be
notified in writing of the performance issue(s) and a copy of the notification must be kept in the contract
file. The contracting officer must include the following applicable text in the notification:
i. For conditional amendments:

"The parties agree to this amendment on condition that Canada has the right to consider the poor
performance, which has led to this conditional amendment, for the purpose of assessing whether a
VPCM will be placed against the vendor. The parties agree that this conditional amendment will
result in a note in VIM and will trigger a VPCM assessment process at the end of the contract or
at the expiry date of the standing offer."
ii. For terminations for default, see SACC Manual clauses J1000C and J1001C for the text that
must be inserted.
d. The procedures on terminations for default are set out in section 8.135.15 Termination for Default and
Annex 8.4 Termination for Default. For conditional amendments see section 8.70.5 Amending
Contracts. Legal Services are to be consulted for both actions.
e. A contract terminated for default or for which there was a conditional amendment issued triggers a
mandatory assessment to determine whether a VPCM is to be applied. The contracting officer will
follow the generic process set out in 8.180.15.5 Vendor Performance Corrective Measure Assessment.
f. As soon as the VPCM co-ordinator is made aware of the default event, a letter of reminder will be sent
to the contracting officer by email, outlining the initial steps in the assessment process.
g. Timeliness in the Tracking, Recording and Follow-Up of Corrective Measures
i. The contracting officer must complete Part I of form 149 and return it to the VPCM co-ordinator
at CoordPMCRF.VPCMPCoord@tpsgc-pwgsc.gc.ca within five business days of receipt of the
letter of reminder.
ii. A verification of the VPCM database will then be done to determine the vendor’s VPCM history
and whether there is an ongoing assessment involving the same vendor.
iii. If there is an ongoing assessment for another contract, the contracting officer will be informed by
email that the authorization for assessment of the new case will be put on hold until the previous
assessment is completed.
iv. If there is no ongoing assessment for the same vendor, the contracting officer will receive the
authorization to proceed with the assessment. This authorization will include the history of default
events already registered in the VPCM database for that vendor.
v. The assessment is to be completed (including all required signatures) within three months from
the date of authorization.
h. A note in VIM for a contract or a standing offer that was terminated for default or for which there was a
conditional amendment issued will remain for six years from the date of the termination for default or
conditional amendment. After six years, the note will be removed from VIM. The note may be removed
sooner if the termination or conditional amendment was part of the history which contributed to the
imposition of a VPCM.
i. In addition to the above, PWGSC reserves the right to put a note in VIM, called "Other Performance
Records", for other significant issues pertaining to the performance of a contract. Other Performance
Records require Assistant Deputy Minister, Acquisitions Branch (ADM/AB) approval to be added to
VIM. The provisions of the generic process described in section 8.180.15.5 do not apply in such cases.
While such notes may result in the application of a VPCM, they are not considered for the purpose of
the generic process.
j. For information on the VPCMP and its application, please contact the VPCM co-ordinator by sending
an e-mail to CoordPMCRF.VPCMPCoord@tpsgc-pwgsc.gc.ca. Questions related to the Vendor
Performance Policy promulgated in 1996 can also be addressed to the VPCM co-ordinator.
8.180.15.5 Vendor Performance Corrective Measure Assessment

(2012-10-25)
a. Formal corrective measures are put in place when there is evidence that continued contracting with a
vendor may pose a greater risk to Canada than is acceptable. This will be the case when there is a major
instance of poor performance of a contract resulting in a termination for default or conditional
amendment, or a cumulative record of terminations for default and/or conditional amendments.
b. All steps of the VPCM Assessment process set out below must be fully documented in the file. See
Annex 8.6.1 Required Procedure for Applying a Vendor Performance Corrective Measure (VPCM) for
additional guidance on the required procedure for applying a VPCM using the generic process.
c. As soon as the contract ends or as soon as the standing offer expires where there has been a termination
for default and/or conditional amendment, the contracting officer on behalf of the director will complete
the VPCM Assessment form PWGSC-TPSGC 149-1 (PDF Version 72 KB) - (Help on File Formats)
by:
i. taking into account the relative importance of the requirement(s) in the overall context;
ii. including VPCM history without considering the notes used as the basis for applying a previous
VPCM; and
iii. establishing the ensuing consequence pursuant to the VPCM consequence grid in the form.
The principal elements of the form are set out in Annex 8.7 Principal Elements of the Vendor
Performance Corrective Measure Assessment.
d. In the case of a joint venture, a VPCM Assessment will be completed for each member. The Current
Contract(s) Score will be the same; however, each member will have a distinct history for the purpose of
establishing consequences.
e. The director must present the results of every assessment to the relevant director general/regional
director general (DG/RDG).
8.180.15.10 Notice of intent for applying a Vendor Performance Corrective Measure

(2015-12-23)
a. For the purpose of the VPCMP, there are two types of VPCMs:
i. Debarment is the refusal by PWGSC Acquisitions Branch to do business with a vendor for a
specified period. A debarment renders a vendor ineligible to bid on:
A. contracts;
B. standing offers and call-ups; and
C. supply arrangements and contracts under supply arrangements where PWGSC Acquisitions
Branch is the contract authority.
ii. Conditions may be applied against vendors in place of debarment, where considered more
appropriate. Where a vendor is subject to conditions and has not met those conditions before bid
closing date or before commencement of a non-competitive process, the vendor is declared
ineligible to bid on or to receive:
A. contracts;
B. standing offers and call-ups; and
C. supply arrangements and contracts under supply arrangements where PWGSC Acquisitions
Branch is the contract authority.
b. Notice to the vendor on the result of a VPCM Assessment:
i. If the threshold to apply a VPCM is not met, the DG/RDG informs the vendor that (see Annex 8.8
Letter Template Where No Vendor Performance Corrective Measure Will Be Applied At This
Time for letter template):
A. No VPCM is applied at this time.
B. The category of impact and the associated score for the contract(s) on which the VPCM
Assessment was completed.
C. Canada reserves the right to take the history score of all contracts with terminations for
default and conditional amendments into consideration if another assessment is triggered by
a further termination for default or conditional amendment on other contracts.
D. The vendor has 15 business days to respond in writing and his response could include a
request to present orally to the DG/RDG.
ii. If the threshold to apply a VPCM is reached, the DG/RDG will notify the vendor of the intent to
apply a VPCM (See Annex 8.9 Letter Template for Notice of Intent to Apply a Vendor
Performance Corrective Measure for letter template). In addition to the corrective measure, the
notice of intent for applying a VPCM to the vendor must include:
A. a list of:
terminations for default and conditional amendments for the relevant contract or
standing offer including information on the category of impact and the associated
score;
history of closed contracts with terminations for default and conditional

amendments taken into account; and
history of VPCMs;
B. the procurements against which the VPCM would apply, i.e., whether the VPCM will be
across-the-board (affecting all aspects of the vendor's operations) or limited by product,
division, geographic division, type of contract (such as urgent delivery requirement) or
other factors;
C. when, and how if applicable, the VPCM will end;
D. where conditions are recommended, who will determine that they have been satisfied;
E. a notification that the VPCM extends to any other business arrangements involving the
vendor, including subcontracting, partnership and joint venture; and
F. indication that the vendor has 15 business days to respond in writing and that his response
could include a request to present orally to the DG/RDG.
c. Review of Vendor’s Response

i. For both cases in (b) above, if after having reviewed the vendor’s written response and any
presentation material, the DG/RDG revises the assessment results, the DG/RDG informs the
vendor of the following:
A. the revised assessment results; and
B. that Canada reserves the right to take the history score of all contracts with terminations for
default and conditional amendments into consideration if another assessment is triggered by
a further termination for default or conditional amendment in another contract.
d. A vendor will be given access to documents relevant to its performance including the VPCM
Assessment form on the same basis as would be available in a contract dispute.
e. In the case where the threshold to apply a VPCM has been reached:
i. The DG/RDG will send by e-mail a one-page summary of the VPCM case, a signed copy of the
assessment form (PWGSC 149-1), along with any of the vendor’s written response and any
presentation material to the VPCM co-ordinator;
ii. The VPCM co-ordinator will request a review and seek recommendation regarding a VPCM
against a vendor from the Acquisitions Program – Policy Committee (AP-PC) line directors. The
AP-PC line directors will be required to submit a response within five business days from the date
the VPCM co-ordinator sends the request; and,
iii. Following the consultation period , the VPCM co-ordinator will forward the proposed VPCM and
the results of the consultation with the line directors to the Director General, Policy, Risk,
Integrity and Strategic Management (PRISM) Sector for review and recommendation.
8.180.15.15 Assistant Deputy Minister decision

(2015-12-23)
a. In the case where a VPCM is to be applied, the Director General, Policy, Risk, Integrity and Strategic
Management (PRISM) Sector will submit the assessment results to the Assistant Deputy Minister,
Acquisitions Branch (ADM/AB). The ADM/AB is the sole approval authority for the imposition of a
VPCM.
b. Except where there is an approved Sector/Region Vendor Performance Program, the ADM/AB will
review the assessment results, including information provided by the vendor.
c. The ADM/AB will inform the vendor of the decision whether a VPCM will be applied (See Annexes
8.10 Letter Template for Decision to Apply Conditions as a Vendor Performance Corrective Measure
and 8.11 Letter Template for Decision to Apply Debarment as a Vendor Performance Corrective
Measure for letter templates).
8.180.15.20 Actions pursuant to a decision to apply a Vendor Performance Corrective

Measure
(2015-12-23)
a. The Assistant Deputy Minister’s (ADM) office sends a copy of the completed VPCM Assessment form
to the VPCM co-ordinator in the Policy, Risk, Integrity and Strategic Management (PRISM) Sector.
Information on a VPCM will only be entered into VIM by PRISM.
b. The VPCM co-ordinator informs the authorities of relevant standing offers and supply arrangements
about the imposition of a VPCM.
c. A decision to reject a bid/offer/arrangement because of a VPCM can be made at any time up to contract
award or issuance of a standing offer or supply arrangement. VIM is to be checked for a VPCM at bid
closing for competitive procurements and prior to any interaction with a sole source vendor. With
respect to call-ups, standing offers must be set aside for vendors that are subject to relevant VPCMs. In
addition, VIM is to be rechecked prior to contract award. Where extending the length of a contract is
being considered, VIM is also to be checked before issuing amendments or exercising options. For the
right to reject a bid/offer/arrangement because of a VPCM, see section 5.55.5 Authority to Reject a
Bid/Offer/Arrangement.
d. In accordance with section 7.35 Notification to Unsuccessful Bidders/Offerors/Suppliers, the vendor

must be informed of the decision to reject a bid/offer/arrangement because of a VPCM.
e. If a member of a joint venture is subject to a VPCM, the bid/offer/arrangement, contract or call-up is to

be rejected as a whole.
f. VPCM information will be relevant and will remain on VIM for six years from the date the VPCM is
implemented. Therefore, for the entire six year period, with regards to any future VPCM calculations,
the VPCM in VIM will contribute to the history score of all subsequent assessments.
g. When a VPCM ends, the VPCM co-ordinator will notify the sector/region that initiated it, which is then
responsible for promptly notifying the vendor.
8.180.20 Standard Acquisition Clauses and Conditions Manual Provisions for Stop Work
Orders, Contract Suspensions and Other Reasons for Bid Rejection
(2011-06-29)
No provisions under the VPCMP will in any way override PWGSC’s rights with respect to stop work orders,
contract or supply arrangement suspensions, standing offer set-asides and other reasons for
bid/offer/arrangement rejection set out in the SACC Manual.
8.180.25 Exceptions
(2011-06-29)
In cases of emergency in procurement, a DG/RDG may make a recommendation for an exception to a VPCM.
In such cases, special care should be taken to protect Canada. Where an exception is made, the reason should be
recorded on the contract file. Such exception must be approved by the ADM/AB or the approval authority
designated in a sector/region vendor performance program
8.180.30 Sector/Region Vendor Performance Programs

(2011-06-29)
a. A sector/region may establish a customized or tailored program for evaluating vendor performance and
determining appropriate measures to apply for specific commodities or commodity groupings. Where
such a program has the approval of the ADM/AB, it is not necessary that the ADM/AB review the
cases. The decision can be made by the persons delegated that authority under the program.
b. The determination to have such a program will be made in the context of the procurement risk
management strategy for the specific commodity during the pre-contractual phase of the procurement
process. If it is determined that a sector/region program will be developed, until this program is
operational, the contracting officer is to apply the generic VPCMP process. Annex 8.12 Framework for
Developing a Sector/Region Vendor Performance Program provides a framework for developing such a
program.
c. The program may incorporate elements from the generic VPCMP process.
d. Once established, the customized vendor performance program is administered by the sector/region.
8.1651 Differences of Opinion or Interpretation

(2010-01-11)
On occasion, differences of opinion or interpretation may arise between the contracting officer and the auditor
regarding the legitimacy of audit findings. The relevant director should resolve these differences of opinion or
interpretation in concurrence with the Director, Acquisition Program Integrity Secretariat, before the Cost Audit
Group will take close out action.
Annex 8.1: Guidelines on Procurement File Organization and Make-up

(2017-08-17)
1. Overview
a. These guidelines are intended to help procurement staff in organizing their procurement files.
Consistent filing methods allow for a more organized approach to procurement and ensure that
anyone reviewing the file is able to locate documents with minimal effort. The importance of
proper filing techniques is more evident when, for example, information is needed quickly for
audits, Access to Information requests, Canadian International Trade Tribunal complaints,
litigations, when a contracting officer takes over file responsibility and needs to determine the
status of the procurement process, etc.
b. As a general rule, documents should be filed in chronological order. A proposed format for file
organization is set out below. The list of documents is not intended to be comprehensive and is
subject to the professional opinion of the contracting officers. All the documents may not be
applicable in all cases. Furthermore, file organization and the required documents may vary in
accordance with regional/sectoral procedures and guidelines. Separate file volumes may be
warranted to accommodate the excessive size of some documents.
2. Documents proposed for the left-hand side of the file jacket:
a. signed requisition and any requisition amendments;
b. final version of the Statement of Work (SOW), plus any documents that alter the requirement,
e.g., approved design changes, etc;
c. Security Requirements Check List (SRCL);
d. detailed documents for the Advisory Committee on Repair & Overhaul (ACRO), Procurement
Review Committee (PRC) or Senior Project Advisory Committee (SPAC);
e. record of decision by ACRO, PRC or SPAC;
f. where only one person is capable of performing the work, the sole source justification along with
responses provided by the client to questions appearing in Annex A of TB Contracting Policy
Notice 2007-4 (see Annex 3.1 Treasury Board Questions for Sole Source);
g. completed Fairness Monitoring Coverage Assessment and Recommendation form;
h. signed original Formal Procurement Plan/Procurement Plan;
i. approved original Contract Planning & Advance Approval (CPAA) form, Contract Summary, and
CPAA for Amendment forms;
j. documented evidence of the complexity level;

k. completed and approved Procurement Risk Assessment (PRA), including any revision, with
results;
l. completed and approved PRA for Amendments, with results;
m. signed Request for Reviewer Endorsement (Commodity) form;
n. Notice of Proposed Procurement (NPP);
o. Advance Contract Award Notice (ACAN);
p. approved Contract Request and Contract Amendment Request;
q. signed original Treasury Board submission and approval, and any amendment;
r. signed original contract, standing offer, supply arrangement, call-ups and associated amendment
documents;
s. acknowledgement copy signed by supplier, as appropriate (e.g. the supplier’s signature is required
on a "You are requested" contract);
t. letters of authority (e.g. Go-Ahead letter, Letter of Intent, National Security Exception, Limiting
Liability);
u. formal legal agreements;
v. integrity verification response (determination of ineligibility), documented evidence that

Declaration Form received, Administrative Agreement was entered into, Public Interest Exception
was approved;
w. formal notifications (e.g. performance, conditional amendment, stop work order, termination,
Comprehensive Land Claims Agreements);
x. copies of any relevant acting delegation of authority memos;
y. procurement summary from the Automated Buyer Environment (ABE);
z. Record of Extract and Part Files (PWGSC-TPSGC 1015 (PDF Version 73 KB) - (Help on File
Formats);
aa. copies of extract file contracts and their contract amendments;
ab. Request for Additional Funds (PWGSC-TPSGC 329 (PDF Version 65 KB) - (Help on File
Formats);
ac. invoices/reports.
3. Documents proposed for the right-hand side of the file jacket:
a. acknowledgment of requisition;
b. request for distribution of technical data;
c. file index, if more than one volume exists;
d. original solicitation document, plus document updates or amendments;
e. letters of interest;
f. minutes of bidder's conferences;
g. bidder's questions and answers;
h. bids received, including Bid Receiving Unit Report (can be placed in a separate volume);
i. bid evaluation, including tabulation sheets, notes, signature of each of the evaluators;
j. signed technical evaluation report (signature of all evaluators);
k. signed financial evaluation report (signature of all evaluators);
l. Fairness Monitor Report;
m. price certification;
n. price support;
o. transportation analysis;
p. legal opinions;
q. policy opinions;
r. documentation supporting strategic direction (environmental considerations, impacts and

mitigation, trade agreements, CLCAs/PSAB, Intellectual Property, Vendor Performance, integrity
verification, etc.) *;
s. any comment provided following quality assurance reviews, cost analyst’s reviews and/or peer
reviews;
t. contract award notices;
u. regret letters;
v. supplier correspondence;
w. client department correspondence;
x. relevant e-mail messages;
y. agendas and meeting minutes;
z. notes to file (phone calls, summary of events, actions taken, lessons learned etc.) **;
aa. for Canadian Commercial Corporation files only, specific additional forms, as applicable;
ab. file close-out documentation.
* Documentation related to potential issues or problems may be better suited on the left side of the file.
** Procurement files should tell a story from beginning to end, and notes to file are an important part of this
process. Notes to file can provide a file history, provide an explanation of problems encountered, and act as
reminders to contracting officers.
Notes to file should be legible, clear, complete and concise. They should state the subject matter along with
what was discussed, any action taken, date, name of person, and company name or client department, phone
number, and the name of the person making the note.
The use of self-stick notes, phone message slips, small scraps of paper, etc., should be avoided since they may
be easily lost or overlooked.
Annex 8.2: Contract Management Early Warning Indicators

(2010-01-11)
The following factors, if present with a particular procurement, indicate there may be problems with the file.
These factors should warrant further investigation and consideration and, in some cases, referral to more senior
levels of authority.
1. Before Contract Award
a. Requirement early warning indicators:
i. requisition transferred several times;
ii. receipt of a requisition for a stand alone procurement when an existing procurement
instrument (such as a standing offer) already exists;
iii. urgent requirements without adequate rationale for urgency;
iv. potential situation for employee/employer relationship;
v. sole source or no substitute requirements without adequate rationale;
vi. contracts with former public servants outside of guidelines;
vii. unclear/vague description of work/requirement;
viii. indications that the "deal is already cut";
ix. complex or innovative requirements requiring the development of new methodology;
x. work already under way and requiring confirmation and backdating;
xi. unrealistic time frames;
xii. lack of responsiveness from contractor during negotiations;
xiii. indication of requirement splitting;
xiv. weak financial capacity of contractor.
b. Sensitive files early warning indicators:
i. sensitive requirements that may be of interest to various interest or stakeholder groups;
ii. highly visible requirements, especially ones of interest to the media;
iii. contentious requirements that may result in aggressive competition.
2. After Contract Award
a. Performance/management early warning indicators:
i. unusual number and value of amendments without clear rationale;
ii. unexpected/unclear subcontracting activities;
iii. PWGSC excluded from meetings between contractor and client department;
iv. missed deadlines/reports/meetings;
v. quality of performance/deliverables below expectations;
vi. excessive warranty claim;
vii. excessive maintenance services;
viii. invoices for out of scope items;
ix. frequent and unexplained turn over of contractor staff;
x. request for amendments for out of scope work;
xi. disputes and difficulty with resolution of issues.
b. Financial early warning indicators:
i. contract cost not in line with forecasts;
ii. outstanding claims/invoices;
iii. poor and irregular billing/invoicing practices;
iv. reluctance to submit copies of claims/invoices;
v. reluctance to supply supporting financial information;
vi. difficulty conducting audits;
vii. indication that business practices are deviating from the policies.
Annex 8.3: Termination for Convenience Process

(2012-07-16)
1. Overview
a. Policy, Risk, Integrity and Strategic Management Sector (PRISMS) was designated to provide
termination settlement services including the processing of claims associated with goods and
services contracts terminated for convenience by Canada. PRISMS was also designated to handle
claims arising from United States and Canadian Commercial Corporation (U.S./CCC) contracts
that are terminated for the convenience of the U.S. government. For terminations involving U.S./
CCC contracts, the Director, APIS/PRISMS, will ensure compliance with the certification and
termination settlement functions that are required to conform with the U.S. Department of
Defense and Department of National Defence Letter of Agreement (see U.S. Defense Federal
Acquisition Regulation Supplements 225.870-6 and 249.7000
(http://www.acq.osd.mil/dpap/dars/dfars/html/current/249_70.htm) ). The DG, PRISMS will also be responsive
to requests by the U.S. government for arranging for audits of U.S. government contracts or
subcontracts placed directly with Canadian-based suppliers that are terminated for convenience.
b. The contracting officer and the termination claims officer (see 8.135.10 Involvement of the
termination claims officer) are responsible for the following termination activities:
The contracting officer:
issues Stop Work Order and Notices of Termination; and
administrates the non-terminated portion of the contract.
The termination claims officer:

assesses the contractor's request for any upward adjustment of the contract price for
the non-terminated portion of the contract;
requests claim from contractor and forwards claim forms;
ensures acceptability of claim by assisting contractor with preparation;
determines, defines and arranges audit, as required;
arranges for inventory verification and screening by client;
negotiates final settlement with contractor;
prepares Settlement and Release document;
disposes of surplus inventory;
forwards Settlement and Release document to contractor for acceptance;
obtains invoice and signed Settlement and Release document from contractor;
submits invoice through client department; and
distributes Settlement and Release document.
c. Occasionally, the client will require a contract status report before making a decision to cancel the
contract. In this event, the client will inform Public Works and Government Services Canada
(PWGSC) of its intention to reduce or cancel a contract by issuing a "Notice of Intent to Cancel"
either by telephone or in writing. The client will usually request all or part of the following
contract status information before making a final decision to terminate:
i. quantity of stores produced against the contract;
ii. quantity of stores in production;
iii. value of raw materials and/or components acquired by the contractor to carry out the
specific contract;
iv. the position with respect to tooling and capital equipment, especially where the contractor
had to tool-up to carry out the contract;
v. status of subcontracts;
vi. the most economical point at which to effect termination; and
vii. the approximate amount of termination claims, if known.
d. The contracting officer must immediately request the information from the contractor and closely
follow up to ensure that it is received as soon as reasonably possible. When the information is
received, the contracting officer will forward it, together with any recommendations, to the client.
Normally, the client's first request will be to cancel all or a portion of a contract, in which case the
contracting officer should immediately issue a Stop Work Order. A Stop Work Order is a
safeguard to ensure a halt in the work and remove the possibility of further expense being
generated by the contractor. To terminate the contract, a Stop Work Order must be followed by the
issuance of a Notice of Termination for Convenience.
2. Stop Work Order – Notice of Termination

On receiving the client's initial written instructions to cancel all or part of a contract for the convenience
of Canada (see 8.135.5 Termination for Convenience of Canada), the contracting officer should
immediately issue a Stop Work Order to advise the contractor to "stop work" (see the Standard
Acquisitions Clauses and Conditions [SACC] Manual clauses J0500C and J0502C.) The Notice of
Termination ( J0001C, J0002C, J0003C, J0006C) cannot be issued until the formal requisition
amendment is received, and a legal opinion has been sought. The contracting officer should also contact
and provide the termination claims officer with a copy of the Stop Work Order and the Notice of
Termination.
3. No Claim is Involved
When a contractor advises the contracting officer that a claim will not be submitted following the
receipt of a Notice of Termination, the contracting officer must eliminate the funding for the terminated
items. Since no claim is made, the termination claims officer is not involved in this process.
4. Client's Decision
a. It is the client's responsibility to decide at what stage a full or partial termination should take
place. Formal amendments to the requisition, confirming the decision to terminate, must be
provided as quickly as possible.
b. The contracting officer must not issue a Notice of Termination for Convenience until an
amendment to the client's requisition has been received.
c. The contracting officer should ensure that sufficient funds remain in the amended requisition to
cover the contract value.
5. Notice of Termination
a. When the requisition amendment is received, the contracting officer will prepare the Notice of
Termination or Partial Termination by using the clauses provided in subsection 5-J, of the
Standard Acquisition Clauses and Conditions (SACC) Manual, and on advice from Legal
Services will send the Notice of Termination to the contractor.
b. After the Notice of Termination or Partial Termination is issued, the contracting officer must
immediately forward a copy of the Notice of Termination to the termination claims officer.
In order to avoid further costs to Canada and hardship to the contractor, a Notice of Termination
must be issued as quickly as possible to finalize the implications of a Stop Work Order.
6. Adjustment of Funds
The funds in the contract must not be adjusted when the Notice of Termination is issued. The contract
funds will be adjusted on the Settlement and Release document.
7. Adjustment to the Price of the Non-terminated Portion of the Contract

Whenever a contractor requests an upward adjustment to the cost or unit price of the non-terminated
portion of a contract, the resulting claim for adjustment should be referred to the termination claims
officer for review, before reaching any agreement with the contractor, concerning such upward cost or
price adjustment.
8. Termination File
a. For non-complex, fully terminated contracts, the contracting officer should transfer the complete
procurement file to the termination claims officer, if a claim is involved.
b. For complex procurements or partial terminations, where the non-terminated portion of the
contract is still active, the contracting officer will forward an electronic copy of each of the
following documents to the termination claims officer as applicable: the contract, all amendments,
specifications, pricing details, pertinent correspondence and any other information relevant to the
termination.
9. Informing the Contractor
a. If a claim is involved, the termination claims officer will forward the termination claim forms and
the Procedures Guide – Processing Settlement Proposals Related to Contracts Terminated for
Convenience to the contractor.
b. The following claim forms may be obtained from the termination claims officer.
i. PWGSC 581 (PDF Version 652 KB) - (Help on File Formats) – Settlement Proposal for
use by Fixed Price Prime Contractor or Fixed Price Subcontractor (Including Inventory
Schedules A to D)
ii. PWGSC 582 (PDF Version 315 KB) - (Help on File Formats) - Schedule of Accounting
Information
iii. PWGSC 583 (PDF Version 371 KB) - (Help on File Formats) - Application for Partial
Payment
c. The accompanying letter to the contractor should contain the following instructions:
"In the event subcontractors are involved with this termination, please advise of the number of
subcontractors who will require termination claim forms and their contact information. Please
arrange to complete all sections of the claim in as much detail as possible. After signature by your
executive authority, return the original and one (1) copy to this office.
You are hereby requested to forward your completed claim as soon as reasonably possible. In
order to assist you in meeting that date, we would be pleased to provide guidance and
explanations necessary to ensure that your company takes proper action and that the correct
information is included in the forms.
Please note that all communications and documents with respect to your claim should be directed
to: __________. (Insert appropriate name and address of the termination claims officer.)"
d. After the termination claim forms are forwarded, the termination claims officer will contact the
contractor to ensure that the forms have been received and that the necessary action is being taken
on the contractor's part to submit a claim. If the contractor has any questions concerning the
presentation of the claim, or the details of the termination settlement procedures, the contractor
should contact the termination claims officer directly. When the contractor has completed the
forms, the signed original is returned to the termination claims officer who will then become
responsible for the resolution of the claim.
10. Audit of Claims
a. Upon receipt of a claim, the termination claims officer will determine the need for an audit. If the
termination claims officer concludes that an audit is required, the termination claims officer will
prepare the terms of reference for the audit and arrange for its completion.
b. When an audit is performed, the termination claims officer reviews the cost factors reported by
the auditor, and reconciles the contractor's claim with the auditor's report. The cost implications of
any inventory adjustments should be discussed with the auditor, as well as with the contractor.
11. Inventories
a. If the claim from a Termination for Convenience involves inventory that is rendered surplus by
the termination, the termination claims officer should send copies of the termination inventory
schedules to the client in order to obtain instructions as to disposition, which will be either:
i. Arranging for the verification and shipment of all, or any part, of the inventories to a
recipient designated by the client. The costs associated with packaging, routing, shipping,
etc., are a proper post termination charge to be added to the contractor's claim; or
ii. Arranging inventory verification (by the termination claims officer with the Inspection
Authority of the client) so that the Settlement Offer may be adjusted to reflect any
inventory discrepancies; or
iii. Arranging for the disposal of the residual inventory by a Crown Assets Distribution Centre
(CADC). In this case, the termination claims officer should prepare a Sales Request (for
surplus materiel and equipment) form on the Government of Canada Surplus Client
Interface (GCSci) (http://www.gcsurplus.ca/ic-ci/) . (NOTE: Only approved government
employees have access to the site.)
b. Prior to Submitting the Sales Request (SR) the termination claims officer will obtain the
certification of the client department and the Director of the PWGSC Contracting Directorate that
the inventories are reasonable in relation to the requirements of the terminated portion of the
relevant contract; that their use is not required for other existing PWGSC contracts, due to the
nature of the goods; and consequently, that disposal is recommended. The termination claims
officer will submit the online Sales Request on GCSci to CADC.
c. Any proceeds realized from the sale of the surplus inventory are credited (less the CADC
commission fee), back to the client, to the Consolidated Revenue Fund or to the revolving fund,
as applicable.
12. Settlement Offer, Close-out and Dispute Resolution
a. The termination claims officer is responsible for reviewing the audit report, if one was completed,
and negotiating a settlement offer with the Contractor. This offer informs the contractor of the
amount of the settlement the termination claims officer is prepared to recommend to the Director,
APIS/PRISMS for approval.
b. Once the contractor accepts the proposed settlement offer, the termination claims officer will
prepare the Settlement and Release form, and submit it to Legal Services for review, to the
Director, APIS/PRISMS for approval and signature, and then to the contractor for acceptance and
signature. When the contractor's written acceptance of the Settlement and Release document is
received, the original along with the final invoice is placed on the PRISM file, and a copy
forwarded to the contracting officer for the procurement file. A copy is also sent to the client to
issue payment.
c. If the contractor rejects the proposed settlement, the termination claims officer will advise the
contractor, in writing, of the Alternate Dispute Resolution (ADR) services available in the
Business Dispute Management Program within the Departmental Oversight Branch. (see 8.140
Disputes)
13. Payment of the Settlement

When a partial payment or final settlement payment related to a claim on a contract terminated or
partially terminated for the convenience of Canada is approved and signed by the Director,
APIS/PRISMS, the termination claims officer will place the original of the completed document on the
PRISM file, and make arrangements to implement the approved settlement payment.
Annex 8.4: Termination for Default

(2013-03-21)
a. The decision to terminate a contract for default should be made only after all other possible solutions
have been explored. In all cases, the advice of Legal Services must be obtained at an early stage, to
ensure that any proposed action will not prejudice Canada's legal position and that the termination is
legally enforceable.
b. Failure to take action may prejudice Canada's interests.

If a contract is secured by surety bonds, termination of the contract may change the existing contractual
relationship with the bonding company.
c. Canada has the right to terminate all or any part of the contract for default if:
i. The contractor fails to make progress, so as to endanger performance of the contract.
A. The contracting officer may provide the contractor in writing with a reasonable period of
time, normally ten days, to rectify the situation. If this period must be longer, the
contracting officer may require the contractor, within ten days, to show evidence of
corrective action.
B. If the contractor does not rectify the situation, the contracting officer may, subject to the
limitations in the default clause, initiate action to terminate the contract for default.
ii. The contractor fails to perform any provision of the contract.

If the contractor does not rectify such a defect within ten days of receipt of a notice from the
contracting officer, the contracting officer may, within the limitations set forth in the default
clause, initiate action to terminate the contract in whole or in part for default.
iii. The contractor fails to deliver the goods or perform the services within the time specified in the
contract.
A. In the absence of excusable delays, Canada has the right to terminate the contract
immediately, regardless of how slight the delay may be. This includes the right to accept or
reject goods shipped, but not yet delivered. In addition, if the contractor does make timely
delivery, but delivers defective goods or improperly performs services, and is unable to take
corrective action within the unexpired delivery schedule period, Canada also has the right to
terminate for default.
B. Whenever a contracting officer contemplates termination of a contract for failure to deliver

on time, the contractor must be so advised, as soon as possible, after the default occurs.
Failure to take such action may prejudice Canada's position.
C. when there is reasonable assurance that delivery will be made, even though late, it may be
desirable to discuss extension of the delivery time with client. If the delivery date is
extended, negotiation for some kind of consideration may be appropriate. This constitutes a
conditional amendment (see section 8.70.5 Amending Contracts), which triggers the
requirement for a VPCM Assessment.
This situation would arise when delivery would be further delayed by terminating and placing the
contract elsewhere.
iv. the contractor becomes bankrupt or insolvent.

Upon receipt of a notice of bankruptcy or insolvency, the settlement procedure outlined in 8.155
Final Payments should be followed.
Action to Recover Loss or Damage

a. After termination, the contracting officer will determine the actual amount or best estimate of loss or
damage suffered by Canada, and the distribution of the damages to be recovered from the contractor.
Estimates of loss or damage should include any amount in excess of the contract price, which Canada
may be obliged to pay in procuring the goods or services elsewhere.
b. The contracting officer must refer claims to Legal Services when a contract is secured by a security
deposit (government guaranteed bonds, bills of exchange, irrevocable standby letters of credit), or when
Canada has a claim against a contractor that is related to a work package for which, the contractor has a
claim against Canada.
c. In all other cases, the contracting officer will attempt to negotiate a settlement. When a satisfactory
settlement cannot be reached, the claim will be referred to Legal Services for action.
d. When a contractor agrees with the proposed settlement, the recommendation to recover monies will be
submitted to Cost and Profit Assurance Group (CAPG), or, in the case of a Canadian Commercial
Corporation (CCC) contract, the Director, Finance and Resources Administration (FRA). Cost Audit
Group or the Director, FRA, will issue an invoice to the contractor for the monetary recovery.
e. If payment is not received within 60 days of the date of issue of the invoice, then CPAG or the Director,
FRA, will advise the contracting officer to take appropriate follow-up action with the contractor. When
normal follow-up procedures have not been successful, the matter must be referred to Legal Services.
f. Claims must not be removed from departmental records until satisfied by payment or a properly
authorized deletion action.
Contract Payment under Surety Bond

When a surety bond is being enforced, payments will be issued as follows:
i. Performance bond: Upon completion of the contract to the satisfaction of Canada, the bonding company
may be paid all amounts to which the contractor would be entitled under the terms of the contract;
ii. Payment bond: The bonding company must not be reimbursed for the payment of creditors from any
funds held by Canada until the work is complete, and the surety company has fully discharged its
obligations under the bond.
Annex 8.5: Refunds of Excess Profits Earned on Public Works and Government Services
Canada Contracts
(2013-03-21)
a. All indications from any source of unreasonably high profits realized from any contract placed pursuant
to the Defence Production Act, or from any contract other than competitive firm price awarded pursuant
to the Department of Public Works and Government Services Act should be reviewed in consultation
with the Director, Acquisition Program Integrity Secretariat (APIS).
b. Negotiated Refunds:
i. Normally, the first step in negotiating a refund is for the contracting officer and APIS to review
the evidence available, and decide whether the profits realized by the contractor can be
recommended for acceptance or are in excess of what is considered to be fair and reasonable. In
the event that the evidence is incomplete or inconclusive, consideration should be given as to
whether the contractor will be approached for a statement of its position or whether a request will
be forwarded to Audit Services Canada for additional verification. When all the evidence
necessary is assembled, a final review will be made to determine what, if any, amount should be
refunded, and the method of payment.
ii. In an attempt to ensure that suppliers are being treated consistently throughout Public Works and
Government Services Canada (PWGSC), the Cost and Profit Assurance Group (CPAG) will
distribute to the members of the Contract Audit Review Committee the proposed action plan of
the contracting officer in respect to a contractor's excess profit, identified through audit. Any
comments or concerns with the action plan should be communicated to CPAG within ten working
days. CPAG will consolidate the input and forward it to the lead contracting authority for
consideration.
iii. In some cases it will be in order to recover excess profits by deduction from current claims, or a
part recovery may be affected through an assignment of income tax refunds. Ordinarily, however,
the contractor will be expected to remit the full amount by cheque. If it appears that this action
will create an unreasonable hardship, extended terms of payment may be considered.
iv. The agreed upon amount to be refunded and the terms of settlement will be set out in a letter to
the contractor, approved by Legal Service, and signed by the responsible officer of the
sector/region. Copies of this letter are to be sent to the Director, Acquisition Program Integrity
Secretariat (APIS).
v. After settlement is completed, it may be desirable to release the contractor from further obligation
by detailing, in a formal agreement, the contract to which the settlement relates. Legal Services
should draft this agreement.
vi. Cheques forwarded by the contractor should be made payable to the Receiver General and mailed
to the contracting officer. The contracting officer will pass them to CPAG who will forward them
to the Chief Financial Officer of the client.
vii. Reference should be made to section 10.70 Recovery and Disposition of Contract Claims
Adjustments Process.
c. Voluntary Refunds:
i. Where a contracting officer receives notice from a contractor that they desire to return excess
profits, or if a contractor voluntarily forwards a cheque in refund of such profits, the contracting
officer should request a statement showing:
A. a summary of the excess profits by contracts; and
B. an explanation of the principal reasons, which accounts for the excess and how the amount
was arrived at.
ii. Pending an appraisal of the information given by the contractor and of the particular
circumstances of the case, any cheques received should be sent immediately to the Director,
APIS, accompanied where possible, by a statement, showing the distribution of the refund over
the contracts affected. The Director, APIS, will then forward the cheques to the Chief Financial
Officer for the client.
iii. In deciding how extensive a review should be carried out in each case, the determining factors
will be:
A. the value of the contracts affected, and the total amount of the contracts let to the
contractor;
B. the explanations given by the contractor, as to the procedure followed in arriving at the
amount of the refund;
C. the capacity known to the contractor for assembly and interpretation of costs in accordance
with Contract Cost Principles 1031-2, if applicable.
iv. If there is doubt as to the accuracy of the contractor's computations or if it appears that there may
be other excess profits which have not been declared, then a full inquiry must be instituted;
v. A final decision will be agreed upon by consultation between the sector/region concerned and the
Director, APIS, and this conclusion will be communicated to the Chief Financial Officer of the
appropriate client department.
d. Refunds from Subcontractors:
Refunds from subcontractors should be handled in accordance with the above procedures. In addition,
however, it will be necessary for PWGSC to keep the prime contractor informed of its negotiations with
the subcontractor, and in some cases, it will be preferable to deal with the subcontractor through the
prime contractor. If the refund results from a contractual provision in effect between the prime
contractor and the subcontractor, then the refund should be effected by the prime contractor. If the
refund arises from circumstances not envisaged in the subcontractor's contractual arrangements with the
prime contractor, then the refund should be effected by PWGSC, and should not result in a windfall
being realized by the prime contractor.
e. Assignment of Income Tax Refund:
i. In the event that a settlement from the contractor must be financed partly from the proceeds of its
income tax refund, the sector/region concerned will endeavor to obtain a voluntary assignment of
the income tax refund in the following terms:
"Receiver General of Canada

Ottawa, Ontario
(Company) ______________ of the City of _________ in the Province of ______________ does

hereby authorize and direct that any amounts presently due or accruing due to it in the future from
the Canada Revenue Agency, be applied in reduction of its debt to Her Majesty the Queen in right
of Canada in the amount of $ ___________ on account of ________".
ii. In the case of a corporation, the direction should be under the seal of the Corporation and the
signature of duly authorized officers. The form, which should be a separate document and not
embodied in a letter, should then be passed by the sector/region to the Director General, Finance,
Corporate Services, for processing in accordance with normal government practice. Treasury
Board authorization is not required.
iii. Whether the assignment is voluntary or pursuant to section 155 (Deduction and set-off) of the
Financial Administration Act, the Finance Sector assumes the responsibility of notifying Canada
Revenue Agency (CRA) of the assignment. The manner in which money is transferred from CRA
to PWGSC, or to the Department of National Defence (in the case of refunds to its own votes) is a
matter for decision by the Finance Sector. However, the transfer will be made either by means of a
Receiver General cheque or an interdepartmental Journal Voucher. Under either method, the
transfer advice will be passed to the sector/region concerned who will forward it to the Director
General, Finance Sector.
Annex 8.6: Risk Management approach to Vendor Performance Process Chart

(2012-10-25)
This document is published in Scalable Vector Graphics (SVG) format, which may not display on your browser.
These alternative formats are available:
Overview of the Process Chart - Text version
Overview of the Process Chart (PDF 113.5 KB) - (Help on File Formats)
Click this image to view it in full screen.
Risk Considerations for Applying VPCMP VPCMP Process
Pre-Contractual Phase Contracting Phase Contract Administration Phase Post Contract Phase
Determining the Impact of Vendor Right to Reject Bids at Assessment of Vendor Performance Application of Vendor
Performance Issues on the Evaluation Stage (See Note 3) During the Contract Period Performance Corrective
Procurement Strategy For information on how to add Measure (VPCM)
“Other Performance Records” in VIM .
(See Note 5)
As part of Yes
procurement risk
management & Follow sector/region program process for Follow sector/region program process to monitor Follow sector/region program process to
commodity Is there evaluating bids. vendor performance. apply corrective measures.
research, assess a sector/region
the impact of program?
performance
issues that might Start of Generic With client, monitor and document
See Note 4 Award contract.
arise. No poor vendor performance. See Note 6 See Annex 8.6.1 for
VPCMP Process
information on required
procedure for applying a
VPCM.
See Note 1 Re-verify in VIM that
a VPCM has not been Contract Are
applied prior to Yes performance
ends
award of a contract. normally. issues
corrected?
No Is sector/
No
region
Continue evaluation.
Performance Information Gained

program
required?
Is there an
No operational requirement
Yes No No
to continue Complete mandatory
contract? assessment for a VPCM
Is there a to mitigate risks.
See Note 2 Terms of Yes VPCM in VIM
VPCM applies to Yes
applied to
vendor?
vendor?
Offer conditional amendment in
Yes lieu of a termination for default.
Develop a
sector/region
program.
Reject bid.
Received
(See Annex 8.12)

Bids
Terminate Conditional Issue

No Yes
contract for amendment conditional
default. accepted? amendment.
Notify
vendor.
Include performance Inform VPCM co-ordinator to
criteria for evaluating add note to VIM and obtain
At end of
vendor performance over authority to proceed with
contract.
the life of the contract. VPCM Assessment process.
Note 1: For sole source contracts, access VIM to verify if a VPCM applies prior to negotiation of terms and conditions. Note 4: No call-up contracts can be issued to a vendor subject to a relevant VPCM.
Note 2: Until the program is operational, the contracting officer is to follow the generic process. Note 5: “Other performance records” are added when significant issues require a note as per 8.180.15.1.h.
Note 3: The right to reject also applies to offers and arrangements. Note 6: See section 8.180.15.1.b on required documentation.
Overview of the Process Chart - Text version

This flowchart shows the full mandatory steps of the Vendor Performance Corrective Measure Policy
(VPCMP). The flowchart is divided into the four phases of the procurement process: Phase 1: Pre-Contractual,
Phase 2: Contracting, Phase 3: Contract Administration, and Phase 4: Post Contract. The Pre-Contractual and
Contracting phases incorporate the risk considerations for applying the VPCMP. The Contract Administration
and the Post Contract phases are where the VPCMP process is applied. Each required step is indicated in the
relevant phase of the procurement process. For example, it must be determined at the Pre-Contractual Phase if a
sector/region program exists.
RISK CONSIDERATIONS FOR APPLYING VPCMP (PHASES 1 AND 2)

Phase 1: Pre-Contractual
In this phase, the impact of vendor performance issues on the procurement strategy must be determined by
following these steps:
Step 1 - Assess the impact of performance issues that might arise, as part of procurement risk
management and commodity research. For sole source contracts, access the Vendor Information
Management (VIM) system to verify if a Vendor Performance Corrective Measure (VPCM) applies
prior to negotiation of terms and conditions.
Step 2 - Decision: Does a sector/region program exist?

If yes, follow sector/region program process for evaluating bids. Stop reading the contents of the
chart.
If no, proceed to Step 3 of Phase 1.
Step 3 - Decision: Assess whether a sector/region program is required.

If yes, develop a sector/region program using Annex 8.12 of the Supply Manual. Until the
program is operational, the contracting officer is to follow the generic process. Proceed to Phase
2: Contracting (risk considerations for applying a VPCMP).
If no, proceed to Phase 2: Contracting (risk considerations for applying a VPCMP).
Phase 2: Contracting
This phase gives the right to reject bids at evaluation stage. The right to reject also applies to offer and
arrangements. The process is described in following steps:
Step 1 - Include performance criteria for evaluating vendor performance over the life of contract.
Step 2 - Decision: Determine whether a VPCM in VIM applies to the vendor being considered, once
bids have been received.
If yes, verify if terms of VPCM apply to vendor. If a VPCM is applicable, reject the bid and
notify the vendor. Stop reading the contents of the chart.
Step 3 - Continue evaluation.
Step 4 - Re-verify in VPCM that a VPCM has not been applied prior to award of a contract.
Step 5 - Award contract if no VPCM has been applied. No call-up contracts can be issued to a vendor
subject to a relevant VPCM. Proceed to Phase 3: Contract Administration (VPCMP process).
APPLICATION OF THE VPCMP PROCESS (PHASES 3 AND 4)
Phase 3: Contract Administration
Assessment of vendor performance must be done during the contract period. Other performance records are
added when significant issues require a note as per paragraph 8.180.15.1 (h) of the Supply Manual. The process
is described in the following steps:
Step 1 - Monitor and document poor vendor performance with client. See paragraph 8.180.15.1 (b) of
the Supply Manual for information on required documentation.
Step 2 - Decision: Determine whether performance issues are corrected.

If yes, contract ends normally. Stop reading the contents of the chart.
Step 3 - Decision: Determine if there is an operational requirement to continue contract.

If yes, offer conditional amendment in lieu of a termination for default and proceed to Step 4 of
Phase 3.
If no, terminate contact for default and skip to Step 5 of Phase 3.
Step 4 - Decision : Is conditional amendment accepted?

If yes, issue conditional amendment and proceed to Step 5 of Phase 3.
If no, terminate contract for default and proceed to Step 5 of Phase 3.
Step 5 - At the end of contract or at the expiry date of the standing offer, proceed to Phase 4: Post
Contract (VPCMP process).
Phase 4: Post Contract

Phase leading to the application of a Vendor Performance Corrective Measure (VPCM.) The process is
described in the following steps:
Step 1 - Inform VPCM coordinator to add note to VIM and obtain authority to proceed with VPCM
assessment process.
Step 2 - Complete mandatory assessment for a VPCM to mitigate risks.
Step 3 - Refer to Annex 8.6.1: Required Procedure for Applying a Vendor Performance Corrective
Measure (VPCM) of the Supply Manual for information on required procedure for applying a VPCM.
Performance information gained must be kept. It will be considered for future procurement processes in
the first step of Phase 1: Pre-contractual.
Annex 8.6.1: Required procedure for applying a Vendor Performance Corrective Measure
(VPCM)
(2017-04-27)
This document is published in Scalable Vector Graphics (SVG) format, which may not display on your browser.
These alternative formats are available:
Chart Overview - Text Version
Click this image to view it in full screen.
VPCM assessment Director accepts Director presents Is threshold to

Yes DG/RDG accepts Yes apply a VPCM Yes
results presented to assessment assessment results assessment
director. results? to DG/RDG reached?
results?
DG/RDG advises vendor of intent to

apply a VPCM and level of impact. (* 2)
VPCM assessment No No No
re-evaluated.
Vendor has 15 business days to respond
in writing. In addition the vendor may
request a face-to-face meeting.
DG/RGD advises vendor of the assessment

results (no VPCM), level of impact and no. of DG/RDG reviews vendor’s written
points that will be added to vendor response and any presentation material.
contract history. (* 1)
Vendor has 15 business days to respond DG/RDG

in writing. In addition the vendor may maintains
request a face-to-face meeting. assessment
results?
DG/RDG reviews vendor’s written response No

and any presentation material. Yes
Contracting officer advises VPCM co- DG/RDG sends by email a one-page summary
The VPCM co- ordinator to update the note in VIM to Vendor advised of final decision, of the VPCM case, signed copy of the
assessment, and the vendor’s written response
ordinator adds a indicate the category of impact category of impact and no. of
(if any) to the VPCM co-ordinator.
note to VIM. (minor, medium or major) and no. of points that will be added to its
points to add to the contract history of contract history.
the vendor.
VPCM co-ordinator sends documentation to

No Acquisitions Program – Policy Committee
(AP-PC) line directors and seeks feedback.
ADM advises the vendor that ADM VPCM co-ordinator provides documentation
a VPCM will be applied and ADM reviews the DG PRISM submits and results of line directors’ consultation to
Yes applies the assessment
specifies the type and extent VPCM? assessment results. DG Policy, Risk, Integrity and Strategic
of the VPCM. (* 3) results to the ADM. Management (PRISM) Sector.
Chart Overview
This flowchart shows the complete sequence of steps involved once the Vendor Performance Corrective
Measure assessment was completed by the Contracting Officer. Beginning with the first step, this chart
identifies the responsibilities of the Contracting Officers based on possible scenarios. For example, it must be
determined whether or not the director accepts the assessment results. Once the decision is made, the reader
must refer to the next relevant step in the process. The following steps describe the process to follow.
DIRECTOR REVIEW OF VPCM ASSESSMENT RESULTS

Step 1 - Present VPCM assessment results to the director.
Step 2 - Decision: Does the director accept the assessment results?

If yes, then proceed to step 3
If no, VPCM assessment must be re-evaluated, then return to step 1.
Step 3 - Director presents assessment results to the Director General/Regional Director General
(DG/RDG).
Step 4 - Decision: Does the DG/RDG accept assessment results?
If yes, then proceed to step 5
If no, VPCM assessment must be re-evaluated, then return to step 1.
Step 5 - Decision: Is threshold to apply a VPCM reached?

If no, proceed to stream 1 – Non-application of a VPCM
If yes, proceed to stream 2 – Application of a VPCM
STREAM 1 – NON-APPLICATION OF A VPCM

Step 1 - DG/RDG advises vendor of the assessment results (no VPCM), level of impact and no. of
points that will be added to vendor contract history. Annex 8.8 provides a letter template.
Step 2 - Vendor has 15 business days to respond in writing. In addition the vendor may request a face to
face meeting.
Step 3 - DG/RDG reviews vendor’s written response and any presentation material.
Step 4 - Vendor advised of final decision, category of impact and number of points that will be added to
its contract history.
Step 5 - Contracting officer advises VPCM co-ordinator to update the note in VIM to indicate the
category of impact (minor, medium or major) and number of points to add to the contract history of the
vendor.
STREAM 2 – APPLICATION OF A VPCM

Step 1 - DG/RDG advises vendor of intent to apply a VPCM and level of impact. Annex 8.9 provides a
letter template.
Step 2 - Vendor has 15 business days to respond in writing. In addition the vendor may request a face to
face meeting.
Step 3 - DG/RDG reviews vendor’s written response and any presentation material.
Step 4 - DG/RDG informs the Acquisitions Branch DG/RDG Committee.
Step 5 - The VPCM co-ordinator sends documentation to the Acquisition Program – Policy Committee
(AP-PC) line directors and seeks feedback regarding the proposed VPCM; the VPCM co-ordinator
sends the results of the consultation to the Director General (DG), Policy, Risk, Integrity and Strategic
Management (PRISM) Sector.
Step 6 - The DG PRISM submits the assessment results to the Assistant Deputy Minister, Acquisitions
Branch (ADM/AB).
Step 7 - ADM reviews the assessment results.
Step 8 - Decision: Does the ADM apply a VPCM?

If yes, proceed to next step in this stream (Step 9 of Stream 2).
- If no, skip to Step 4 of Stream 1.
Step 9 - ADM advises the vendor that a VPCM will be applied and specifies the type and extent of the
VPCM. Annex 8.10 and Annex 8.11 provide letter templates.
Step 10 - The ADM Office advises the VPCM co-ordinator of the decision to apply a VPCM. The
VPCM co-ordinator adds a note in VIM.
Annex 8.7: Principal elements of the Vendor Performance Corrective Measure

Assessment
(2015-12-23)
1. Current Contract Impact Score

This score refers to the impact of the poor performance issues over the entire period of the contract or
over the entire period of the standing offer that resulted in a termination for default or conditional
amendment. This score takes into account the relative importance of the requirements in the overall
context. There are three categories of performance issues for consideration in the PWGSC 149-1
Assessment Form (Time of Delivery, Quality of Product, and Other), and the following grid applies:
i. low impact = 1 to 3
ii. medium impact = 4 to 6
iii. high impact = 7 to 9
2. Conversion Score
Where an impact score of 9 points has been given for at least one performance issue, this will have a
Conversion Score equivalent to 40 points. This falls under the category of major impact from poor
performance. Otherwise, the following conversion table will be used:
Table 1 – Conversion for the Total Current Contract Impact Score
Total Current Contract Impact Category of Total Current Contract Conversion

Score Impact Score Score
Equal to or less than 9 Minor 10 points
Greater than 9 but less than 15 Medium 20 points
15 or more Major 40 points
3. History Score
Contracts with a termination for default or a conditional amendment and VPCMs are taken into account
to calculate the Total History Score, as follows:
i. 10 points for each case of VPCM

ii. 10 points for each contract case with a minor impact of poor performance
iii. 20 points for each contract case with a medium impact of poor performance
4. Total Impact Score and VPCM Consequences

This score is calculated by adding the Conversion Score and the Total History Score. If the Total Impact
Score is 40 or more, the consequences are as follows.
Table 2 – VPCM consequences based on the frequency of cases
VPCM History Consequence
No case within last six years Debarment of 6 months or, if more appropriate, conditions
One case within last six years Debarment of 18 months or, if more appropriate, conditions
Two cases within last six years Debarment of 36 months or, if more appropriate, conditions
Note: Any excess points beyond the threshold (40 points) required for imposition of a VPCM (which are
accumulated as a result of the Total Impact Score calculation) will not be carried over for purpose of
future Total Impact Score calculations for future VPCMs.
5. Consistency in Assessments
Given that every default situation is different, it is important to allow latitude to contracting officers and
client departments in the assessment of their particular cases.
The following guidance is provided to ensure consistency across PWGSC Acquisitions Program.
On the assessment form, the term "Impact", combined with the words "High", "Medium" or "Low", are
used to characterize the severity of impact of a default situation.
6. Guidance on Factors to Consider in Determining Impact

In determining the severity of impact of a default situation, two factors relating to vendor performance
must be considered: the consequences and the behaviour of the vendor as described below.
Factor 1: Consequences
The determination of the consequences for government operations resulting from the default is
the most important factor to take into consideration. In determining the consequences, Canada
shall consider, but not be limited to, the following:
i. endangerment/injury/death of human beings;
ii. diminishment in the quality and timeliness of providing services to the Canadian public;
iii. the complication of any possible success of future related government operations;
iv. wasting of public money/resources;
v. destruction of property.
Factor 2: Behaviour of the Vendor
The level of negligence of the vendor in creating the default situation and the efforts (degree of
cooperativeness) demonstrated by the vendor in order to assist the government mitigate the
consequences of the default.
7. Guidance on how to determine whether the default has a High, Medium or Low Impact as it
relates to each performance issue (i.e. time of delivery, quality of product or service, other)
a. High impact
The vendor defaulted on a requirement that was essential to an important and urgent or ongoing
government operation which resulted in the success of an important operation being
compromised.
Example: A vendor failed to deliver key military equipment for an ongoing in-theatre operation
overseas, resulting in a diminishment of Canada’s military capability for this important
international mission. The default situation increased the danger for military personnel and
international partners and compromised the success of the mission. The vendor was made aware
of the fact that they were in default and was uncooperative to help mitigate the damage caused.
b. Medium impact
The vendor defaulted on a requirement and the government department incurred significant
consequences. This resulted in complicating government operations in the short or medium term.
Example: A vendor did not provide acceptable routine maintenance services on equipment used
by a specific government department which provides important but not critical services to the
Canadian public. The vendor attempted to cooperate when the problem became evident but was
unable to resolve it and had been clearly delinquent in failing to recognize and indicate in their
bid that their abilities were limited.
As a result of the inadequate maintenance work performed by the vendor, regular government
operations were rendered partially unreliable. The consequences of the default were decreased
efficacy and efficiency of government operations, and therefore diminished service to the
Canadian public. This service was hindered for a period of many weeks until a new vendor
capable of correcting the problem was found.
c. Low impact
The vendor defaulted on a low dollar value requirement which was neither urgent nor critical to
ongoing government operations. This default stemmed from factors partially out of the vendor’s
control.
Example: A vendor failed to deliver supplies because their foreign supplier has suddenly stopped
making the specific product contracted for. This material was intended for the stockroom supply
shelves and did not have a critical application and could be obtained from other sources. The
vendor had proactively communicated their inability to provide the supplies, provided a full
explanation and were amenable to helping in whatever manner they could. The consequence was
that the procurement officer had to repeat the procurement and supplies in the stockroom were a
bit lower than usual.
Annex 8.8: Letter Template Where No Vendor Performance Corrective Measure Will Be
Applied At This Time
(2012-10-25)
(Full or partial terminations for default and conditional amendments trigger the mandatory assessment process
at the end of a contract or at the expiry date of a standing offer to determine whether a Vendor Performance
Corrective Measure (VPCM) will be applied. If the threshold to apply a VPCM is not met, the Director
General/Regional Director General (DG/RDG) informs the vendor that no VPCM is applied at that time. This
template is a reminder of what the Vendor Performance Corrective Measure Policy (VPCMP) prescribes.
Italicized, bold text in blue in the letter template below must be adapted to the specific situation.)
Heading of Public Works and Government Services Canada
REGISTERED MAIL AND COURIER
Date: XXXX
Name of the vendor

Address
Attention: XXXX
Subject:
Result of the Vendor Performance Corrective Measure (VPCM) Assessment

{insert Contract or Standing Offer number, title, and delete this
instruction}
Dear Ms., Mr. {insert name here and delete this instruction}
As per the Vendor Performance Corrective Measure Policy (VPCMP), Public Works and Government Services
Canada (PWGSC)/Acquisitions Branch (AB) carried out a VPCM Assessment at the end of the above
referenced {insert "contract" or "standing offer" and delete this instruction}.
This VPCM Assessment was triggered by the following:
{List all terminations for default and conditional amendments of the

above referenced contract or standing offer including the date of
issuance and delete this instruction}
Based on the result of the assessment, this letter is to inform {insert name of the vendor here
and delete this instruction} that:
no VPCM will be applied at this time;
{insert category of impact here and delete this instruction} and

{insert the corresponding Conversion Score here and delete this
instruction} will be recorded in the Vendor Information Management (VIM) system as the Current
Contract(s) Impact Score;
the Current Contract(s) Impact Score will become part of your history score;
in the event that another assessment is triggered by a further termination for default or conditional
amendment, Canada reserves the right to take the history score of all contracts with terminations for
default and conditional amendments into consideration, while excluding the notes used as the basis for
applying a previous VPCM.
As provided in the policy, {insert name of the vendor here and delete this
instruction} may respond in writing regarding the VPCM Assessment. Such written response must be
submitted to the undersigned within 15 business days following receipt of this letter. {Insert name of
the vendor here and delete this instruction} may also include a request during this 15
business day period to present orally and, to this end, an appointment must be made with the undersigned.
Please be advised that, if {insert name of the vendor here and delete this
instruction} does not respond within the 15 business day period noted above, PWGSC/AB will proceed to
record the Current Contract(s) Impact Score in VIM.
Yours truly,
Name of the DG/RDG

Name of the sector or region
Address
Phone number
Attached: Copy of the VPCM Assessment form
NB: You can view the Vendor Performance Corrective Measure Policy by going to: {insert the
Internet address for the appropriate version of the VPCMP and delete this
instruction}.
Annex 8.9: Letter Template for Notice of Intent to Apply a Vendor Performance
Corrective Measure
(2015-12-23)
Corrective Measure (VPCM) will be applied. If the threshold to apply a VPCMis met, the Director
General/Regional Director General (DG/RDG) informs the vendor of the intent to apply a VPCM. This
template is a reminder of what the the Vendor Performance Corrective Measure Policy (VPCMP) prescribes.
Italicized, bold text in blue in the letter template below must be adapted to the specific situation.)
Date: XXXX
Name of the vendor

Address
Attention: XXXXX
Subject:
Notice of intent to apply a Vendor Performance Corrective Measure

{insert Contract or Standing Offer number, title, here and delete this
instruction}
As per the Vendor Performance Corrective Measure Policy (VPCMP), Public Works and Government Services
Canada (PWGSC)/Acquisitions Branch (AB) carried out a VPCM Assessment at the end of the above
referenced {insert "contract" or "standing offer" and delete this instruction}.
This VPCM Assessment was triggered by the following:
{List all terminations for default and conditional amendments of the

above referenced contract or standing offer including the date of
issuance and delete this instruction}
Based on the result of the assessment, PWGSC/AB intends to apply a Vendor Performance Corrective Measure
(VPCM) against {insert name of the vendor here and delete this instruction}
pursuant to PWGSC’s VPCMP. This letter is to notify {insert name of the vendor here and
delete this instruction} of the following:
PWGSC/AB intends to apply the following VPCM :

a xx month debarment
the period of debarment will begin on the date the Letter of

Decision to apply debarment as a VPCM is signed by the Assistant
Deputy Minister, Acquisitions Branch
the scope (See 8.180.15.10(b)(ii)(B))
OR
PWGSC/AB intends to apply the following VPCM:
conditions that have to be met
when and how the recommended VPCM will end
who will determine that conditions have been satisfied
In addition to the above, for commodities within the scope of the VPCM, {insert name of the
vendor here and delete this instruction} is advised that the VPCM would extend to any
other business arrangements involving {insert name of the vendor here and delete this
instruction}, including subcontracting, partnership and joint venture.
As provided in the policy, {insert name of the vendor here and delete this
instruction} may respond in writing to this notice of intent to apply a VPCM. Such written response must
be submitted to the undersigned within 15 business days following receipt of this letter. {Insert name of
the vendor here and delete this instruction} may also include a request during this 15
business day period to present orally and, to this end, an appointment must be made with the undersigned.
Please be advised that, if {insert name of the vendor here and delete this
instruction} does not respond within the 15 business day period noted above, PWGSC/AB will proceed to
record the Current Contract(s) Impact Score in VIM and continue the process to apply the VPCM described
above.
Yours truly,
Name of the DG/RDG

Name of the sector or region
Address
Phone number
Attached: Copy of the VPCM Assessment form
instruction}.
Annex 8.10: Letter Template for Decision to Apply Conditions as a Vendor Performance
Corrective Measure
(2012-10-25)
Corrective Measure (VPCM) will be applied. If, as the result of a VPCM Assessment, a decision is made for
applying conditions as a VPCM, the Assistant Deputy Minister, Acquisitions Branch (ADM/AB) informs the
vendor of the decision. This template is a reminder of what the Vendor Performance Corrective Measure Policy
(VPCMP) prescribes. Italicized, bold text in blue in the letter template below must be adapted to the specific
situation.)
Date: XXXXX
Name of the vendor

Address
Attention: XXXXX
Subject: Decision to apply a Vendor Performance Corrective Measure
As set out in the notice of intent to apply a Vendor Performance Corrective Measure (VPCM) letter dated
XXXX, Public Works and Government Services Canada (PWGSC)/Acquisitions Branch (AB) has decided to
apply against {insert name of the vendor here and delete this instruction} the
following conditions as a VPCM pursuant to the Vendor Performance Corrective Measure Policy:
{Insert the following here and delete this instruction}
the conditions that have to be met
the effective date
when and how the recommended VPCM will end
who will determine that conditions have been satisfied
{Insert name of the vendor here and delete this instruction} must supply all
information and documentation required by PWGSC/AB in order for it to assess if {insert name of the
vendor here and delete this instruction} has met the conditions. Until such time that
PWGSC is in a position to confirm that the conditions have been met, the VPCM will apply.
vendor here and delete this instruction} is advised that the VPCM would extend to any
other business arrangements involving {insert name of the vendor here and delete this
instruction}, including subcontracting, partnership and joint venture.
While PWGSC regrets any disruption to your business, Canada’s paramount concern must be the safeguarding
of public monies. Should you require additional information, please contact {insert name of the
Director General/Regional Director General (DG/RDG) and delete this
instruction}, {insert title (Director General or Regional Director General)
and delete this instruction} of {insert name of the sector or region here
and delete this instruction} at {insert phone number of the DG/RDG here and
delete this instruction}.
Yours truly,

Acquisitions Branch
CC: {Insert name of the DG/RDG and delete this instruction}
instruction}.
Annex 8.11: Letter Template for Decision to Apply Debarment as a Vendor Performance
Corrective Measure
(2015-12-23)
Corrective Measure (VPCM) will be applied. If, as the result of a VPCM Assessment, a decision is made for
applying a debarment as a VPCM, the Assistant Deputy Minister, Acquisitions Branch (ADM/AB) informs the
vendor of the decision. This template is a reminder of what the Vendor Performance Corrective Measure Policy
(VPCMP) prescribes. Italicized, bold text in blue in the letter template below must be adapted to the specific
situation.)
Date: XXXXX
Name of the vendor

Address
Attention: XXXXX
Subject: Decision to apply a Vendor Performance Corrective Measure
As set out in the notice of intent to apply a Vendor Performance Corrective Measure (VPCM) letter dated
XXXX, Public Works and Government Services Canada (PWGSC)/Acquisitions Branch (AB) has decided to
apply against {insert name of the vendor here and delete this instruction} the
following debarment as a VPCM pursuant to the Vendor Performance Corrective Measure Policy:
{Insert the following here and delete this instruction}
a xx month debarment commencing on the date of signature of this letter
vendor here and delete this instruction} is advised that the Vendor Performance Corrective
Measure would extend to any other business arrangements involving {insert name of the vendor
here and delete this instruction}, including subcontracting, partnership and joint venture.
While PWGSC regrets any disruption to your business, Canada’s paramount concern must be the safeguarding
of public monies. Should you require additional information, please contact {insert name of the
Director General/Regional Director General (DG/RDG) and delete this

instruction}, {insert title "Director General" or "Regional Director
General") and delete this instruction} of {insert name of the sector or
region here and delete this instruction} at {insert phone number of the
DG/RDG here and delete this instruction}.
Yours truly,

Acquisitions Branch
CC: {Insert name of the DG/RDG and delete this instruction}
NB: You can view the Vendor Performance Corrective Measure Policy by going to:{insert the
instruction}.
Annex 8.12: Framework for Developing a Sector/Region Vendor Performance Program

(2011-06-29)
Customized past performance programs should address the following as appropriate and applicable to the
circumstances:
1. Scope: Under this section the sectors/regions will define the scope of each customized past performance
program as it pertains to the commodity or commodities, type of procurement, dollar thresholds and
contractual performance risk. This will also identify if the program is incorporated into any strategic
procurement initiatives.
2. How the Customized Program Works: This section will describe how the customized program works.
The following are to be addressed when developing a program:
a. Engagement with relevant industry associations and/or vendors/potential vendors
i. Describe how industry associations and/or vendors/potential vendors will be engaged in the
process of developing the customized program.
ii. Describe how the terms of the program will be communicated to vendors/potential vendors.
b. Performance criteria
i. Provide a clear definition of performance criteria. Criteria must be objective, measurable

and relevant to the commodity or commodity groupings.
ii. Describe the methodology and process for evaluating performance including level of
monitoring, client’s responsibility. The methodology must be relevant to the commodity or
commodities.
c. Consequences from past performance
i. Define what will trigger an action for consequences.
ii. Describe the consequences on opportunities to bid or obtain future contracts including its
scope of application, time periods, etc. Justify the nature, severity and relevance of the
consequences based on the risk assessment for the program.
d. Approval level for application of consequences - Establish the level of authority for such
approval.
e. Notification process
i. Describe how and when vendors will be notified of consequences pursuant to the relevant
customized program. This is conditional on having a notification process for each case of
poor performance.
ii. The notification will describe the consequences and the extent of their scope in detail.
f. Recourse mechanism - Establish a mechanism so that vendors have the opportunity to dispute the
grounds for ensuing consequences.
g. Accountability - Outline the roles and responsibilities for the stakeholders in the program.
h. Documentation revisions - All relevant and necessary documentation, such as solicitation and
contract documents, must be revised to set out the application of the customized program.
i. Tools, forms and systems – List all tools, forms and systems developed for the needs of the
program.
Annex 8.13: Letter Templates for Integrity

(2016-04-04)
1. Template letter of rejection of bid, offer or arrangement for integrity reasons

This template letter is provided for instances where the contracting officer has to advise the bidder, offeror or
supplier that its bid , offer or arrangement has been found non-responsive due to relevant acts or convictions.
The bidder, offeror or supplier should be given 2 business days to respond.
*Note: Contracting officers will have to tailor the letter to their situation.
Date: {insert date}
Attention: {insert contact name}
{insert supplier name and address}
Subject: Solicitation Number {insert solicitation number}
Dear Ms./Mr.{insert name}
We regret to inform you that your {insert bid or offer or arrangement, as appropriate}
has been found non-responsive due to a relevant act or conviction which matches one of those identified in the
Ineligibility and Suspension Policy (http://www.tpsgc-pwgsc.gc.ca/ci-if/politique-policy-eng.html) , and that you have
subsequently been declared ineligible to be awarded a contract.
The conviction of {include number and title of conviction} of {insert name of

relevant Act in italics} was found against {insert name of company or individual
against which the conviction was found}.
As indicated in the Ineligibility and Suspension Policy , the commission of the said acts or offences renders you
ineligible to be awarded a contract.
If you have information which may indicate that the findings are not accurate, please provide it to the
contracting authority, as indicated below, by 5 p.m. eastern time, {insert the date corresponding
to two business days from notification to the supplier}.
If you would like further information on these new measures aiming at strengthening the integrity of the
procurement process, see Public Works and Government Services Canada's Integrity Regime website at
www.tpsgc-pwgsc.gc.ca/ci-if/ci-if-eng.html (http://www.tpsgc-pwgsc.gc.ca/ci-if/ci-if-eng.html) .
{Insert Contracting Authority’s name}
Contracting Authority, Public Works and Government Services Canada
{Insert contact details}
2. Template Letter for Addition of Provisions to an Existing Contract

This letter is to be used when adding or revising the Integrity Provisions in an existing contract, when a
significant contract amendment is to be done such as an increase to the contract value (such as exercising an
option), to extend the contract period, to modify the requirement or for the assignment of a contract.
The contractor, and its affiliates, may be requested, at any time, to provide additional information if required by
the Registrar of ineligibility and suspension to perform a more thorough verification.
Note: Contracting officers will have to tailor the letter to their situation.
Date: {insert date}
Attention: {insert contact name}
{insert contractor name and address}
Subject: Contract Number {insert contract number}
Amendment Number {insert amendment number}
Dear Ms./Mr.{insert name}
You are receiving this letter as a result of the Government of Canada recently announced update to its Integrity
Regime launched in July 2015. The Regime, which introduced measures to strengthen the integrity of
procurement and real property transactions, includes simplified language and provides additional clarifications
and information on processes.
Moving forward, Public Works and Government Services Canada (PWGSC) will apply the updated Integrity
Regime, referenced in the Annexes to this letter, to all solicitations and contracts.
In accordance with the updated Integrity Regime, PWGSC is requesting your consent to a revision to the above
referenced contract to comply with these new measures and is requesting that you agree that general conditions
{insert 2010A or 2010B or 2010C or 2020 or 2029 or 2030 or 2035 or 2040,
as appropriate} ({insert appropriate date}) be replaced by general conditions {insert
2010A or 2010B or 2010C or 2020 or 2029 or 2030 or 2035 or 2040, as
appropriate} ({insert date of latest version}) and form part of the above referenced
contract.
If you agree, please return to my attention a signed copy of this letter no later than {insert month, day,
year}, 5 p.m. Eastern Standard Time. In circumstances where a record suspension (criminal pardon) has been
obtained, or capacities restored by the Governor in Council please provide us with a certified copy of
confirming documentation from an official source within this timeframe.
Agreement
I, ___________________________________ {Contractor's Name} (herein referred to as the
"Contractor" by its Authorized Signatory(ies)) hereby certify to the statements referenced in Annex A to this
letter as well as agree to the afore-mentioned modifications to the general conditions to incorporate the new
Integrity Provisions (referenced in Annex B to this letter) to the above referenced contract
Signature:__________________________________________
Date: ________________________________________
Print Name: ________________________________________
Title: ______________________________________________
We are looking forward to hearing from you. If you have any questions, please do not hesitate to contact me.
Regards,
Insert Contracting Authority’s name
Contracting Authority, PWGSC
Insert contact details
Annex A
CERTIFICATION – UPDATED INTEGRITY PROVISIONS

By signing and returning this letter, the contractor certifies that:
a. it has read and understands the Ineligibility and Suspension Policy, which can be found at www.tpsgc-
pwgsc.gc.ca/ci-if/politique-policy-eng.html (http://www.tpsgc-pwgsc.gc.ca/ci-if/politique-policy-eng.html) ;
b. it understands that certain domestic and foreign criminal charges and convictions, and other
circumstances, as described in the Policy, will or may result in a determination of ineligibility or
suspension under the Policy;
c. it is aware that Canada may request additional information, certifications, and validations from the
Bidder or a third party for purposes of making a determination of ineligibility or suspension;
d. it has provided with this letter a complete list of all foreign criminal charges and convictions pertaining
to itself, its affiliates and its first tier subcontractors that, to the best of its knowledge and belief, may be
similar to one of the listed offences in the Policy;
e. none of the domestic criminal offences, and other circumstances, described in the Policy that will or
may result in a determination of ineligibility or suspension, apply to it, its affiliates and its proposed first
-tier subcontractors; and
f. it is not aware of a determination of ineligibility or suspension issued by PWGSC that applies to it.
Where the contractor is unable to provide any of the certifications required above, or must provide a complete
list of all foreign criminal charges and convictions, it must submit with this letter a completed Integrity
Declaration Form, which can be found at www.tpsgc-pwgsc.gc.ca/ci-if/formulaires-forms-eng.html
(http://www.tpsgc-pwgsc.gc.ca/ci-if/formulaires-forms-eng.html) .
Annex B
NEW PROVISIONS TO BE INCLUDED IN THE CONTRACT

as appropriate} ({insert date of latest version}) Integrity Provisions – Contract
The Ineligibility and Suspension Policy (http://www.tpsgc-pwgsc.gc.ca/ci-if/politique-policy-eng.html) (the “Policy”) and all
related Directives in effect on {date} (insert the date on which the letter is sent} are
incorporated by reference into, and form a binding part of, the Contract. The Contractor must comply with the
provisions of the Policy and Directives, which can be found on Public Works and Government Services
Canada’s website at www.tpsgc-pwgsc.gc.ca/ci-if/politique-policy-eng.html (http://www.tpsgc-pwgsc.gc.ca/ci-
if/politique-policy-eng.html) .

as appropriate} (insert date of latest version}) Code of Conduct for Procurement –
Contract
The Contractor agrees to comply with the Code of Conduct for Procurement and to be bound by its terms for the
period of the contract.
9 Chapter 9 - Special Procurements

(2012-01-18)
9.1 Special procurements - Introduction

(2015-09-24)
a. This chapter presents information related to procurement that is unique or specific to a certain
commodity, client or area. Therefore, this chapter contains a number of topics and each specific topic
contains related subjects. These subjects follow the Supply Manual format identified in 1.5.5 Supply
Manual Format. For example, topics covered are Major Crown Projects, Real Property Contracting and
United States Foreign Military Sales.
b. It is recognized that all procurement scenarios such as those listed in this chapter cannot address every
possible situation that Public Works and Government Services Canada (PWGSC) may face in its
common service delivery environment. However, the types selected are based on historical usage and
recommendations from the contracting community.
9.5 Major Crown Projects

(2013-02-21)
This section describes Major Crown Projects (MCPs), the responsibilities of PWGSC in MCPs, procurement
strategy development as well as other key elements related to MCPs.
On April 1, 2012, the Treasury Board ARCHIVED - Policy on the Management of Major Crown Projects
(http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12040) was rescinded and replaced by the Policy on the Management of
Projects (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=18229) . However, due to its applicability to pre-existing MCPs,
the following sections will remain in the Supply Manual.
9.5.1 Major Crown Projects - General information

(2015-09-24)
a. MCPs are by their very nature large procurements. The Supply Manual applies to them as it would to
any other acquisition. What differs is the notion that participating departments must act in consort with
one another in planning and overseeing the work performed by the contractor(s) in achieving the
deliverables. No one department can act solely from its legislative point of view to the exclusion of the
other participants.
b. A project is deemed to be an MCP when its estimated cost will exceed $100,000,000 and the Treasury
Board (TB) would assess the project as high risk. However, TB may require any project exceeding the
sponsoring minister's delegated project approval authority to be managed as an MCP. As well, provision
is made in the policy for a sponsoring department to request approval from TB to manage a project
exceeding $100,000,000, but of lesser risk within a tailored MCP regime or outside the MCP
management framework.
c. The additional aspects of managing MCPs include obtaining approval-in-principle from Cabinet for an
MCP having significant policy or fiscal framework implications, and the following TB mandatory
requirements:
i. that the project leader be a senior manager within the sponsoring department accountable directly
to the deputy minister;
ii. that the project leader be viewed as personally and visibly accountable for all aspects of the
project;
iii. that a Senior Project Advisory Committee (SPAC) be established with membership consisting of
senior representatives of departments participating in the project. The role of this committee is to
advise the project leader on all aspects of the project and carry out the procurement review
function for the project. SPAC is addressed in more details in 9.5.20 Senior Project Advisory
Committee;
iv. that an appropriate project performance measurement system be selected and implemented;
v. that progress reports be submitted to TB at key events or as directed by TB;
vi. that a project evaluation report be submitted to TB; and
vii. that MCPs be reported to Parliament in accordance with the ARCHIVED - Management of Major
Crown Projects (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12040) .
9.5.5 Responsibilities of Public Works and Government Services Canada in Major Crown
Projects
(2010-01-11)
In respect to MCPs, the Minister of PWGSC is accountable and responsible to Cabinet for the acquisition of the
MCP goods and/or services under the Department of Public Work and Government Services Actand is
responsive to the project leader. The Minister of PWGSC is accountable and responsible for all aspects of the
contracting process and resulting contracts, including:
a. participate in the project as a participating department as described in TB policy on Management of

Major Crown Projects (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12040) ;
b. manage the procurement process from solicitation through contract award to contract completion;
c. support the project in accordance with any existing legislation or general interdepartmental
arrangements;
d. provide any project-specific services such as procurement and scheduling, as described in any
agreement or Memorandum of Understanding (MOU), concluded with the sponsoring department;
e. help to define user requirements/selecting the most effective procurement approach;
f. ensure the best value for money through the optimum combination of specified quality, specified time
and lowest life-cycle cost of the acquisition;
g. include procurement issues in risk assessments and risk management plans;
h. establish project files for all procurement related documents and deliverables;
i. develop a structured approach to document requirements and deliverables, if applicable;
j. ensure the contract is carried out pursuant to the legal framework and maintain the government
standards of prudence, probity and equity, when dealing with the private sector;
k. develop, with the client, the rules of engagement pre-contract;
l. develop and release any formal and/or contractually binding communication between Canada's
representatives and the bidder/contractor;
m. provide access and open and competitive bidding to suppliers through the Government Electronic
Tendering Service;
n. pre-qualify suppliers and build supplier working relationships;
o. manage the solicitation process and documents;
p. make submissions to the TB for authority to enter into contracts, to seek a pre-approval authority for
amounts for anticipated amendments and to amend contracts;
q. lead all negotiations with contractors that could result in contract implications;
r. develop, with the client, the rules of engagement for post contract award interaction between the client
and the contractor;
s. monitor Canada's interactions with the contractor to maintain the integrity of the contract; and
t. manage the contract in order to maintain the integrity of the contractual agreement and compliance with
the contract requirements.
9.5.10 Early Involvement

(2010-01-11)
a. One of the most important tasks for the PWGSC manager relative to a new MCP is to integrate into the
Project Team, as soon as possible, and ensure participation at all levels of the project. One of the key
requirements after establishing the operational objectives of the project is the development of the
procurement strategy for the equipment, parts and services that will be delivered by the project. This is
also one of the key areas of interest for ministers when considering the Memorandum to Cabinet and/or
the TB Submission. Therefore, the Project Team must get involved in the project, as early as possible, to
ensure best value of the procurement, and that clients consider all possible strategies before committing
the project to solutions, which may subsequently conflict with government procurement policies and
strategic objectives. Contracting officers should analyze with the client what opportunities may exist to
support their obligations as well as their departmental targets related to green procurement. Successful
implementation of the Policy on Green Procurement requires the identification and implementation of
environmental performance opportunities at both the strategic and operational levels, taking into
consideration specific departmental buying patterns, sustainable development targets and other
Government of Canada priorities.
b. Best value is not confined to the contractual process; it is equally important at the requirements
definition stage. For many acquisitions, especially for MCPs, it is at this earlier stage that best value
may be achieved. Trade-offs should be made among factors such as quality, service, cost, procurability,
environmental considerations and socio-economic considerations linked to a particular industry or
region of the country. Quality and the desired performance level should be related to intended use. The
most desirable technical quality or suitability is not necessarily the most desirable procurement because
it may not be the most economical. In complex acquisitions, a cost/benefit analysis may balance
technical quality against such factors as initial and operating costs, economic life, service, maintenance
and repair.
9.5.15 Memorandum of Understanding with Client Department

(2010-01-11)
a. A vital aspect in government contracting is the role played by PWGSC and its relationship with client
departments at all stages in the life cycle management of goods and services in a MCP. Details of the
PWGSC-client relationship will normally be covered in a signed general Memorandum of
Understanding (MOU) between PWGSC and its client departments. These may be adjusted to suit
particular PWGSC-client agreements. Acquisitions of a special or significant nature may require
specific MOUs and more detailed treatment, such as that outlined in the TB policy Management of
Major Crown Projects (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12040) . Client departments are generally
responsible for determining what they want, where and when. PWGSC is normally responsible for
determining how goods and/or services will be provided to meet the needs of clients.
b. In terms of life cycle management, this means that:
Requirements definition is, in varying degrees, a client responsibility, depending on government policy
and the type of goods and/or services. By and large, the more technically complex, special, or unique
the requirement, the more it will be a client responsibility to define. Conversely, the more common an
item, the less need for client input, except, for example, to specify the quantity. Acquisition is a PWGSC
responsibility, use is a client responsibility, and disposal of goods is a PWGSC responsibility.
c. This does not mean each party function in isolation. On the contrary, in the MOU it is essential that
there be well-established lines of communication at all stages in the life cycle, reflecting the PWGSC-
client division of responsibilities. In assessing their role and participation in the project, PWGSC must
determine the nature and degree of the effect of the proposed project on their operations, asset base or
other interests, and ensure that appropriate commitments are made; for example, by means of the MOU.
d. Unless the MOU for an MCP specifically states otherwise, the division of responsibilities between
PWGSC and the client department will be governed by the agreements contained in Annex 1.1: Matrix
of Responsibilities between PWGSC and Client Departments for the Procurement of Goods and
Services (Generic), which provides a generic division of anticipated types of responsibilities between
PWGSC and client departments or in Annex: Specific Division of Responsibilities Agreements, which
contains two client-specific agreements with the Department of National Defence.
e. PWGSC's cost of services provided to client departments in respect to a MCP is recovered directly from
the client. The services to be provided and their costs are negotiated with the client department,
approved by TB as part of the Program Approval submission, and the results must be included in the
MOU.
9.5.20 Senior Project Advisory Committee

(2015-09-24)
The role and membership of the Senior Project Advisory Committee (SPAC) as well as the responsibility of
PWGSC in the development of the procurement strategy for Major Crown Projects (MCPs) are addressed
below.
9.5.20.1 Procurement Strategy Development

(2010-01-11)
a. PWGSC is responsible for developing and implementing procurement strategies within the framework
of its client departments' needs, its legislative mandate and government policy. Operating departments
must form a SPAC before initiating discussions with potential suppliers that could raise expectations as
to the government's procurement strategy.
b. The government has confirmed that all procurements in excess of $2,000,000 must be reviewed for
potential regional and industrial benefits. To ensure that this review is carried out in an efficient and
cost-effective manner, and in recognition of the diverse interests involved, TB has established an
interdepartmental procurement review process applying to all such procurements. In the case of MCPs,
this is carried out by the SPAC, whose role is defined in 9.5.20.10 Membership of the Senior Project
Advisory Committee.
c. Environmental performance is also embedded as a key consideration of the departmental procurement

review process under the Procurement Review Committee. For sources of information, environmental
issues and mitigating actions via Green Procurement, consult the Environmental Awareness Tool Kit
and the Guideline for Integration of Environmental Performance Considerations in Federal Government
Procurement. Consider the various environmental performance considerations listed in the Green
Procurement Checklist (http://www.tpsgc-pwgsc.gc.ca/ecologisation-greening/achats-procurement/trousse-toolkit/page-4-

eng.html) . Contracting officers may also refer to the online course entitled Introduction to Green
Procurement (C215).
d. Where the procurement strategies proposed for significant projects require Cabinet approval, sponsoring
departments must consult with the Treasury Board Secretariat (TBS) in preparing the submission to
Cabinet. These consultations must include the analysis of any socio-economic initiatives, and the views
of TBS must be specifically included in the submission to Cabinet.
9.5.20.5 Senior Project Advisory Committee

(2010-01-11)
a. The Senior Project Advisory Committee (SPAC) provides an interdepartmental senior level forum for
orienting a project to achieve relevant national objectives, stimulating agreements between the
sponsoring and participating departments, resolution of interdepartmental issues, and review and
discussion of project objectives and key project instruments. SPACs do not deliberate purely
departmental issues, such as the operational requirement or departmental funding.
b. A SPAC must be established for all Major Crown Projects (MCPs) or those requirements exceeding
$100,000,000. The Project Leader of the client department chairs this committee, and membership
includes representation from other government departments with an interest in the project. Committee
members from other participating departments act as advisors and facilitators to ensure the views of
their departments are made known at the SPAC and to ensure prompt and effective action is taken to
meet the obligations of their departments to the MCP.
c. Whenever a SPAC is convened, it also performs the function of a Procurement Review Committee
including all significant associated procurements handled through the project office. SPAC meets at the
call of the chairperson.
9.5.20.10 Membership of the Senior Project Advisory Committee

(2014-06-26)
a. The Project Leader must determine which departments are potentially affected by, or could have
program interests in the MCP. The Project Leader must ensure that these departments are notified in
writing as early as possible in the life of the project, so that they may decide whether they should
formally participate in the MCP. Whenever an MCP is likely to require private sector involvement, the
departments notified must include appropriate contracting authorities and industrial and regional benefit
authorities.
b. The majority of MCPs will be procurement projects, which are subject to the TB Procurement Review
Policy (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/tbm_122/pr_e.asp) . Sponsoring departments should refer to this
policy for more guidance. Departments sponsoring procurement projects must, as a minimum, notify the
following departments:
Contracting authorities and service agents:
i. PWGSC;
ii. Defence Construction Canada.
Industrial and regional benefit departments and agencies:
i. Industry Canada;
ii. Western Economic Diversification Canada;
iii. Atlantic Canada Opportunities Agency;
iv. Economic Development Agency of Canada for the regions of Quebec.
Others:
i. Privy Council Office;

ii. Treasury Board Secretariat;
iii. Department of Finance Canada;
iv. Employment and Social Development Canada.
As a minimum, sponsoring departments must assess whether departments listed below should also be
notified, particularly for the specific areas noted:
i. Environment Canada, for environmental assessment considerations (may be required by statute

under certain circumstances);
ii. Department of Justice Canada, to ensure timely assistance in resolving any complex legal issues
that can arise;
iii. Employment and Social Development Canada, for labour pool considerations;
iv. Canadian Heritage, when remote sites or locations are involved,
v. Foreign Affairs and International Trade Canada, for international trade and export licensing; and
vi. Indian and Northern Affairs Canada.
c. Other departments may notify the project leader of their intent to participate in the MCP, at which time
they become participating departments.
9.10 Real Property Contracting

(2010-01-11)
a. This section describes the responsibilities for real property contracting and provides some of the related
procedures and methodologies.
b. Acquisitions Branch, Public Works and Government Services Canada (PWGSC), provides procurement
services related to real property contracting for federal departments and agencies. Real Property
Contracting (RPC), Acquisitions Branch, is responsible for contracting real property services such as
architectural, engineering and facility maintenance services as well as construction services. It is
separate and has different responsibilities from Real Property Branch (RPB), PWGSC, which manages a
portfolio of real estate in Canada and is the Government of Canada's real property expert.
9.10.1 Real Property Contracting Procedures

(2017-07-01)
a. Although most of the generic practices and policies of the department apply to real property contracting,
there are differences. Some of these differences are a result of complying with applicable legislation, or
adapting to industry practices, or simply the realities of the services being procured. Many fundamental
review processes do not apply to real property requirements and some examples follow. The
Procurement Review Committee does not apply to the acquisition, modification and routine
maintenance of real property. The Expense Management Tool (EMT) Application for Registration form
PWGSC-TPSGC 514 does not apply to architectural and engineering nor construction requirements.
b. Clauses specific for real property contracting can be found in subsection 5-R of the Standard
Acquisition Clauses and Conditions (SACC) Manual. Departmental standard procurement templates and
many policies exclude some or all of real property contracting requirements and do not apply to real
property requirements. SACC Manual clauses identified as mandatory may not apply to real property
requirements. Standard Real Property Contracting (RPC) templates provide guidance to their
contracting officers.
c. All real property contracting work performed by Acquisitions Branch (AB) must be in accordance with
the Government Contracts Regulations. The Federal Real Property and Immovables Act applies to the
sale and purchase of real property, and leases, including all work performed through a lease. Real
Property Branch (RPB), not AB, is responsible for requirements carried out under the Act. In order to
protect the integrity of AB's system data, no requirements under the Act should be entered into the AB
system, that is, the Automated Buyer Environment (ABE).
9.10.5 SELECT
(2014-06-26)
a. SELECT is a database of pre-approved suppliers such as architects, engineers and construction trade
contractors identified by their expertise and the services they provide. It is used by Public Works and
Government Services Canada (PWGSC) to invite suppliers to bid on real property services
procurements up to certain tresholds. SELECT provides a systematic rotation functionality that matches
the specifics of the requirement with suppliers having the required expertise that are within a geographic
range. Depending on the requirement, a supplier may be given the opportunity to accept or decline the
work, or multiple suppliers may be given the opportunity to compete the requirement.
b. For consulting services estimated at $10,000 or less, SELECT generates a short list of three qualified
suppliers. The most suitable and readily available supplier may be contacted directly. For consulting
services estimated between $10,000 and the NAFTA threshold, SELECT identifies a single supplier that
meets the discipline and experience profile requirements. In both of these cases, the approval authority
is based on non-competitive contract entry. For consulting services below the NAFTA services threshold
value, the SELECT system may also be used to pre-select suppliers from which bids can be solicited.
c. For construction services estimated at $10,000 or less, SELECT generates a short list of three qualified
suppliers. The most suitable and readily available supplier may be contacted directly. For construction
services estimated between $10,000 and $100,000, SELECT generates a short list of five qualified
suppliers; however, the business practice in some locations is to select five to eight qualified suppliers,
all of which are invited to bid. The supplier who submits the lowest-priced responsive offer is usually
awarded the contract.
9.10.5.1 Use of SELECT for Requirements Subject to Comprehensive Land Claims

Agreements (CLCAs)
(2014-06-26)
a. CLCAs are law. The CLCA obligations are legally binding because they are contained in agreements
signed by Canada and backed by legislations.
b. If a requirement is subject to CLCAs, the contracting officer must either:
i. Not use SELECT and proceed with the procurement process explained in section 9.35
Comprehensive Land Claims Agreements (CLCAs);
or
ii. Use SELECT and follow the more tailored process described in section 9.35.91 SELECT.
9.10.10 Architectural and engineering services

(2017-05-12)
The contracting officer must determine the procurement strategy in consultation with the client. The main
method of supply for architectural and engineering services is the standard contract, but Real Property
Contracting also uses alternative methods of supply like standing offers and supply arrangements. Due to the
qualitative nature of the architectural and engineering industry, the submission of full design proposals
represents a large investment of time, effort, and money on the part of consulting suppliers. In order to reduce
the possibility of consulting firms spending large amounts of money preparing such proposals for Public Works
and Government Services of Canada projects, the Department uses both one and two phase request for
proposals for architectural and engineering services.
9.10.15 Construction Services

(2013-11-06)
a. There are three primary methodologies used in the procurement of construction services for projects:
i. Design-Bid-Build (D-B-B);
ii. Design-Build (D-B);

iii. Construction Management (CM).
b. The roles, relationships and responsibilities of the contracting parties vary considerably for each
methodology. Choosing the optimum methodology is a key consideration for the project team. For
construction services, the project team is composed of Real Property Contracting (RPC) of the Real
Property Branch (RPB) and the client.
c. Many variations exist for each approach and the selection of one methodology over another should be
carefully analyzed by all stakeholders during the development of the risk management plan, well in
advance of the procurement, in order to determine the inherent risks, advantages and disadvantages
associated with each methodology. The selection of a particular methodology for the delivery of
construction services is based upon an analysis of those risks identified in the plan that may impact the
priority objectives of the project during the project's planning and implementation stages.
d. Each methodology has advantages and disadvantages and one may be more suitable than another for
any given project. The project team must weigh both the benefits and the shortcomings of using a
specific methodology on their project. Traditionally, PWGSC has accepted the D-B-B methodology as
the standard delivery process for construction projects. Although it may be time consuming, D-B-B
provides the project team with a better 'comfort level' concerning costs and quality. Since design is
100 percent complete before construction begins, changes should be minimal.
e. CM and D-B have been used extensively in the private sector, but used sometimes in PWGSC. A bid
solicitation, in the form of a Request for Proposal, is used for both these methodologies in order to
determine the successful supplier. Design-Build solicitations should also include an honorarium for at
least three suppliers that continue to the phase two of the selection process to compensate them for work
not normally required in the submission of a proposal.
f. RPC generally uses an invitation to tender for construction contracts, with a public opening shortly
following the specified closing time. The tenders are generally evaluated on the basis of the lowest
priced responsive tender. Suppliers must submit their tenders in accordance with the invitation to tender
and associated specifications and drawings. Contracting officers should consult the Standard
Acquisition Clauses and Conditions (SACC) Manual clause R2710T for information on the submission
of bids.
g. Prequalification of suppliers is not normally done. If required, justification should be provided for
prequalification and the criteria established to ensure that the industry can respond appropriately.
Although a two-stage prequalification process may be necessary, a two-envelope process is the preferred
method in construction. Suppliers are asked to submit two sealed envelopes, where envelope "A" will
include the response to the prequalification requirements (almost always a pass/fail type of criteria). If
the content of envelope "A" demonstrates that the supplier is qualified, the envelope "B", including the
price and bid security, is normally opened publicly with other responsive bids.
h. For requirements over $100,000, contracting officers must use the construction terms and conditions
imposed by Treasury Board Secretariat (see clauses in subsection 5-R of the Standard Acquisition
Clauses and Conditions [SACC] Manual). Bid security and contract security (clause R2890D) are also
requirements above this threshold. The client should identify if additional or specialized insurance is
required in the Insurance Terms for the contractor.
i. The Federal Contractors Program for employment equity and the review by the Procurement Review
Committee do not apply to construction contracts.
j. The Minister of PWGSC has delegated to Real Property Branch (RPB) the ability to amend construction
and maintenance contracts awarded by Acquisitions Branch (AB). This authority must be deducted from
AB authorities to ensure that PWGSC does not exceed its overall authority from Treasury Board. The
RPB Project Manager will submit, with the requisition, a risk management plan that will identify items
that may result during the construction project. This plan will include a suggested dollar value called the
"Risk Management Contingency". AB will review the plan and the suggested dollar value, and will
establish an amount to seek approval for a Pre-approved Amount for Anticipated Amendments
(PAAA).This amount will be used for subsequent amendments to the contract.
9.10.20 Elevator maintenance services

(2017-04-27)
This section of the Supply Manual has been removed. For reference purpose only, section 9.10.20 is available in
the Supply Manual Archive (http://www.gcpedia.gc.ca/wiki/Supply_Manual_Archive) , Version 2016-2.
9.15 United States Foreign Military Sales

(2016-01-28)
a. The Foreign Military Sales (FMS) program is a program executed by the United States (U.S.)
Department of Defense (DoD), that allows eligible foreign governments and international agencies to
purchase defence articles and services from the U.S. Government.
b. The FMS program is a mutually beneficial government-to-government method for the procurement of
U.S. defence articles and services. Responsible arms sales further U.S. national security and foreign
policy objectives by strengthening bilateral defence relations, supporting coalition building, and
enhancing interoperability between U.S. forces and militaries of friends and allies.
c. Sole sourcing through the FMS program may be considered as a method of procurement when the
goods or services required relate to military equipment of U.S. origin and when, on the basis of the
information available at the time, those goods and services are available or can be made available from
the U.S. DoD.
d. Only PWGSC Washington (PWGSC [W]) and the Defence and Major Projects Sector (DMPS) have
delegated authority to contract through the FMS program.
e. Requisitions for all new requirements that will be sole-sourced through the FMS program must be
submitted by client departments to the PWGSC Central Allocations Unit (CAU) along with the sole
source justification (see section 3.15 Non-competitive Contracting Process). CAU will allocate the file
to the appropriate PWGSC Headquarters (PWGSC [H]) commodity manager for approval of the
procurement strategy.
f. When the commodity manager has determined that the requirement will be sole sourced through the
FMS program, they will reallocate the requisition to PWGSC (W) using form PWGSC-TPSGC 1062-1
(available on the PWGSC Electronic Forms (ELF) application).
g. The decision by the PWGSC (H) commodity manager to sole source the requirement through the FMS
program must be adequately documented. As a minimum, the following information must be provided:
i. the Goods and Services Identification Number (GSIN);

ii. the trade agreement(s) applicable to the procurement;
iii. the Advance Contract Award Notice (ACAN) and its result, if one was published;
iv. the sole source justification;
v. any other pertinent information leading to the decision to sole source through FMS such as client's
justification, etc.
h. PWGSC (W), in its capacity as the primary accredited Canadian procurement agency to the U.S. DoD,
is the departmental agency responsible for dealing with the U.S. Government on all contractual matters
directly related to the FMS program (with the exception of those requirements to be handled by DMPS).
PWGSC (W) coordinates all pertinent contractual and administrative arrangements in the U.S. on behalf
of PWGSC and its clients.
i. For more information on the FMS program, contracting officers can contact the PWGSC (W) Director
General Office at 202-682-7604, or visit the following Defense Security Cooperation Agency websites:
i. Foreign Military Sales (http://www.dsca.mil/programs/foreign-military-sales-fms) ;

ii. Security Assistance Management Material (http://www.samm.dsca.mil/) .
9.15.1 Foreign Military Sales planning

(2015-09-24)
a. Through its security assistance policy, the USG provides for various forms of security assistance to
other nations. The FMS program is a large and complex program, which is administered by the U.S.
DoD. In Canada, PWGSC, as well as the client, plays an important role in the implementation and
maintenance of this program.
b. Transactions initiated within the FMS program are covered under basic categories of agreements
(known as cases in the U.S. military organizations). The main categories are:
i. Defined Order Cases: Certain defence articles and services can be provided only on defined line
cases, which may offer items at individually estimated prices and delivery dates. The USG, where
necessary, in turn contracts for defence articles and services that are required to fulfill the Letter
of Offer and Acceptance (LOA);
ii. Blanket Order Cases (BOC) including Blanket Open End (BOE) arrangements through the U.S.
Army, and Direct Requisitioning Procedures through the U.S. Navy: most repair parts and routine
services can be offered under Blanket Order LOAs, which reduce the time needed for processing
orders. These LOAs are perfectly suited for addressing subsequent needs, (i.e. where the client
will require additional defence articles or services on a periodic basis). These agreements are
similar to standing offers, allowing clients to submit requirements directly to the identified U.S.
military organization. Support equipment including assemblies, components, special tools, test
equipment, training aid devices, minor modifications performed at U.S. installations and repair
and return services, training, etc., are usually the subject of BOC; and
iii. Co-Operative Logistics Supply Support Arrangements, commonly referred to as COLOG in

Canada and CLSSA in the U.S.: CLSSA is a unique arrangement whereby Canada is able to
invest in the U.S. supply system and receive access to U.S. DoD stocks. This arrangement
involves two separate FMS cases. The first FMS case covers Canada's investment in specific USG
supply system items; the second FMS case is used to requisition these items.
c. PWGSC(H) will determine, before procurement through the FMS program is initiated, whether the
provisions of the North American Free Trade Agreement or the World Trade Organization Agreement
on Government Procurement apply and will take action accordingly. When these provisions do not
apply, PWGSC will determine whether there is an existing or potential source of supply in Canada and
after consultations with the Department of National Defence (DND), or any other client, and will
establish whether in the circumstances, it would be more advantageous for the Government of Canada to
procure in Canada or directly from the equipment manufacturer in the U.S. or from the U.S. DoD.
d. Quite often the weapon system can only be purchased through the FMS program. The Arms Export
Control Act (http://www.law.cornell.edu/uscode/22/ch39.html) gives the President discretion to designate which
military end item must be sold through the FMS program exclusively. This discretion is delegated to the
Secretary of Defence and is executed by the Defence Security Cooperation Agency in close
coordination with the Defence Technology Security Administration and the Military Department
(MILDEPT) or U.S. DoD component responsible for the end item. The Department of State approves or
disapproves all sales, and is responsible for the continuous supervision and general direction of all sales.
Four general criteria are used to determine if a sale is required to proceed through the FMS program:
legislative/presidential restrictions; DoD/ MILDEPT policy, directive or regulatory requirements, e.g.,
the National Disclosure Policy, government-to-government requirements and interoperability/safety
requirements for U.S. Forces. The PWGSC(W) office will confirm with the client when the FMS
program is the only solution.
9.15.5 Contracting Protocol

(2010-01-11)
Contracting with the U.S. DoD for the supply of material or for the provision of services on a government-to-
government basis is affected through the exchange of a Letter of Request (LOR) prepared by PWGSC(W) and
of a Letter of Offer and Acceptance (LOA) prepared by the U.S. LORs are sent to the applicable military
department, the U.S. Department of State and Defence Security Cooperation Agency, a defence department
agency that oversees security assistance programs.
9.15.10 Time Frames

(2010-01-11)
a. The standard period of time for a response from the U.S. DoD to an LOR submitted by PWGSC(W) on
behalf of Canada, is as follows:
i. 60 days from the date of receipt of the LOR for an official price and availability;
ii. 120 days from the date of receipt of the LOR for an LOA not requiring notification to Congress;
iii. 180 days from the date of receipt of the LOR for an LOA requiring notification to Congress,
applicable to acquisitions of major defence equipment valued at $25M or more, or if the total case
value exceeds $100M;
iv. up to nine months in the case of technical data packages due to special inquiries or studies to be
carried out.
b. It is not unusual to have LOAs and amendments exceed the projected targets based on the USG
workloads and high priority cases required to support U.S. Foreign Policy.
9.15.15 Pricing and Payment

(2010-01-11)
a. An LOA is used to submit price estimates to the purchaser country, as well as include a projected
payment schedule. FMS prices may include, but are not limited to, the cost of the item; non-recurring
research and development (R&D) and production costs; packing and handling plus administrative
surcharges. The item price is the same price that would be charged to any other purchaser, including the
U.S. Armed Forces. PWGSC(W) ensures the actual payment schedules correlates to the actual work
performed.
b. Once an LOA has been signed, the applicable MILDEPT buys the item or items from U.S.
manufacturers. This purchase normally goes through U.S. DoD procurement channels, and may not
happen quickly; the time lag between an LOA and a delivery can take a year or more, particularly for
complex weapons systems. The price quoted in the LOA may not match the cost of the items upon
delivery, though in fact most final prices fall below the original estimate. The final price is determined
from actual contract costs and other surcharges, which must be charged in accordance with U.S. laws
and regulations.
9.15.20 Surcharges
(2010-01-11)
a. The Arms Export Control Act (http://www.law.cornell.edu/uscode/22/ch39.html) states that the United States
Government (USG) must manage the FMS program at no cost to the USG. The Act mandates collection
of a percentage-based administrative surcharge on FMS cases to recover all applicable U.S. costs to
execute, manage, and oversee the FMS program. This surcharge is assessed against the value of the
FMS case. The work covered includes case writing, case management/execution (cost, schedule,
performance), case closure and periodic reviews.
b. Small case management line: effective 1 August 2006, any case that would not collect at least $15,000
in administrative surcharges will include a small case management line to charge the difference in value
between the administrative surcharge amount and $15,000.
c. FMS surcharges pay a significant amount of the salaries and operating costs of Security Assistance
Organizations and other Defence Department personnel who carry out the FMS program.
9.15.25 Non-recurring Costs

(2010-01-11)
When requesting a proposal, PWGSC(W) sends a Letter of Request (LOR) to the U.S. DoD requesting them to
identify if non-recurring costs (NRCs) are involved in the requirement. If the ensuing proposal/Letter of Offer
and Acceptance (LOA) from the U.S. DoD includes NRCs, then PWGSC(W) pursues a waiver with Defence
Security Cooperation Agency, before the signing of the LOA.
9.15.30 Release of Information

(2010-01-11)
The USG does not compete with U.S. industry for foreign sales and does not knowingly provide other
governments with "comparison pricing information" especially when it is known that a commercial contract is
being negotiated.
9.15.35 Processing of Documents

(2010-01-11)
a. When a decision is made to satisfy a requirement through FMS, the file is either wholly reallocated or
extracted to PWGSC(W), after the initial requisition review is carried out by the receiving PWGSC
organization (headquarters or region). PWGSC(W) will prepare the Procurement Plan/Contract
Planning and Advance Approval (CPAA).
b. Material to be obtained through FMS must be identified by U.S. national stock numbers whenever
possible. The second group of digits (country designator) must be 00 or 01. The designation 21, which
indicates the presence of a Canadian number, is not acceptable and its use will cause the demand to be
rejected.
c. PWGSC(W) will review each requisition to ensure the adequacy and appropriateness of the information.
If satisfactory, PWGSC(W) will prepare and submit an LOR to the applicable U.S. DoD organization.
d. Upon receipt of the LOA, PWGSC(W) will carry out a verification to determine whether the LOA
corresponds to the LOR and, if satisfactory, will request approval/concurrence as well as funding from
the client department.
e. Following the acceptance of the LOA by PWGSC(W), funds are transferred from the Canadian client to
the USG via a Canadian account at the Federal Reserve Bank in New York. The U.S. DoD will initiate
no action until the transfer of funds has been completed.
9.15.40 Contract Administration

(2010-01-11)
a. PWGSC(W) is responsible for contract administration including billing/payments and expediting

delivery, except for COLOG.
b. PWGSC(W) may arrange program management reviews and/or status review meetings to allow clients
to discuss related matters with representatives from the U.S. DoD.
9.15.45 Contract Amendments

(2010-01-11)
a. PWGSC(W) will negotiate contract amendments, when required.
b. When funds in certain contracts (cases) have not been fully expended, a case amendment extending the
period of time to use up funding may be requested. This normally applies to arrangements where the
scope of work is not affected.
9.15.50 Contract Closing

(2010-01-11)
a. When delivery is completed and final determination of cost is made, PWGSC(W) will initiate closing
action and will seek finalization of accounts. PWGSC(W) will request a cheque payable to the Receiver
General for Canada if funds are due to Canada. If funds are owed to the United States Government
(USG), funds will be requested from the Canadian client.
b. Closure of FMS contracts involving procurement from commercial suppliers may take place years after
delivery of material because of the need to audit and renegotiate certain requirements peculiar to the
U.S. DoD procurement process. A minimum of two years is required to close out an FMS case after
final delivery of the goods and/or services.
c. At the time of final closure, the estimated amounts in the LOA are changed to actual costs and a final
statement of account is issued.
9.20 Co-Operative Logistics and Blanket Order Cases with the United States Department
of Defense
(2010-01-11)
a. This section provides details of the Canada/United States (U.S.) of America Co-Operative Logistics
(COLOG) Supply Support Arrangement (CLSSA) and describes specific responsibilities of Public
Works and Government Services Canada (PWGSC) in relation to this supply support arrangement.
b. The COLOG/CLSSA was initially approved in 1965. PWGSC will make the necessary arrangements to
establish with the USG the contractual instruments such as COLOG arrangements or blanket order cases
(BOC), thus allowing the Canadian Department of National Defence (DND) to obtain directly from the
U.S. Department of Defense (DoD), material and services, as required.

(2010-01-11)
a. Contracting officers should refer to 9.15 United States Foreign Military Sales or information concerning
the requisition process of the U.S. FMS program.
b. The COLOG Operations Office in the Defence and Major Projects Sector (DMPS), Acquisitions
Branch, will review requisitions for COLOG and BOC and provide support to these activities, as
detailed under the Referral Program activities (see 9.20.20 Referral Program), on behalf of PWGSC.
9.20.5 Planning
(2010-01-11)
a. Under COLOG arrangements, a participating country is required to purchase an equity in the supply
system of the appropriate service within the U.S. DoD through a Stock Level Case, which is adjusted as
required, up or down, depending on usage. Canada has purchased an equity in each of the three U.S.
Forces supply systems, U.S. Army, Air Force and Navy, on an as and when required basis, and pays for
only those items it actually draws out of the systems.
b. Since U.S. law prohibits the U.S. DoD from expending its funds on speculative purchases for other than
its own Forces, there is a requirement for deposits to be made usually monthly, in advance, by
participating foreign nations. The amount of the deposit should correspond to the anticipated delivery
value in the succeeding quarter.
c. A final accounting is carried out when all items have been delivered or cancelled and all discrepancies
have been resolved. This accounting results in a contract amendment requiring either a final payment by
Canada or a refund to Canada.
9.20.10 Establishment and Renewal of a Stock Level Case (FMSO I)

(2010-01-11)
a. It is necessary to establish a Stock Level Case, also referred to as Foreign Military Sales Order
(FMSO I), to obtain COLOG support from the U.S. DoD. When the U.S. Air Force, U.S. Army or U.S.
Navy, as applicable, agrees to supply, through COLOG, spare parts to the Armed Forces of a foreign
nation, the U.S. material managers involved will take action to augment the U.S. DoD supply systems to
correspond to the client's anticipated requirement.
b. Stock Level Cases are negotiated as required.
9.20.15 Establishment of a Requisitioning Case (FMSO II)

(2010-01-11)
a. PWGSC establishes annually a Requisitioning Case, also known as a Foreign Military Sales Order
(FMSO) II, before Department of National Defence (DND) is allowed to draw spare parts from the U.S.
DoD supply systems.
b. PWGSC has delegated to DND the responsibility for placing orders directly with the U.S. Navy, the
U.S. Army and the U.S. Air Force, as applicable, once the appropriate Stock Level Case (FMSO I) and
Requisitioning Case (FMSO II) are in place. Requisitions for COLOG eligible items are transmitted
directly by DND to U.S. DoD by means of a computer terminal linked to the U.S. Defense Automatic
Addressing System Center, which provides direct access to the U.S. military supply systems.
9.20.20 Referral Program

(2010-01-11)
a. There are three aspects to the Referral Program:
i. referral of items with an extended price of US $20,000 at the time of requisitioning;

ii. the Quarterly List of all items procured through COLOG;
iii. the Annual List of items procured through COLOG.
This is not a part of the establishment of the contract but rather action that occurs after the contract is
established and throughout the life of the contract as long as COLOG requisitions are submitted against
the case.
b. The following summarizes the Referral Program:
i. When the extended price of an item is US $20,000 or more, the DND COLOG Office responsible
for submitting requisitions through COLOG on the U.S. DoD systems, will provide information
on demand to the PWGSC COLOG Operations Office (Defence and Major Projects Sector
[DMPS]).
ii. The purpose of this referral is to allow DMPS to review the procurement to determine whether
procurement through Canadian and/or other sources is more advantageous to Canada.
iii. The DMPS COLOG Operations Office coordinates the review with input from the PWGSC
product managers as required.
iv. If it is determined that the item is available from the Canadian industry, procurement action
should be completed in Canada unless it is established that such action is not justifiable from a
cost standpoint or that other conditions are unacceptable, particularly as they pertain to
operational requirements. Similarly, if it is determined that the item is available at less cost from
any other commercial source of supply, procurement action may be completed commercially
unless it is established that such action is not justifiable from a total cost standpoint or that other
conditions are acceptable, particularly as they pertain to operational requirement.
v. If the item cannot be procured through the Canadian or foreign-based companies, DND will be
advised to demand it from the U.S. DoD through COLOG.
vi. All referrals should be processed as expeditiously as possible. A full reply or at minimum, an
interim reply will be provided to DND within 30 days of receipt of the referral.
vii. The second portion of the demand Referral Program is that the DND COLOG Office, responsible
for the COLOG program, will forward quarterly to DMPS a printout, which will list all
procurement through COLOG over the last quarter, regardless of value or priority.
viii. The third portion of the Referral Program is similar to the second portion except that it is based on
an annual list being provided by DND of all procurement through COLOG for the last fiscal year.
A similar review as the one performed for the quarterly reports may be conducted.
ix. The purpose of these reviews is to provide an overview of procurement being done through
COLOG over a period of time. This would not be visible with only a review of procurement of
individual items with a value over US $20,000. This review will allow PWGSC to seek sources
based on requirements demanded over time. Often supply of an individual item may not be
attractive to a supplier; however, when procurement of individual items over a period of time is
collectively viewed, the combined value may be very attractive to a supplier.
9.20.25 COLOG Termination

(2010-01-11)
If Canada decides to terminate COLOG arrangements, there is a process that varies with the U.S. DoD service
involved, which will identify those items that Canada is liable to procure from the U.S. DoD.
9.25 Use of the Defence Production Revolving Fund and Loan Account
(2010-01-11)
Under section 16 of the Defence Production Act, in particular, the Minister of Public Works and Government
Services Canada (PWGSC) is authorized to acquire, utilize, store, maintain, transport, sell, exchange or
otherwise dispose of defence supplies, services, projects, real or personal property. The Minister is also
empowered to authorize loans or advances and loan guarantees. Expenditures incurred pursuant to the above
authority are to be expended from the Consolidated Revenue Fund.
9.25.1 Program Description

(2010-01-11)
a. The Defence Production Loan Account (DPLA) provides PWGSC with an account to make loans or
advances to aid in defence procurement such as working capital loans or advance payments on contracts
and to make payment for such.
b. Although the Adjustment of Accounts Act of 1980 eliminated the term Defence Production Revolving
Fund (DPRF) from the Defence Production Act, PWGSC was advised by Treasury Board that it will
continue to designate and operate the DPRF for other than loan transactions. Thus the DPRF provides
PWGSC with a budgetary account to purchase defence supplies, to make payment for such, and to get
reimbursed out of an appropriation of a client (for example, Department of National Defence) or by an
agent of Canada or by an associated government. The DPRF can be used for the following purposes:
i. finance the stockpiling of "essential" materiel or defence supplies;

ii. advance production of defence supplies/materiel to permit workload smoothing of defence
industrial facilities; and
iii. temporarily fund the acquisition of defence supplies to meet urgent requirements, pending
appropriation of funds to finance unplanned requirements.
c. As stated in the Defence Production Act, associated governments are the governments of the British
Commonwealth and of the North Atlantic Treaty Organization, or the government of any other country
designated by the Governor in Council, as being a country the defence of which is vital to Canada.
d. The DPRF was established for interim financing purposes, as it has to be reimbursed by a client or an
associated government or whoever receives the finished product. As such, the DPRF can be used to
make initial payments and subsequently recover such payments from the client. It is simply a temporary
accommodation, and it would be illegal and improper to use it for a permanent commitment of any kind.
Although the use of the DPRF requires that money expended will be reimbursed at the time delivery is
made to the client, such use does not preclude the making of progress payments to suppliers and the
interim recovery of these progress payments from the client.
e. Expenditures charged to the DPRF may be used for the following purposes:
i. Stockpiling of materials or substances, such as steel and oil, designated by the Governor in
Council, as essential to the needs of the community. In such cases:
A. an order-in-council is required;
B. a client appropriation is not immediately required for stockpiling essential materials, but the
cost of materials used must be recovered from the appropriation of the client.
ii. Stockpiling of defence supplies, which Canada deems it advisable to maintain (certain defence
supplies such as ammunition.) In such cases:
A. an order-in-council is not required;

B. although an appropriation is not immediately required for stockpiling defence supplies,
Department of National Defence (DND) must reimburse the DPRF from an appropriation
when the finished goods are delivered to DND.
C. acquisition, storage or maintenance of defence supplies. In such cases:
1. an order-in-council is not normally required;

2. a client appropriation is required.
f. Loans or advances charged to the Defence Production Loan Account (DPLA) may be used for any
purpose other than for capital assistance. When loans are involved:
i. an order-in-council is not required;

ii. although an appropriation by the client is not immediately required, the liability for any loss must
ultimately be covered from the appropriation of the client.
g. Losses sustained pursuant to a loan or an advance made against the DPLA can only be credited pursuant
to an appropriation by Parliament.
9.30 Purchases from CORCAN

(2014-11-27)
a. Correctional Service Canada (CSC) has sponsored a rehabilitation program within its institutions
designed to train inmates so that after their release, they have a better chance of obtaining employment,
based on the experience gained while in the program. This program is known as CORCAN. CORCAN
(http://www.csc-scc.gc.ca/corcan/index-eng.shtml) is a key rehabilitation program of CSC. It is mandated to
provide employment training and employability skills to offenders in federal correctional institutions in
support of the social policy of the Government of Canada.
b. From an acquisition perspective CORCAN has a dual role, one as a purchaser of goods and services that
it uses in its production and operations, and the other as a supplier of goods and services to federal
government departments, agencies and Crown corporations.

(2014-11-27)
When in receipt of a requisition for goods and services that are available from CORCAN, Public Works and
Government Services Canada (PWGSC) contracting officers, whenever possible and in recognition of the
potential benefits to Canada, will recommend to the client that CORCAN be considered as a source of supply.
The opportunity to consider acquiring goods and services from CORCAN will be promoted regardless of
whether PWGSC has issued a mandatory procurement instrument for such requirement.

(2014-11-27)
The Memorandum of Understanding between Public Works and Government Services Canada and CORCAN
(as a supplier) expired; therefore this section has been deleted from the Supply Manual. General information
about the process has been updated and is provided in section 9.30.10 Implementation.
For reference purpose only, section 9.30.5 is available in the Supply Manual Archive
9.30.10 Implementation
(2014-11-27)
a. Since acquisitions from CORCAN are considered "transfers" of goods and services between federal
organizations, they are not contracts within the meaning of the Government Contracts Regulations
(GCRs) and the Treasury Board (TB) Contracting Policy (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?
section=text&id=14494) . The procurement provisions of the trade agreements do not apply to a "transfer"
between CORCAN and the Government of Canada; these transactions are not procurements and as such
are excluded from the application of the trade agreements. Furthermore, Comprehensive Land Claims
Agreements do not apply on these transactions.
b. If a department, agency or Crown corporation is satisfied that a particular good or service offered by
CORCAN provides good value, and funds are available, then the acquisition may take place without
calling for bids and without reference to the traditional Treasury Board contract entry levels.
c. But if a department, agency or Crown corporation decides to use Public Works and Government
Services Canada, Acquisitions Branch (AB) as the contracting authority, AB internal policies apply. In
this case, even though arrangements with CORCAN are not governed by the GCRs and the TB
Contracting Policy, all existing departmental limits governing the approval of entry into and signing of
contract apply.
d. Documentation of an acquisition from CORCAN takes the form of a "Stores Transfer Order".
e. Additional information on how federal organizations can acquire goods and services directly from
CORCAN can be obtained by contacting a local CORCAN sales representative at 1-800-267-0354 or by
following the instructions provided in the Stores Transfer Guideline No. E60PQ-050000-001-PQ
(PDF Version 143 KB) (Help on File Formats) posted in the Standing Offer Index (SOI).

(2012-07-16)
The contracting officer should remind the client of its obligation to consult and accommodate and encourage the
client to undertake consultation with Aboriginal groups, where required. Please refer to section 2.16 Aboriginal
Consultation and Accommodation.
9.35 Comprehensive Land Claims Agreements (CLCAs)

(2015-09-24)
9.35.1 General information on Comprehensive Land Claims Agreements

(2017-07-01)
a. During the procurement planning stage, the contracting officer must determine whether any
Comprehensive Land Claims Agreements (CLCAs) apply, and, if so, how they will affect the
procurement strategy. The contracting officer must also ensure that the procurement file contains
adequate documentation on the measures taken to address any CLCA procurement obligations,
especially with regards to sections 9.35.25 Requirements Definition, 9.35.35 Notification of
Procurement and 9.35.45 Evaluation Criteria.
b. The federal government, represented by Aboriginal Affairs and Northern Development Canada
(AANDC), has negotiated a number of CLCAs with Aboriginal peoples. CLCAs are modern treaties
that are based on the concept of continued Aboriginal rights and title to lands traditionally used and
occupied by an Aboriginal group, which have not been dealt with by treaty or other legal means. No two
agreements are exactly the same.
c. CLCAs are law. The CLCA obligations are legally binding because they are contained in agreements
signed by Canada and backed by legislation. Furthermore, the Aboriginal rights detailed within them are
constitutionally protected under Section 35 of the Constitution Act 1982.
d. Most CLCAs include measures dealing with procurement, and although these measures are not always
identical in the various agreements, they are all aimed at enhancing economic opportunities of the
Aboriginal group benefiting from the agreement (referred to as "CLCA beneficiaries"), usually through
increased possibilities of competing successfully for contracts in their settlement areas, or of

participating in employment, training or subcontracting opportunities. Because the CLCAs are not
identical, it is important to review each applicable agreement to determine the contracting obligations.
e. Canada’s procurement obligations vary with each CLCA, but can include:
i. Separating requirements into commodity or geographic groupings, whenever practical and

consistent with sound procurement management, to permit smaller and more specialized firms to
submit bids;
ii. Notification of the procurement to the land claimant groups and/or CLCA beneficiary firms;
iii. Use of CLCA business directories/lists (refer to 9.35.60 Business Directories/Lists);
iv. Use of bid evaluation criteria to benefit CLCA beneficiaries, subject to international obligations,
and wherever practical and consistent with sound procurement management; and
v. Right of first refusal for procurements related to certain topics, e.g. archaeology, heritage, parks,
surveying (refer to 9.35.40 Right of First Refusal).
f. A procurement that is subject to CLCAs and one or more of the trade agreements may involve special
considerations (see 9.35.70 International Trade Agreements and 9.35.75 Canadian Free Trade
Agreement and Agreement on Internal Trade). Furthermore, a procurement that is subject to CLCAs but
not to any of the international trade agreements must adhere to all procurement policies applicable when
a procurement is not covered by international trade agreements, e.g. the Canadian Content Policy for
requirements over $25,000.
g. For procurements that may be subject to CLCAs, contracting officers may, after reviewing section 9.35
Comprehensive Land Claim Agreements (CLCAs), seek assistance as follows:
i. All PWGSC contracting officers, except those in Western Region may consult the Policy,
Advice and Aboriginal Considerations Division (PAACD), at telephone number 819-956-0717, or
forward enquiries to TPSGC.RCNDGAERTGSAEA-NCRABCLCAPSAB.PWGSC@tpsgc-
pwgsc.gc.ca for assistance with determining how a CLCA may affect the overall procurement
strategy. PAACD can assist contracting officers in identifying the CLCA contracting obligations
and in developing methods of meeting them on a case-by-case basis. When requesting assistance
from PAACD, contracting officers should provide the following information about their
procurements, to expedite their requests:
A. brief description of requirement;

B. final delivery location(s);
C. name of client department;
D. will the goods/services/construction be used by an aboriginal community?
E. will the procurement be set aside under the Procurement Strategy for Aboriginal Business
(see 9.40.1 Decision to Set Aside a Procurement under PSAB)?;
F. applicable trade agreements, and/or reasons for exclusion from any trade agreements;
G. type of procurement instrument, e.g. contract, standing offer, supply arrangement;
H. solicitation method (competitive or sole source);
I. method of advertising e.g. the Government Electronic Tendering Service (GETS), source
list;
J. estimated dollar value;
K. anticipated date of issuance of solicitation.
ii. PWGSC Contracting Officers in Western Region may request assistance by sending an e-mail
to the Northern Contaminated Sites Program (NCSP) at WST.SSO-CLCA@pwgsc.gc.ca.
iii. When requesting assistance from either of these divisions, contracting officers should do so as
early as possible because of the possible need to consult with others (e.g. Legal Services,
Aboriginal Affairs and Northern Development Canada, Treasury Board Secretariat) before
responding to a request.
iv. The primary sources of policy advice on CLCAs for PWGSC contracting officers are PAACD and
NCSP, as detailed above. Contracting officers should share any advice received on CLCAs from
other sources with PAACD or NCSP as appropriate, before taking any action, in order to ensure a
consistent approach to the implementation of the CLCA contracting obligations. As well, any
discrepancy in the information gathered by the contracting officer must be brought to the attention
of PAACD or NCSP. Contracting officers must document their files to include any advice
received. The approval documents should include the rationale for any key decisions.
v. An online course on Aboriginal Considerations in Procurement (#C223E) is available by visiting

the Canada School of Public Service's Campusdirect website.
9.35.5 Comprehensive Land Claims Agreements in Effect

(2013-11-06)
a. At present, there are 24 Comprehensive Land Claims Agreements (CLCAs) (including eleven which fall
under the Umbrella Final Agreement – Council for Yukon Indians (http://www.aadnc-
aandc.gc.ca/eng/1297278586814/1297278924701) ) that have been given Royal Assent and are in effect. CLCAs
affecting federal government procurement exist for areas within the Yukon, the Northwest Territories,
Nunavut, northern Quebec, and northern Labrador. Although there are CLCAs for areas within British
Columbia, they do not contain procurement obligations. There are currently no CLCAs for areas within
Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, the island of Newfoundland, Nova Scotia
or Prince Edward Island.
b. The CLCAs that are in effect are listed below along with their approximate settlement areas. Where
available, a link has been provided to the associated Treasury Board Contracting Policy Notice, which
includes an excerpt of the CLCA contracting provisions. Otherwise, a link has been provided to the full
text of the comprehensive land claims agreement on the Aboriginal Affairs and Northern Development
Canada website (http://www.ainc-inac.gc.ca/al/ldc/ccl/fagr/index-eng.asp) , along with references to the articles
regarding contracting provisions.
9.35.5.1 Quebec
(2013-11-06)
James Bay and Northern Quebec Agreement (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/97-801-eng.asp#s1)

(JBNQA) (1975), amended to include the Northeastern Quebec Agreement
(http://www.collectionscanada.gc.ca/webarchives/20071115173507/http://www.ainc-inac.gc.ca/pr/agr/que/neqa_e.html) (1978): from
the shores of James Bay and Hudson Bay to Labrador, covering approximately 50 percent of Quebec's land
mass, mainly the northern portion of the province. The JBNQA has three aboriginal signatories, representing the
Cree, Inuit and Naskapi of Quebec. The JBNQA contains conditions that apply to both the Cree and Inuit, as
well as conditions that apply solely to the Cree, conditions that apply solely to Inuit, and conditions that apply
solely to the Naskapi. The Nations map (http://www.aadnc-aandc.gc.ca/Mobile/Nations/NationsAltMap-eng.html) shows
which communities are inhabited by Cree, Inuit and Naskapi, and therefore which conditions would apply. For
communities not detailed on this map, contracting officers should seek assistance in accordance with 9.35.1 g.
Inuit Provisions:
a. James Bay and Northern Quebec Agreement (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/97-801-

eng.asp#s1) (JBNQA), section 29.0 (Inuit Economic and Social Development);
b. Agreement Respecting the Implementation of the JBNQA (PDF 337 KB) (http://www.aadnc-
aandc.gc.ca/eng/1100100030826/1100100030828) - (Help on File Formats) Annex A, Part II (Inuit Employment
and Contract Priority).
Cree Provisions: James Bay and Northern Quebec Agreement (http://www.tbs-

sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/97-801-eng.asp#s1) , section 28.10 (Cree Participation in Employment and
Contracts).
Naskapi Provisions: Northeastern Quebec Agreement

(http://www.collectionscanada.gc.ca/webarchives/20071115173507/http://www.ainc-inac.gc.ca/pr/agr/que/neqa_e.html) , Section 18 and
paragraph 20.20.
9.35.5.5 Yukon, Northwest Territories, and Nunavut

(2013-11-06)
a. The Inuvialuit Final Agreement (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/97-802-eng.asp#s2) (1984):

the islands and part of mainland along the Beaufort Sea (northwest portion of the Northwest Territories,
including western portion of Victoria Island, all of Banks Island, Prince Patrick Island in the northern
portion, and the western portion of Melville Island). Includes (but is not limited to) Aklavik, Holman,
Inuvik, Mould Bay and Tuktoyaktuk. The Gwich'in Comprehensive Land Claims Agreement also
covers Inuvik and Aklavik.
b. Gwich'in Comprehensive Land Claim Agreement (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/97-803-

eng.asp#s3) (1992): parts of northeastern Yukon and northwest portion of the Northwest Territories.
Includes (but is not limited to) Aklavik, Fort McPherson, Inuvik and Tsiigetchic. The Inuvialuit Final
Agreement also covers Inuvik and Aklavik. A Yukon Transboundary Agreement, for the Tetlit Gwich'in
claimant group, exists as Appendix C under this final agreement. Notification of procurement
opportunities for both the Gwich'in CLCA and the Yukon Transboundary Agreement must be sent to the
Gwich'in Tribal Council.
c. Nunavut Land Claims Agreement (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/97-804-eng.asp#s4)

(1993): Northern Canada - includes districts of Franklin (central Nunavut), Keewatin (south-central
Nunavut, northwest coast of Hudson's Bay area), Baffin Island (southeast portion of Nunavut) and
Ellesmere Island (northern portion of Nunavut). Includes (but is not limited to) Arctic Bay, Arviat,
Baker Lake, Bathurst Inlet, Cambridge Bay, Canadian Forces Station (CFS) Alert, Cape Dorset,
Chesterfield Inlet, Clyde River, Eureka, Gjoa Haven, Grise Fiord, Hall Beach, Igloolik, Iqaluit,
Kimmirut, Kugluktuk, Nanisivik, Pangnirtung, Pelly Bay, Pond Inlet, Qikiqtarjuaq, Rankin Inlet,
Repulse Bay, Resolute, Sanikiluaq, Taloyoak, Umingmaktok and Whale Cove.
d. Umbrella Final Agreement – Council for Yukon Indians (http://www.aadnc-

aandc.gc.ca/eng/1297278586814/1297278924701) (1993): This agreement provides a framework for the
negotiation of agreements with Yukon First Nations and has so far resulted in the eleven CLCAs listed
further below.
The general contracting obligations of each Yukon First Nation CLCA are contained in Chapter 22 –
Economic Development Measures (section 22.5.0 - Contracting), and these obligations are fully
addressed in the guidance provided within section 9.35 Comprehensive Land Claims Agreements
(CLCAs) of the Supply Manual. Access provisions are contained in Chapter 6 – Access (section 6.4.0 -
Government Access) of each Yukon First Nation CLCA.
More specific contracting obligations which apply to only certain procurements relating to special
management areas (e.g. wildlife areas, parks, historic sites), heritage resources, surveying of settlement
land boundaries or areas, or forest resources may be contained in Chapter 10 – Special Management
Areas, Chapter 13 – Heritage (section 13.12.0 – Economic Opportunities), Chapter 15 – Definition of
Boundaries and Measurement of Areas of Settlement Land (section 15.7.0 – Employment and Economic
Opportunities), and Chapter 17 – Forest Resources (section 17.14.0 - Economic Opportunities) of each
Yukon First Nation CLCA. Contracting officers with these types of procurements are encouraged to
seek assistance in accordance with 9.35.1 g.
i. First Nation of Nacho Nyak Dun Final Agreement (http://www.aadnc-

aandc.gc.ca/eng/1294431204858/1294431367517) (1995): Part of Yukon Territory covering Mayo and
Stewart Crossing.
ii. Champagne and Aishihik First Nations Final Agreement (http://www.aadnc-

aandc.gc.ca/eng/1294331836730/1294331953744) (1995): Part of Yukon Territory covering Haines
Junction, Canyon Creek and Champagne.
iii. Teslin Tlingit Council Final Agreement (http://www.aadnc-aandc.gc.ca/eng/1297212747034/1297212802068)

(1995): Part of Yukon Territory covering Teslin.
iv. Vuntut Gwitchin First Nation Final Agreement (http://www.aadnc-

aandc.gc.ca/eng/1293732501691/1293732545598) (1995): Part of Yukon Territory covering Old Crow.
v. Selkirk First Nation Final Agreement (http://www.aadnc-aandc.gc.ca/eng/1292957512644/1292957632654)

(1997): Part of Yukon Territory covering Pelly crossing.
vi. Little Salmon/Carmacks First Nation Final Agreement (http://www.aadnc-

aandc.gc.ca/eng/1294246559054/1294246659172) (1997): Part of Yukon Territory covering Carmacks.
vii. Tr'ondëk Hwëch'in Final Agreement (http://www.aadnc-aandc.gc.ca/eng/1297209099174/1297209186151)

(1998): Part of Yukon Territory covering Dawson City.
viii. Ta'an Kwach'an Council Final Agreement (http://www.aadnc-aandc.gc.ca/eng/1294693949508/1294694087971)

(2002): Part of Yukon Territory covering Whitehorse.
ix. Kluane First Nation Final Agreement (http://www.aadnc-aandc.gc.ca/eng/1294426831933/1294426963295)

(2004): Part of Yukon Territory covering Burwash Landing.
x. Kwanlin Dun First Nation Final Agreement (http://www.aadnc-

aandc.gc.ca/eng/1294416351481/1294416449299) (2005): Part of Yukon Territory covering Whitehorse.
xi. Carcross/Tagish First Nation Final Agreement (http://www.aadnc-

aandc.gc.ca/eng/1293118961162/1293119095935) (2005): Part of Yukon Territory covering Carcross and
Tagish.
e. Sahtu Dene and Metis Comprehensive Land Claim Agreement (http://www.aadnc-

aandc.gc.ca/eng/1100100031147/1100100031164) (1994) - see Chapter 12 - Economic Measures: Northwestern
part of the District of Mackenzie, including the communities of Colville Lake, Deline, Norman Wells,
Fort Good Hope, and Tulit'a.
f. Tlicho Land Claims Agreement (http://www.aadnc-aandc.gc.ca/eng/1292948193972/1292948598544) (2005) -

Appendix B of TB CPN 2006-4 (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/2006/04-eng.asp) : Part of
the Northwest Territories and part of Western Nunavut. Includes, but is not limited to, Yellowknife,
Behchoko (Rae-Edzo), Gameti (Rae Lakes), Wha Ti and Wekweti.
g. Nunavik Inuit Land Claims Agreement

(http://www.collectionscanada.gc.ca/webarchives/20071115061801/http://www.ainc-inac.gc.ca/pr/agr/nunavik/lca/index_e.html)
(2008) - see Article 13 – Government of Canada Employment and Contracts and, if applicable, Article
20 – Archaeology (Part 20.7): The settlement areas of the Eeyou Marine Region Land Claims
Agreement (EMRLCA) and the Nunavik Inuit Land Claims Agreement (NILCA) overlap and are
located within the islands and the marine waters along the Quebec shore in the James Bay and south-
eastern Hudson Bay. They are within the boundaries of the Nunavut Territory, but outside the settlement
area of the Nunavut Land Claims Agreement.
h. Eeyou Marine Region Land Claims Agreement (http://www.aadnc-aandc.gc.ca/eng/1320437343375/1320437512985)

(2011) - see Chapter 21 - Government Employment and Contracting and, if applicable, Chapter 26 –
Archaeology (section 26.8 – Employment and Contracting): The settlement areas of the EMRLCA and
the NILCA overlap and are located within the islands and the marine waters along the Quebec shore in
the James Bay and south-eastern Hudson Bay. They are within the boundaries of the Nunavut Territory,
but outside the settlement area of the Nunavut Land Claims Agreement.
9.35.5.10 British Columbia

(2013-11-06)
This section has been removed in Version 2013-7 of the Supply Manual.
9.35.5.15 Newfoundland and Labrador

(2010-01-11)
Labrador Inuit Land Claims Agreement (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/2006/04-eng.asp) (2005) -

Appendix A of TB CPN 2006-4: Part of Northeastern Quebec and part of Northern Labrador. Includes (but is
not limited to) Hopedale, Makkovik, Nain, Postville and Rigolet.
9.35.10 National Park Agreements and Department of National Defence Co-operation

Agreements
(2015-07-03)
a. Contracting officers should also be aware that a number of National Park Agreements and DND Co-
operation Agreements have been signed between individual departments and certain aboriginal groups.
These agreements, which are listed below can be found in sections 7 to 10 of TBS Contracting Policy
Notice 1997-8 (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/97-8-eng.asp) :
i. Section 7: Agreement for the Establishment of a National Park on Banks Island (http://www.tbs-
sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/97-807-eng.asp)
ii. Section 8: Tuktut Nogait National Park Agreement (http://www.tbs-

sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/97-808-eng.asp)
iii. Section 9: Co-operation Agreement between the Inuvialuit Regional Corporation and the
Department of National Defence concerning the Operation and Maintenance of the North
Warning System (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/97-809-eng.asp)
iv. Section 10: Co-operation Agreement between the Inuvialuit Regional Corporation and the
Department of National Defence concerning the Restoration and Clean-up of DEW Sites within
the Inuvialuit Settlement Region (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/97-810-eng.asp)
b. When advised by the client department, PWGSC will consider these co-operation agreements in the
procurement process.
9.35.15 Comprehensive Land Claims Agreements under Negotiation

(2013-11-06)
There are currently several Comprehensive Land Claims Agreements (CLCAs) under negotiation. The Policy,
Advice and Aboriginal Considerations Division will advise contracting officers when new CLCAs come into
effect.
9.35.20 Applicability of Comprehensive Land Claims Agreement Contracting Obligations

(2014-11-27)
a. If a procurement, or a portion thereof, includes the final delivery of goods, services, and/or construction,
for any department, agency or Crown corporation of the federal government, to locations covered by
CLCAs, then the contracting obligations of each applicable CLCA will apply to each associated portion
of the procurement. The final delivery point(s), which are not necessarily the destination addresses
detailed in the requisition, determine the applicability of a CLCA, not the origin of the requisition (i.e.
ordering office).
b. There are additional cases where the CLCA procurement obligations may apply, for example:
i. where a procurement is in support of government activities within a CLCA area; and
ii. where a procurement involves the performance of services or associated travel by the resulting
contractor within a CLCA area.
In such cases, contracting officers should seek assistance on whether CLCAs apply in accordance with
subsection g. of section 9.35.1.
c. Dollar Thresholds: A CLCA applies to any applicable procurement, regardless of dollar value.
d. Overlaps: Some CLCAs have settlement areas that overlap with the settlement areas of other CLCAs.
In these cases, the obligations of both CLCAs will apply. For example, Inuvik, Northwest Territories
(NWT) is situated within the settlement areas of both the Inuvialuit Final Agreement and the Gwich'in
CLCA, and so the contracting obligations of both CLCAs will apply to the portion of the procurement
with deliveries to Inuvik, NWT.
e. Urgent requirements must continue to be dealt with on a case-by-case basis, in a manner that is
consistent with the provisions of the applicable CLCA. For procurements that are for pressing
emergencies as defined in accordance with Treasury Board Secretariat Contracting Policy Notice 2007-4
on Non-Competitive Contracting (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/ContPolNotices/2007/0920-eng.asp) ,
contracting officers should seek assistance in accordance with subsection g. of section 9.35.1.
f. CORCAN: Procurements that are sourced through CORCAN as stores transfer orders are not subject to
CLCAs
g. Here are some examples of requirements where CLCAs would apply to the procurement:
i. Generators for delivery to Yellowknife, Northwest Territories.
ii. Food for delivery by the contractor to a non-CLCA area, for furtherance by the client department
to a CLCA area.
iii. Snowmobiles for delivery by the contractor to a non-CLCA area, where the client department
would install decals to the snowmobiles and then ship them to Kuujjuaq, Quebec.
iv. An on-line map selection solution that would allow prospectors to acquire mineral claims on
Crown lands in Nunavut, where the service would be made available to interested companies via
the internet, and the technical infrastructure and hosting environment would be located in a non-
CLCA area.
v. An aeromagnetic survey to be performed on a CLCA area, with the only tangible deliverable
being a final report to be sent to the client in a non-CLCA area.
9.35.25 Requirements Definition

(2013-11-06)
a. Under several CLCAs, the requirements definition for a procurement must, whenever it is practical and
consistent with sound procurement management:
i. avoid artificially inflated employment skills requirements (this is consistent with PWGSC's
procurement principles);
ii. give consideration to separating requirements into commodity or geographic groupings to permit
smaller and more specialized firms to submit a bid/offer/arrangement.
b. For instance, the Nunavut Land Claims Agreement states the following:
"24.4.2 In inviting bids on government contracts in the Nunavut Settlement Area, the Government
of Canada and the Territorial Government shall provide all reasonable opportunities to Inuit firms
to submit competitive bids, and, in doing so, shall take, where practicable and consistent with
sound procurement management, the following measures:
a. set the date, location, and terms and conditions for bidding so that Inuit firms may readily bid;
b. invite bids by commodity groupings to permit smaller and more specialized firms to bid;
c. permit bids for goods and services for a specified portion of a larger contract package to permit
smaller and more specialized firms to bid;
d. design construction contracts in a way so as to increase the opportunity for smaller and more
specialized firms to bid; and
e. avoid artificially inflated employment skills requirements not essential to the fulfillment of the
contract."
c. The following CLCAs also contain similar wording:
i. James Bay and Northern Quebec Agreement (Inuit portion);
ii. Sahtu Dene and Metis Comprehensive Land Claim Agreement (Implementation Plan);
iii. Labrador Inuit Land Claims Agreement;
iv. Nunavik Inuit Land Claims Agreement; and
v. Eeyou Marine Region Land Claims Agreement.
d. Contracting officers must also ensure that the procurement file contains adequate documentation on the
measures taken to address any CLCA procurement obligations related to requirements definition.
9.35.30 Access to Aboriginal-owned Lands

(2013-11-06)
Comprehensive Land Claims Agreements (CLCAs) make provisions for access to aboriginal-owned lands.
Contracting officers should encourage clients to liaise with the appropriate directorate(s) within Aboriginal
Affairs and Northern Development Canada's Implementation Branch to determine whether the location of the
contracting activity is subject to access provisions under the CLCA, and, if so, whether any access permits are
required.
9.35.35 Notification of Procurement

(2013-04-25)
a. The most common obligation is the notification of the procurement to the land claimant group(s). The
following information details the Public Works and Government Services (PWGSC) Acquisitions
Program procedures for Comprehensive Land Claims Agreements (CLCAs) notification.
b. Contracting officers must fax or e-mail a copy of a notice describing the procurement to the land
claimant group(s) listed for each of the CLCAs that apply to the procurement, as detailed in Annex 9.2
Notification of Procurement to CLCA Claimant Groups, and in accordance with the following
paragraphs:
i. Any notice that will be posted on the Government Electronic Tendering Service (GETS) must be
sent to the applicable land claimant group(s) on the date of posting and must indicate that CLCAs
apply. This procedure applies to all types of notices, for example:
A. Notices of Proposed Procurement (NPPs);
B. Advance Contract Award Notices (ACANs);
C. Letters of Interest (LOIs);
D. Price and Availability (P&A) enquiries.
ii. For procurements that will not be posted on GETS, contracting officers must send the applicable
land claimant group(s) a notice about the procurement, containing the same information that an
NPP, ACAN, LOI, or a P&A enquiry would have contained. In such cases, contracting officers
should allow the land claimant group(s) at least 15 calendar days to submit any enquiries before
awarding a contract, although the CLCAs do not specify any waiting period.
iii. Contracting officers must notify the applicable land claimant group(s) for all types of solicitation
documents, including, but not limited to, the following:
A. Request for Quotations (RFQs);
B. Requests for Proposals (RFPs);
C. Requests for Standing Offers (RFSOs);
D. Requests for Supply Arrangements (RFSAs);
E. Solicitations under Supply Arrangements; and
F. Calls for Proposals.
iv. Notification of the procurement to the land claimant group(s) is not required for individual call-
ups against a standing offer. Notification at the RFSO stage is sufficient.
9.35.40 Right of First Refusal

(2013-11-06)
a. Dependent upon the requirement, competition for a procurement may be restricted to businesses of the
applicable CLCA.
b. For example, for the Inuit portion of the James Bay and Northern Quebec Agreement, the Agreement
Respecting the Implementation of the JBNQA (http://www.aadnc-
aandc.gc.ca/eng/1100100030826/1100100030828#annexa) , Annex A (Inuit Employment and Contract Priority),
Part II states:
"8.1 Wherever practicable and consistent with sound procurement management, Canada will first solicit
bids from within the Territory."
WHERE
"3.11 "Territory" means the area in the province of Quebec north of the 55 th parallel of latitude, as
delineated in the JBNQA."
c. Furthermore, certain agreements contain a "right of first refusal" for the provision of certain
commodities, i.e., business opportunities and ventures that are contracted out with respect to Parks and
the right of first refusal to any new licenses to carry on economic activities related to wildlife and
tourism.
d. Other agreements make provisions for giving CLCA beneficiaries "first consideration or first priority"
in sourcing certain requirements, i.e., silviculture services, management of designated heritage sites, and
first consideration in providing technical and support services for contracts related to surveying the land
claims settlement area.
e. Contracting officers with CLCA procurements related to archaeology, forestry, heritage, parks, and/or
surveying should seek assistance in accordance with subsection g. of 9.35.1 General Information on
Comprehensive Land Claims Agreements.
9.35.45 Evaluation Criteria

(2013-11-06)
a. Several Comprehensive Land Claims Agreements (CLCAs) contain provisions requiring the inclusion
of socio-economic evaluation criteria in the solicitation document, subject to Canada's international
trade agreements (see 9.35.70 International Trade Agreements), and whenever it is practical and
consistent with sound procurement management. The purpose of including socio-economic evaluation
criteria is to increase the opportunities for CLCA beneficiaries to experience benefits from the
procurement such as:
i. Subcontracting to Land Claim Beneficiary Businesses
ii. Employment opportunities for Land Claim Beneficiaries
iii. Training/skills development for Land Claim Beneficiaries
iv. Existence/establishment of a supplier office location within the CLCA area
b. The document excerpts in Annex 9.3: Comprehensive Land Claims Agreements Evaluation Criteria
specifically detail that consideration of socio-economic evaluation criteria is required for the following
CLCAs:
i. James Bay and Northern Quebec Agreement - Inuit Portion
ii. Inuvialuit Final Agreement
iii. Nunavut Land Claims Agreement
iv. Sahtu Dene and Métis Comprehensive Land Claims Agreement
v. Tlicho Land Claims Agreement
vi. Nunavik Inuit Land Claims Agreement
vii. Labrador Inuit Land Claims Agreement
viii. Eeyou Marine Region Land Claims Agreement
In addition, solicitations subject to the Gwich'in Comprehensive Land Claims Agreement should include
socio-economic evaluation criteria for the Gwich'in, whenever it is practical and consistent with sound
procurement management, and subject to Canada's international trade agreements.
c. These evaluation criteria can be used as part of the assessment along with price, best value, delivery etc.
Proof of efforts and/or commitments made by suppliers should include, but not be limited to, the names
of persons or companies contacted and the nature of the undertakings at the time of the submission and
as applicable.
d. Should the contracting officer decide that it is not practical and consistent with sound procurement
management to include the CLCA evaluation criteria in a solicitation document, the contracting officer
must document the supporting factors leading to this decision on the procurement file, preferably in the
Contract Planning and Advance Approval (CPAA) document or procurement plan.
e. The CLCA evaluation criteria should also be considered in sole source negotiations in order to
maximize socio-economic opportunities for CLCA beneficiaries.
9.35.50 Methods of Solicitation

(2010-01-11)
Contracting officers must use the appropriate method of solicitation, i.e., the Government Electronic Tendering
Service (GETS), telephone-buys, source lists, facsimile distribution, newspapers, or a combination of methods.
Increased consideration should be given to advertising the procurement opportunity in local newspapers and/or
other public venues due to the remoteness of some of the areas.
9.35.55 Solicitation Period

(2010-01-11)
A longer bidding period should be considered depending on the remoteness of some of the areas.
9.35.60 Business Directories/Lists

(2010-01-11)
a. Under several CLCAs, the land claimant groups have to prepare and maintain lists of CLCA beneficiary
firms. The business directories/lists identify the types of the goods and services the firms can furnish.
b. For procurements posted on GETS, contracting officers should notify the CLCA beneficiary firms listed
for the applicable commodities, in accordance with 4.75.35 Contacting Suppliers Directly During the
Solicitation Period. For procurements not posted on GETS, contracting officers should use the firm lists
to invite CLCA beneficiaries firms to submit a bid/offer/arrangement; this must not restrict the ability of
any business, not on the list, to submit a bid/ offer/arrangement.
c. For a list of Inuit businesses for the James Bay and Northern Quebec Agreement and for the Nunavik
Inuit Land Claims Agreement, consult the Nunavik Regional and Private Business Directory (PDF 603
KB) (http://www.krg.ca/pdf/forms/NunavikBusDirectory2007.pdf) - (Help on File Formats).
d. For a list of Cree businesses for the James Bay and Northern Quebec Agreement, consult the Grand
Council of the Crees telephone directory (http://www.gcc.ca/pubs-resources.php) .
e. For a list of Inuvialuit businesses in the Inuvialuit Settlement Region, consult the Inuvialuit Business
List (http://www.irc.inuvialuit.com/corporate/ibl/) .
f. For a list of Gwich'in businesses in the Gwich'in Settlement Area, consult the Gwich'in Business
Directory.
g. For a list of Inuit businesses in the Nunavut Settlement Area, consult the Inuit Firm Registry.
h. For a list of Sahtu Dene and Metis businesses in the Sahtu Settlement Area, consult the Sahtu Business
List (http://www.sahtu.ca/webpage/1003202/1000831) .
i. For more information on Tlicho businesses, visit the Tlicho Businesses (http://www.tlicho.ca/businesses)
website.
j. "For a list of Inuit businesses in the Labrador Inuit Settlement Area, consult the Nunatsiavut
Government (http://www.nunatsiavut.com/index.php?option=com_content&view=frontpage&Itemid=1&lang=en) website,
click on "Departments", then click on "Education and Economic Development", then click on the
appropriate business categories under "Inuit Business Directory.".
9.35.65 Comprehensive Land Claims Agreements and Procurement Strategy for

Aboriginal Business
(2014-06-26)
a. Comprehensive Land Claims Agreements (CLCAs) must not be confused with the Procurement
Strategy for Aboriginal Business (PSAB). For more information on PSAB, see section 9.40
Procurement Strategy for Aboriginal Business.
b. In certain cases, a procurement subject to CLCA contracting obligations may also be set-aside under
PSAB. The procedures for both CLCAs and PSAB set-asides can be applied to the extent that the
application of a PSAB set aside does not interfere with CLCA contracting obligations. However, when
the two are in conflict, the CLCA contracting obligations take precedence, as further explained below.
c. If a procurement is subject to a CLCA and that CLCA does not include a right of first refusal, the
procurement can be reserved for aboriginal businesses across Canada under PSAB while still addressing
the CLCA contracting obligations, including any CLCA evaluation criteria.
d. The act of setting aside a procurement under PSAB does not, by itself, address the CLCA procurement
obligations. The various procurement obligations of the applicable CLCA will still have to be
considered.
e. A solicitation subject to a PSAB set-aside that addresses CLCA evaluation criteria must clearly define
what constitutes a CLCA beneficiary to avoid confusion with the definition of "aboriginal business"
under PSAB.
f. If a procurement is reserved for CLCA beneficiaries because of a right of first refusal under that CLCA,
the procurement cannot also be set-aside under PSAB. For these situations, the PSAB clauses cannot be
used or modified to implement the CLCA right of first refusal. Instead, seek assistance in accordance
with paragraph g.i. of section 9.35.1 General Information on Comprehensive Land Claims Agreements.
g. To help identify sourcing capacity under a PSAB set-aside, refer to 9.40.35 Sourcing of Requirements
under Procurement Strategy for Aboriginal Business (PSAB) Set-asides. As with all procurements,
every reasonable effort must be made to satisfy operational requirements while obtaining best value and
taking into account the principles of prudence, probity and sound contracting management.
9.35.70 International Trade Agreements

(2017-09-21)
a. Contracting officers must determine whether a procurement subject to a CLCA is also covered by an
international trade agreement (ITA), e.g., NAFTA, CETA and/or WTO-AGP. (See 1.25.5 North
American Free Trade Agreement (NAFTA), 1.25.11 Canada-European Union Comprehensive Economic
and Trade Agreement (CETA) and 1.25.10 World Trade Organization Agreement on Government
Procurement (WTO-AGP).)
b. Except for CETA, all ITAs provide for set-asides for minority businesses, e.g. Article 1.(d) of Canada's
General Notes (http://www.wto.org/english/tratop_e/gproc_e/appendices_e.htm#generalnotes) of WTO-AGP and
Article 1.(d) of Annex 1001.2b of NAFTA. However, CETA does allow for any measure for Aboriginal
business, which would include setting aside for procurement for Aboriginal business.
c. When a procurement is subject to an ITA, it can only be removed from that ITA under the provision for
set-asides for minority businesses if the procurement is reserved solely for aboriginal businesses. The
procurement is not considered to be set-aside from the ITAs under this provision if the procurement is
also open to non-aboriginal businesses. The sole fact that a procurement is subject to a CLCA does not
exempt it from the ITAs.
d. The following are the options when a procurement is subject to both a CLCA and an ITA other than
CETA:
i. If the CLCA provides the CLCA beneficiaries with a right of first refusal for the procurement, the
inclusion of that right in the procurement terms will constitute a set-aside for minority businesses
under the ITAs, such that the provisions of the ITAs do not apply to the procurement.
OR
ii. If the CLCA does not provide the CLCA beneficiaries with a right of first refusal for the
procurement, the contracting officer should encourage the client department to set aside the
procurement under PSAB. Setting aside the procurement under PSAB constitutes a set-aside for
minority businesses under the ITAs.
Under options i, and ii., the procurement is set aside from the ITAs for minority businesses and all
CLCA contracting obligations can be addressed, including any CLCA evaluation criteria.
OR
iii. If no right of first refusal for the procurement exists under the CLCA, and setting aside the
procurement under the PSAB is not practical due to the specific requirements of the procurement,
consult the Indigenous Procurement Policy and Development Division, at tpsgc.rcndgaertgsaea-
ncrabclcapsab.pwgsc@tpsgc-pwgsc.gc.ca.
9.35.75 Canadian Free Trade Agreement and Agreement on Internal Trade

(2017-07-01)
Under Article 800: Aboriginal Peoples of the Canadian Free Trade Agreement (CFTA) and Article 1802:
Aboriginal Peoples of the Agreement on Internal Trade (AIT), neither the CFTA nor the AIT apply to any
measure adopted or maintained with respect to Aboriginal peoples. There are two ways in which the CLCAs
and CFTA / AIT interact:
a. If a procurement is reserved for CLCA beneficiaries because of a right of first refusal under that CLCA,
then the contracting authority must indicate in the solicitation document and any tender notice that the
procurement is set aside from the CFTA or the AIT. In this case, the entire procurement process is not
subject to the CFTA or the AIT, and the procurement no longer falls under the jurisdiction of the
Canadian International Trade Tribunal (CITT). This situation does not eliminate the requirement to
comply with the Government Contracts Regulations; and
b. For a procurement that is subject to the CFTA or the AIT, but not to any international trade agreements,
any measure for Aboriginals, including CLCA evaluation criteria, is not subject to CITT review,
although the rest of the procurement process must be conducted in compliance with the CFTA or the
AIT provisions and is reviewable by CITT.
9.35.80 Notices on the Government Electronic Tendering Services

(2013-11-06)
a. For procurements subject to CLCAs, contracting officers must insert a statement in the notice on the
Government Electronic Tendering Service (GETS), indicating the applicable CLCAs.
For example, a notice for a procurement that is subject to the Inuvialuit Final Agreement should include
the following wording:
This procurement is subject to the Inuvialuit Final Agreement.
b. If a CLCA provides its beneficiaries with a right of first refusal for the procurement, and therefore the
procurement is reserved for those CLCA beneficiaries, then the contracting officer must insert the
following information in the GETS notice:
"This procurement is reserved for beneficiaries of the following Comprehensive Land Claims
Agreement (CLCA): _____(insert the applicable CLCA)) under _____(insert the
applicable CLCA chapter, article and paragraph numbers)."
Instruction to contracting officers: Insert the following sentence,
if applicable:
"This procurement is set aside from all the trade agreements under the provision each has that
permits the procurement to be set aside for Aboriginal business."
9.35.85 Solicitations
(2013-11-06)
a. Clauses W0001T to W0003D in Subsection 5.W of the Standard Acquisition Clauses and Conditions
(SACC) Manual, have been developed for solicitations, contracts and standing offers that involve
unspecified final delivery locations within land claims settlement areas.
b. If a CLCA provides its beneficiaries with a right of first refusal for the procurement, and therefore the
procurement is reserved for those CLCA beneficiaries, then the contracting officer must insert clause
W0005T at the beginning of the solicitation.
c. Although additional CLCA clauses are available in Subsection 5.W of the SACC Manual, contracting
officers should seek assistance with these clauses in accordance with subsection g. of 9.35.1 General
information on Comprehensive Land Claims Agreements.
9.35.90 Standing Offers, Supply Arrangements and As-and-When-Requested Contracts

(2013-11-06)
a. Methods of supply such as standing offers (SOs), supply arrangements (SAs), and as-and-when-
requested contracts are also affected by Comprehensive Land Claims Agreements (CLCAs) if any of the
resulting contracts or tasks may be subject to CLCAs. Therefore, during the procurement planning
stage, contracting officers must determine, in consultation with client departments, whether such a
method of supply will need to provide for CLCAs. Examining past, present and future needs will help
determine a solution that is of mutual benefit to Public Works and Government Services Canada supply
divisions and their client departments.
b. When such a method of supply will need to provide for CLCAs, various options exist:
i. an instrument that provides for both CLCA areas and non-CLCA areas;
ii. two streams of instruments - one for CLCA areas and one for non-CLCAs; or
iii. multiple streams for various geographic or CLCA areas.
c. If an instrument will provide for CLCAs, the applicable CLCA procurement obligations must be
addressed at the RFSO/RFSA/RFP stage of the instrument. For supply arrangements, the CLCA
procurement obligations also have to be addressed when issuing any bid solicitation under the SA that
may be subject to CLCAs.
d. During the planning stage of the method of supply, if it is determined that either no or few resulting
contracts or tasks will be subject to CLCAs, then it may be more appropriate to issue an instrument that
does not provide for CLCAs. In this case, the contracting officer must include a clear statement in the
instrument detailing that deliveries cannot be made and services cannot be performed within CLCA
settlement areas under any resulting contract or task authorization. If later on, the client has a specific
requirement that is subject to CLCAs, and no instrument exists which addressed the obligations of the
applicable CLCAs, that requirement will have to be handled as a new procurement, outside any existing
instrument.
e. Mandatory SOs/SAs: if a client's requirement is subject to CLCA contracting obligations, and no

mandatory SO/SA exists which addressed the obligations of the applicable CLCA(s), the client
department is exempted from having to use the mandatory SO/SA.
f. Furthermore, with respect to PSAB, refer to 9.40.35 c.
9.35.91 SELECT
(2014-06-26)
a. SELECT is a database of pre-approved suppliers such as architects, engineers and construction trade
contractors identified by their expertise and the services they provide. It is used by Public Works and
Government Services Canada (PWGSC) to invite suppliers to bid on real property services
procurements up to certain thresholds. SELECT provides a systematic rotation functionality that
matches the specifics of the requirement with suppliers having the required expertise that are within a
geographic range. Depending on the requirement, a supplier may be given the opportunity to accept or
decline the work, or multiple suppliers may be given the opportunity to compete the requirement.
b. As the procurement obligations of Comprehensive Land Claims Agreements (CLCAs) are not addressed
at the pre-approval stage within SELECT, they must be addressed at the solicitation stage. Therefore
when it is determined that a requirement is subject to CLCAs, and the commodity is subject to the use
of SELECT, contracting officers must choose from the following options:
i. Not use SELECT and proceed with the requirement following the process explained in section
9.35 Comprehensive Land Claims Agreements (CLCAs). The procurement file should be
documented to state that SELECT was not used as it does not address the CLCA procurement
obligations at the pre-approval stage.
or
ii. Use SELECT, refer to section 9.35 Comprehensive Land Claims Agreements (CLCAs), and
follow the more tailored process described below:
A. Requirements Definition: follow the procedures detailed in section 9.35.25 Requirements

Definition.
B. Access to Aboriginal-Owned Lands: follow the procedures detailed in section 9.35.30

Access to Aboriginal-owned Lands.
C. Inviting Suppliers to Bid: Invite bids from the list of firms generated by SELECT and the
CLCA beneficiary firm(s) listed for the applicable commodities. See section 9.35.60
Business Directories/Lists for CLCA beneficiary firm lists and for additional instructions.
D. Notification of Procurement: In accordance with section 9.35.35 Notification of

Procurement, provide notification to the claimant group(s) on the same day that the
solicitation is issued. The following information should also be included in the notification
to the claimant group(s):
"This procurement is subject to the ______________________ {indicate the
applicable CLCAs}.
The source list for this solicitation, which is a list of pre-approved suppliers, was generated
using SELECT. Suppliers that are beneficiaries of the ______________________
{indicate the applicable CLCAs} are also encouraged to bid.
A copy of the solicitation can be obtained by contacting ______________________
{indicate the contracting officer’s name} at ______________________

{indicate telephone and e-mail address}.
SELECT is a database of pre-approved suppliers such as architects, engineers and
construction trade suppliers identified by their expertise and the services they provide. It is
used by Public Works and Government Services Canada (PWGSC) to invite suppliers to
bid on real property contracting opportunities.
Firms can register at anytime by contacting the PWGSC support team at BASA-
ASSD@tpsgc-pwgsc.gc.ca or calling at 1-800-811-1148. In addition, firms can register
through the SELECT registration website."
E. Bid Evaluation Criteria: Follow the procedures described in section 9.35.45 Evaluation
Criteria. Whenever practical and consistent with sound procurement management, include
the CLCA evaluation criteria in the solicitation document. Should the contracting officer
decide that it is not practical and consistent with sound procurement management to include
the CLCA evaluation criteria, the contracting officer must document the supporting factors
leading to this decision on the procurement file.
F. Clause: The contracting officer must include the following clause in the solicitation
document and resulting contract.
"This procurement is subject to the following Comprehensive Land Claims Agreement(s)
______________________ {indicate the applicable CLCAs}."
G. Procurement Reporting: Follow the procedures described in section 9.35.95 Procurement

Reporting for Comprehensive Land Claims Agreements to ensure that reporting on
contracts subject to CLCAs is done accurately.
9.35.95 Procurement Reporting for Comprehensive Land Claims Agreements

(2013-06-27)
Contracting officers must ensure that reporting on procurements subject to Comprehensive Land Claims
Agreements is done accurately, in accordance with section 7.30.15 Comprehensive Land Claims Agreements
Reporting.

(2013-10-30)
a. In accordance with the Procurement Strategy for Aboriginal Business (PSAB) announced on March 27,
1996, requirements designated by client departments as set aside under PSAB will be restricted to
qualified Aboriginal businesses.
b. Even though a procurement is set aside under PSAB, all applicable procurement policies and procedures
must be followed.
9.40.1 Decision to Set Aside a Procurement under the Procurement Strategy for
Aboriginal Business
(2012-07-16)
a. The decision to set aside a procurement under PSAB is the responsibility of the client department.
b. There are two types of PSAB set-asides:
i. Mandatory Set-Asides:
A. It is mandatory to set aside a procurement under PSAB if an Aboriginal population is the

primary recipient or end user of the goods or services being procured and the value exceeds
$5,000, provided that operational requirements, prudence, probity, best value and sound
contracting management can be assured.
B. In order for an Aboriginal population to be the primary recipient or end user of the goods or
services being procured, delivery does not have to be directly to the Aboriginal community.
For example, goods may be delivered to a government department site and later distributed
to Aboriginal communities, groups or individuals.
C. For more information and examples of what constitute a mandatory set-aside under PSAB,
please refer to Aboriginal Affairs and Northern Development Canada's (AANDC)
interpretation bulletin (http://www.aadnc-aandc.gc.ca/eng/1100100032824) .
D. Under ARCHIVED - TBS Contracting Policy Notice 1996-2 (http://www.tbs-sct.gc.ca/pol/doc-

eng.aspx?id=13706&section=text) ,
"Aboriginal Population" means
a. an area, or community in which Aboriginal people make up at least 80 percent of the

population;
b. a group of people for whom the procurement is aimed in which Aboriginal people
make up at least 80 percent of the group.
ii. Voluntary Set-Asides: Client departments may designate any procurement as being restricted
exclusively to qualified Aboriginal suppliers. Contracting officers should assist client departments
in meeting their performance objectives under the program, by drawing their attention to
opportunities for voluntary PSAB set-asides, when qualified Aboriginal suppliers are known to
exist in the marketplace.
c. When a procurement is set aside under PSAB and no aboriginal business submitted a responsive
bid/offer/arrangement, then the solicitation must be reissued, either as a set-aside once again (after the
necessary adjustments to the solicitation have been made), or open to all bidders in accordance with the
procedures for the applicable trade agreement(s), taking into account the relevant thresholds, and all the
related applicable components, which apply to the requirement in the absence of a set-aside. This re-
solicitation process will also apply when Aboriginal bids/offers/arrangements are received but a contract
will not be awarded in order to avoid conflicting with sound contracting principles such as best value,
prudence and probity. (See 9.40.25 Sound Contracting Principles.)
d. PWGSC will not unilaterally declare a procurement set-aside under PSAB. However, following receipt
of a requisition above $5,000, for which an Aboriginal population is the primary recipient or end user,
but is not designated as a PSAB set-aside, the contracting officer should contact the client department
and identify the potential omission. If the client indicates that the procurement is not to be set aside
under PSAB, the file should be annotated accordingly, and the procurement may then proceed.
9.40.2 Obtaining Advice on the Procurement Strategy for Aboriginal Business

(2016-01-28)
a. The primary source of policy advice on the Procurement Strategy for Aboriginal Business (PSAB) for
Public Works and Government Services Canada contracting officers is the Policy, Advice and
Aboriginal Considerations Division (PAACD). Contracting officers can contact PAACD by sending an
e-mail to TPSGC.RCNDGAERTGSAEA-NCRABCLCAPSAB.PWGSC@tpsgc-pwgsc.gc.ca.
b. Contracting officers should share with PAACD any advice on PSAB received from other sources before
taking any action, in order to ensure a consistent approach to the implementation of PSAB. As well, any
discrepancy in the information gathered by the contracting officer must be brought to the attention of
PAACD. Contracting officers must document their files to include any advice received. The approval
documents should include the rationale for any key decisions.
9.40.5 Procurement Strategy for Aboriginal Business and Comprehensive Land Claims
Agreements
(2014-06-26)
Comprehensive Land Claims Agreements (CLCAs) must not be confused with the Procurement Strategy for
Aboriginal Business (PSAB). For information on CLCAs, contracting officers should consult section 9.35
Comprehensive Land Claims Agreements (CLCAs). For information on how CLCAs contracting obligations
and PSAB interrelate, refer to section 9.35.65 Comprehensive Land Claims Agreements and Procurement
Strategy for Aboriginal Business.
9.40.10 Procurement Strategy for Aboriginal Business and Trade Agreements

(2017-09-21)
a. All international trade agreements provide for set-asides for Aboriginal businesses:
i. Article 1.(d) of Canada’s General Notes

(http://www.wto.org/english/tratop_e/gproc_e/appendices_e.htm#generalnotes) of the WTO-AGP: provides for
any set-aside or measure (including offsets) as it relates to Aboriginal peoples or business;
ii. Article 1.(d) of Annex 1001.2b of the NAFTA: provides only for set-asides for small and minority
business; and
iii. Annex 19-7 (Article 2(a)) (http://www.international.gc.ca/trade-commerce/trade-agreements-accords-

commerciaux/agr-acc/ceta-aecg/text-texte/19-A.aspx?lang=eng#a7) of CETA: provides for any set-aside or
measure (including offsets) as it relates to Aboriginal peoples or business.
Therefore, a procurement set aside under the Procurement Strategy for Aboriginal Business (PSAB) is
not subject to the obligations of the international trade agreements.
b. Under Article 800: Aboriginal Peoples of the Canadian Free Trade Agreement (CFTA) and Article
1802: Aboriginal Peoples of the Agreement on Internal Trade (AIT), the CFTA and the AIT do not
apply to any measure adopted or maintained with respect to Aboriginal peoples. When the procurement
has been set aside for Aboriginal business under PSAB, the entire procurement process is not subject to
the CFTA or the AIT, and the procurement no longer falls under the jurisdiction of the Canadian
International Trade Tribunal (CITT).
c. Contracting officers must insert SACC Manual clause A3002T in bid solicitations for procurements that
have been set aside under PSAB, when the procurement would have been otherwise subject to one or
more trade agreements.
9.40.15 Procurement Strategy for Aboriginal Business and Canadian Content

(2014-03-13)
a. If the value of the procurement is equal to or greater than $25,000, PSAB and the Canadian Content
Policy will be applied simultaneously.
b. In applying the Canadian Content Policy under a set-aside procurement, it must be recognized that there
are two levels of certification. The first level of certification will be to qualify the supplier(s) as eligible
for consideration, i.e., a supplier must provide certification that it is an Aboriginal business.
c. Having established that the procurement will be conducted as a PSAB set-aside, contracting officers
must then apply the Canadian Content Policy in the same manner as any other procurement but in the
context of the Aboriginal business supplier community. Contracting officers must determine whether
there are sufficient eligible firms to carry out the procurement as solely limited (i.e., two or more
Aboriginal businesses are able to provide Canadian goods or services), conditionally limited (i.e., there
may be two or more Aboriginal suppliers of Canadian goods or services), or open (i.e., there is an
insufficient number of Aboriginal businesses able to provide Canadian goods or services; the
procurement is open to all Aboriginal businesses regardless of the origin of the goods and services
supplied). (See 3.130 Canadian Content.)
d. A bid/offer/arrangement for a set aside procurement, which includes the Canadian content provision,
must be reviewed initially to determine whether the supplier has provided the necessary certificate that
it is an Aboriginal business. Bids/offers/arrangements meeting this basic certification are then assessed
according to the stated Canadian content criteria.
9.40.20 Subcontracting Plans

(2017-09-21)
In support of PSAB, client departments may designate that a proportion of subcontracts on projects be reserved
for Aboriginal business, or that suppliers are to be encouraged through the use of incentives - e.g., additional
evaluation points to hire Aboriginal businesses as subcontractors. The inclusion of Aboriginal businesses as
subcontractors must be clearly identified in the solicitation as an evaluation criterion. This is permitted for
procurement set-asides and offsets under CETA and the WTO-AGP, although it is prohibited under NAFTA
(see section 9.40.10).
9.40.25 Sound Contracting Principles

(2010-01-11)
Fundamental to all PSAB procurements is the need to adhere to sound contracting principles. Contracting
officers must always be cognizant of the principles of best value, prudence, probity, and operational
requirements, in planning their procurement strategy for PSAB set-aside requirements.
9.40.30 Notification to Aboriginal Affairs and Northern Development Canada

(2012-07-16)
a. Upon receipt and acceptance of a requisition for a PSAB set-aside procurement, contracting officers
must inform Aboriginal Procurement and Business Promotion Directorate, Aboriginal Affairs and
Northern Development Canada (AANDC).
b. Notification to AANDC must be sent, by fax or e-mail, before the release of the solicitation, to:
Aboriginal Affairs and Northern Development Canada
Aboriginal Procurement and Business Promotion Directorate
Telephone: 1-800-400-7677
Fax: 819-956-9837
E-mail: saea-psab@aandc-aadnc.gc.ca
The notification must include the following information:
i. estimated dollar value;

ii. description of goods/services/construction;
iii. solicitation number;
iv. solicitation closing date; and
v. buyer (name, and phone/fax numbers).
In instances of sole source procurements, the notice to AANDC must also include the name and address
of the potential contractor.
c. Within 15 working days after contract award, the contracting officer must advise the Aboriginal
Procurement and Business Promotion Directorate of the name of the contractor, the contract number,
and the total estimated value of the contract.
9.40.35 Sourcing of Requirements under Procurement Strategy for Aboriginal Business

(PSAB) Set-asides
(2010-01-11)
a. Procurements set aside under PSAB may be competitive or non-competitive according to current
established government sourcing policies (see details on competitive and non-competitive at 3.10
Competitive Contracting Process and 3.15 Non-competitive Contracting Process.) Aboriginal businesses
may be invited to submit a bid/offer/arrangement in accordance with Public Works and Government
Services Canada (PWGSC) policies and procedures.
b. Vendor Information Management (VIM) of PWGSC and "SELECT" systems allow for the identification
of suppliers that have self-declared as being Aboriginal. The information in VIM and "SELECT"
collected from supplier registrations and contract awards is useful to identify potential Aboriginal
businesses for sourcing purposes, and establish source lists, regardless of commodity (goods, services,
or construction), which would be subject to rotation regimes such as Automated Vendor Rotation
System or "SELECT".
c. When issuing a solicitation for a standing offer or a supply arrangement especially for a commodity
falling under the mandatory commodities, the contracting officer should always, when feasible, solicit
for a PSAB set-aside stream to allow client departments the possibility of contracting with Aboriginal
firms if they wish to do a set-aside procurement under PSAB.
d. When creating a standing offer or supply arrangement which will include both a source list for
Aboriginal set-asides as well as a general source list, the solicitation should clearly indicate that
Aboriginal suppliers who qualify for the Aboriginal source list, standing offer or supply arrangement
will be automatically placed on the general source list, standing offer or supply arrangement if the
procurement requirements are identical. Therefore, in the case of identical requirements, it is not
necessary for Aboriginal suppliers to submit two separate bids/offers/arrangements.
e. Contracting officers may also access other sources, such as Industry Canada's Aboriginal Business
Directory for more information on Aboriginal suppliers and to identify potential Aboriginal businesses
which may be invited to submit a bid/offer/arrangement. Contracting officers may also contact
Aboriginal Procurement and Business Promotion Directorate, AANDC, directly by telephone at 1-800-
400-7677, or by e-mail at: saea-psab@aandc-aadnc.gc.ca.
f. When bids/offers/arrangements are solicited via the Government Electronic Tendering Service, notices
(Notice of Proposed Procurement [NPP] or Advanced Contract Award Notice [ACAN]) must contain
one of the following statement, prominently positioned, i.e., one of the first statements in the notice:
"This procurement has been set aside under the federal government's Procurement Strategy for
Aboriginal Business (PSAB). In order to be considered, a supplier must certify that it qualifies as an
Aboriginal business as defined under PSAB and that it will comply with all requirements of PSAB."
(NPP);
OR
"This procurement has been set-aside under the federal government's Procurement Strategy for
Aboriginal Business (PSAB). Only Aboriginal businesses as defined under PSAB are eligible to
challenge the proposed procurement strategy to award the contract to the named Aboriginal business."
(ACAN)
g. Contracting officers must ensure that for notices on GETS, the appropriate "Agreement Type" is
selected for PSAB set-asides. For example, ABE users must indicate "Set-Aside Program for Aboriginal
Business (SPAB)" in the "Trade Agreement" box of the Notice of Proposed Procurement.
9.40.40 Legal status of Aboriginal business

(2015-09-24)
The description of a business as an Aboriginal business does not affect the fact that in order to create an
enforceable contract with Canada, the contract must be signed between Canada and a legal entity, which has the
capacity to contract. In the event any uncertainty exists concerning the legal status of an Aboriginal business,
contracting officers must consult with legal counsel to ensure that the proposed contractor is capable of signing
an enforceable agreement.
9.40.45 Certification by Suppliers

(2012-07-16)
a. For each procurement under the PSAB, suppliers will be required to provide, with their
bid/offer/arrangement, a certification stating that they meet the definition of an Aboriginal business,
according to the definition provided, on the date that the bid/offer/arrangement was submitted, and an
undertaking that the business will continue to meet this definition throughout the life of the contract.
b. For a procurement subject to a PSAB set-aside, the contracting officer must insert in the solicitation, the
Standard Acquisition Clauses and Conditions (SACC) Manual clauses A3000T, M9030T or S3035T,
and A3001T, M3030T or S3036T, as appropriate. These clauses reference Annex 9.4: Requirements for
the Set-aside Program for Aboriginal Business, which sets out the definitions of an "Aboriginal
business" and an "Aboriginal person".
c. SACC Manual clauses A3000T, M9030T and S3035T contain a certification that suppliers must
complete and submit with their bid/offer/arrangement. Failure by suppliers to submit this completed
certification form with their bids/offers/arrangements will render the bid/offer/arrangement non-
responsive.
d. If a bidder/offeror/supplier has indicated in its bid/offer/arrangement that the Aboriginal business has six
or more full-time employees, the contracting officer may request, during the evaluation or after, that a
bidder/offeror/supplier submit an Owner/Employee Certification (detailed within SACC Manual clause
A3001T or M3030T or S3036T), for each owner and/or full-time employee who is Aboriginal.
e. It is not the responsibility of the contracting officer to verify the supplier's certifications. In instances
where the contracting officer questions the validity of a certification, the particulars must be referred to
Aboriginal Procurement and Business Promotion Directorate, AANDC, for audit by Audit Services
Canada (ASC). (See 9.40.50(e).)
f. Any resulting contract awarded on the basis of the supplier being Aboriginal must include SACC
Manual clause A3000C.
9.40.50 Audits of the Bidder/Offeror/Supplier Certification

(2012-07-16)
a. A bidder/offeror/supplier is required to certify in its bid/offer/arrangement that it is an Aboriginal

business, as defined under PSAB (see Annex 9.4: Requirements for the Set-aside Program for
Aboriginal Business.) The certification includes an undertaking that the business will continue to meet
the criteria, which define it as Aboriginal throughout the performance of the contract. A
bidder/offeror/supplier's certification that it is Aboriginal is subject to audit, both before and after
contract award.
b. pre-award audit is mandatory for requirements valued at $2M or more. To ensure that the mandatory
requirement for pre-auditing is met, it is essential that the contracting officer properly notify AANDC of
such requirements, as per 9.40.30(b) above, and that the two best-assessed bids/offers/arrangements be
submitted to AANDC as per 9.40.50(f). The contracting officer must not award contracts of $2M or
more until AANDC has confirmed eligibility of the proposed contractor.
c. Pre-award audits of suppliers' certifications will be conducted on a random basis for requirements under
$2M. AANDC will advise the contracting officer whether a requirement is subject to pre-award audit no
later than the date of solicitation closing (see 9.40.30(a)). Audits of suppliers' certifications are expected
to require approximately 10 working days to be completed. When timing of contract award is an issue,
this should be indicated in the notification to AANDC, so that it may determine whether the auditing
process can be expedited or the procurement excluded from the random selection.
d. Pre-award audits may be requested either by the requisitioning authority, the contracting officer, or
AANDC, whenever there is a doubt regarding the validity of bidders/offerors/suppliers' certifications,
regardless of the total estimated expenditure of the procurement.
e. When AANDC has advised that the requirement will be subject to a pre-award audit, the evaluation of
bids/offers/arrangements will continue up to the point that the two "best assessed"
bids/offers/arrangements have been identified. This information must be provided to AANDC, minus
any pricing information to undertake the pre-award audit of the bidders/offerors/suppliers' certification.
Upon receipt of the results of the audit, AANDC will advise the contracting officer. If the audit confirms
the validity of the bidders/offerors/suppliers' certifications, award of the contract may proceed. If the
audit determines that one or more of the certificates are invalid, the subject bidders/offerors/supplier(s)
whose certifications have been declared invalid must be declared non-responsive, and the next-ranked
bidder/offeror/supplier becomes the "recommended bidder/offeror/supplier". If the audit reveals that
both certifications are invalid, the next-ranked supplier's certification must be referred to AANDC for
audit until either a bid/offer/arrangement with a valid certificate is obtained, or no
bidders/offerors/suppliers remain. In the event that all bidders/offerors/suppliers are eliminated on the
basis of invalid certifications, the solicitation must be reissued, either as a set-aside once again, or not
set aside, after consultation with the client department. Whether the contract should be awarded to the
next-ranked bidder/offeror/supplier, or the solicitation reissued, is a decision that must be made on a
case-by-case basis, in keeping with sound contracting principles.
f. After contract award, the contractor's certification is subject to audit to confirm its status as an
Aboriginal business as well as to confirm that required Aboriginal content is met during the life of the
contract. (For more information on Aboriginal content, please refer to AANDC’s interpretation
bulletin.) Audits following contract award will normally be performed on a random basis, however
where contracting officers believe it to be necessary, audit of the contractor's continued status as an
Aboriginal business may be requested of AANDC.
g. If the Aboriginal business certificate is declared invalid, or if the contractor has not completed its
undertaking to continue to qualify as an Aboriginal business, it may be necessary to implement civil or
contractual remedies. Contracting officers should consult with Legal Services and Aboriginal
Procurement and Business Promotion Directorate, AANDC, in determining the appropriate action to be
taken.
9.40.55 Bid Challenge

(2010-01-11)
Bid challenges should be dealt with according to established internal supplier complaint response procedures for
procurements not subject to trade agreements.
9.40.60 Procurement Reporting for Procurement Strategy for Aboriginal Business

(2013-06-27)
Contracting officers must ensure that reporting on contracts set aside under the Procurement Strategy for
Aboriginal Business (PSAB) is done accurately, in accordance with 7.30.20 Procurement Strategy of Aboriginal
Business Reporting.
9.45 Industrial and Regional Benefits Program

(2014-03-13)
a. Competition remains the cornerstone of the Canadian government procurement process. It is the most
efficient way of achieving both the primary and secondary goals of procurement. It gives suppliers the
incentive to bring forward their best solution to the operational problem, at a competitive price, as well
as to respond more effectively to requirements in support of other national objectives. Moreover,
competition ensures that all qualified suppliers are afforded access to government contracts. To this end,
procurement initiatives in support of regional industrial development must, to the greatest extent
possible, focus on assisting Canadian firms in becoming competitive in domestic and world
marketplaces.
b. The Procurement Review Committee (PRC), in accordance with the Treasury Board (TB) Procurement
Review Policy, reviews procurement strategies for goods and services over $2,000,000. For more
information on the PRC and TB Procurement Review Policy, see 3.70 Procurement Review.
c. Collectively, Industry Canada and the regional agencies/departments are responsible for the
management of industrial and regional benefits.
d. The contracting officer is responsible for the contract in all aspects, including the contractor's
commitments to regional and industrial benefits that form part of the contract. Industry Canada
Industrial and Regional Benefits (IRB) managers are responsible for the day-to-day requirements of the
program, while the contracting officer is responsible for the management of the contract. Should there
be any failure to complete the work contracted under the IRB Program, it would fall to the remedies
section of the contract to resolve any problems. It is through this process, even though an aspect of the
contract may be managed separately, that the contracting officer must remain cognizant of the IRB
requirement working with IRB managers early in the program and throughout the delivery of the
contract.
9.50 Communication Procurement

(2011-05-16)
a. Acquisitions Branch, Public Works and Government Services Canada (PWGSC), provides all optional
and mandatory procurement services related to communications to federal departments and agencies.
b. Unlike most other mainstream PWGSC procurement divisions, the Communication Procurement
Directorate operates on cost recovery, charging a fee for its procurement services in the areas of
advertising, public opinion research, media monitoring, printing, audio-visual production (including
film, video and multi media), event management, expositions and exhibits, graphic design, planning,
writing and editing, and other communications services. The fee is based on the value of the contract,
the call-up or the work authorization, and any amendments that increase the value.
For more information on communication procurement, visit the Communication Procurement website
.

(2010-01-11)
This section provides information on the roles and responsibilities of Canadian Commercial Corporation (CCC)
and PWGSC and the Memorandum of Understanding between PWGSC and CCC.
9.55.1 General Information on Canadian Commercial Corporation Contracts

(2017-04-27)
a. The CCC is a Crown corporation of the Government of Canada and acts as Canada's international
contracting and procurement agency. CCC reports to Parliament through the Minister of International
Trade under Schedule III Part I of the Financial Administration Act.
b. The CCC work mandate is to assist in the development of trade between Canada and other countries in
areas where there is a clear role for the federal government. CCC helps foreign government buyers
benefit from Canada's export capabilities through the negotiation and execution of government-to-
government contracts. CCC accomplishes this by building unique relationships and maintaining
international contracting and procurement expertise. For more information about CCC, contracting
officers may visit the CCC (http://www.ccc.ca/en) website.
c. CCC focuses on sectors where there is a clear role for government: operating in sectors that are sensitive
or are outside of the World Trade Organizations' disciplines, such as defence, and where foreign
governments require additional capacity to undertake complex and timely procurements, namely in
emerging and developing country markets.
d. CCC offers two contracting options: by selling to foreign governments, taking on the role of prime
contractor with a Canadian-based supplier; and by buying for foreign governments, taking on the role of
a procurement agent and sourcing Canadian goods and services.
e. By agreement, the CCC is the prime contractor on all direct United States (U.S.) government contracts
(over $150,000) with Canadian-based suppliers. CCC, in turn, subcontracts with the appropriate
supplier. CCC guarantees to the U.S. government all commitments, obligations and covenants of CCC
in connection with any contract or order issued to them.
f. Acquisitions Program, PWGSC, provides contracting, contract management and other contract support
services related to CCC requirements as presented in the Memorandum of Understanding (MOU) signed
between CCC and PWGSC, a copy of which is held by PWGSC’s Price Support Directorate (PSD).
9.55.5 Subcontracting
(2017-04-27)
This section was removed from the Supply Manual as a result of a review of sections referencing the Canadian
Commercial Corporation (CCC). For reference purposes, section 9.55.5 is available in the Supply Manual
Archive (http://www.gcpedia.gc.ca/wiki/Supply_Manual_Archive) , version 2016-2.

(2017-04-27)
CCC requirements must be carried out in accordance with the Memorandum of Understanding (MOU) signed
between PWGSC and CCC, which outlines the services to be provided by PWGSC and the responsibilities of
both organizations. A copy of the latest version of the MOU is held by PWGSC’s Price Support Directorate
(PSD).
9.55.15 Certification and Signing Authorities

(2017-04-27)
Specific certification and signing authorities apply to CCC contracting documents. For more information, refer
to 6.4.2. Annex: Contracting Limits including Exceptional Authorities and the Miscellaneous Approval and
Signing Authority Limits pertaining to CCC
(http://www.gcpedia.gc.ca/wiki/Contracting_limits_and_related_notes#Miscellaneous_Approval_and_Signing_Authority_Limits) on
GCpedia.
9.56 Price certifications and audits of foreign contractors

(2017-10-24)
a. Canada has agreements in place with several North Atlantic Treaty Organization (NATO) allied
governments to conduct price certifications of foreign contractors or subcontractors tied to non-
competitive contracts. Price certification services include the review of contractor proposals,
subcontractor efforts and the execution of assurance engagements (cost audits). Contracting officers
should consider requesting these services from the foreign government of the contractor, subcontractor
or supplier's country to ensure that prices paid, or proposed to be charged to the Government of Canada
are considered to be fair and reasonable. The determination provided by the foreign government is based
on that government's policies, procedures and accounting standards.
b. For price proposal certifications, the proposal must be either non-competitive (as defined in section
3.15 Non-competitive contracting process of the Supply Manual), one responsive bid submitted in
response to a competitive tender (as defined in section 5.70 One responsive bid of the Supply Manual),
or an amendment to a competitively-awarded contract.
c. Forms and guidance on requesting these services are accessible on GCDOCS . All inquiries on this
service are to be directed to the PWGSC Price Certification Coordinator in the Price Support
Directorate (PSD) at the following e-mail address: PWGSC.appricecertification-

pacertificationdeprix.TPSGC@pwgsc-tpsgc.gc.ca.
d. Price certifications provided by the foreign government are generally in the form of a high-level report,
and may be treated as though they are the opinion of the Government of Canada.
9.60 Public–Private Partnership (P3) procurements

(2016-01-28)
a. A Public-Private Partnership (P3) is defined as a long-term contractual relationship between a public

authority and the private sector that involves the following:
i. Provision of goods or services to meet a defined output specification (i.e. defining what is
required, rather than how it is to be done);
ii. Integration of multiple project phases (e.g. design, construction, finances, operations);
iii. Transfer of certain level of risk to the private sector, which is anchored with private sector capital
at risk; and
iv. A performance-based payment mechanism.
b. Budget 2011 presented the Government desire for Canada to be a leader in P3. The Budget introduced
new measures that made it mandatory for departments and agencies to evaluate the feasibility of
delivering infrastructure projects through a P3 procurement approach. Specifically Budget 2011 states:
"Going forward, federal departments and agencies will be required to evaluate the potential for using a
P3 for large federal capital projects. All infrastructure projects creating an asset with a lifespan of at
least 20 years and having a capital cost of $100 million or more, will be subjected to a P3 Screen to
determine whether a P3 may be a suitable procurement option. Should the assessment conclude that
there is P3 potential, the procuring department will be required to develop a P3 proposal among possible
procurement options."
c. Furthermore, Budget 2011 also encourages federal organizations to explore the possibility of using the
P3 procurement approach for other types of projects, such as information technology (IT) infrastructure
projects. This therefore compels federal departments and agencies to consider the use of P3s in all
procurement projects, including those with capital costs less than $100 million dollars or with a lifespan
of less than 20 years.
d. Innovative practices, such as P3s, should be considered in options explored to source a project. Practices
could include, for example, the bundling of smaller planned projects.
e. Supporting resources: More information on the concept of P3s and how it has worked in the Canadian
federal context can be found in the Report on the State of Comptrollership in the Government of Canada
(http://www.tbs-sct.gc.ca/fm-gf/reports-rapports/rsc-rfc/2012/rsc-rfcsb05-eng.asp) . The Standing Committee on
Government Operations and Estimates has produced a report on P3s titled Public-Private Partnerships:
A Tool in The Tool Box (http://www.parl.gc.ca/HousePublications/Publication.aspx?
DocId=6027931&Language=E&Mode=1&Parl=41&Ses=1) , and Treasury Board has issued a Guideline to
Implementing Budget 2011 Direction on Public-Private Partnerships (http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?
id=25576&section=text) .
9.60.5 Public–Private Partnerships delivery models

(2016-01-28)
a. Public–Private Partnerships (P3s) can take a number of different forms based on client needs,
availability of funding, expertise available, risks associated and strategic considerations. The project
urgency and timeline may also impact the form of the P3.
b. The P3 delivery models are:
i. Design-Build-Finance (DBF);
ii. Design-Build-Finance-Maintain (DBFM);
iii. Design-Build-Finance-Operate (DBFO); or
iv. Design-Build-Finance-Operate-Maintain (DBFOM).
c. Using the DBF delivery model, the private sector is responsible for designing, building, and financing
the construction.
d. Using the other P3 delivery models, the private sector designs, builds, finances, maintains and possibly
operates the asset(s) to predetermined output specifications.
e. Unlike traditional procurement methods, where Canada funds projects internally and awards separate
contracts to one or more firms for the design, construction, operation and maintenance, P3s draw upon
private sector financing and are governed by a single performance-based contract called a project
agreement that integrates the above models.
9.60.10 Federal roles and responsibilities in Public–Private Partnerships

(2016-01-28)
a. Treasury Board Secretariat (TBS): TBS officials have both a challenge and advisory role on relevant
supporting documentation such as the P3 Screen, risk analysis and Value for Money (VFM) analysis.
b. PPP Canada Inc.: In 2008, the Government of Canada established PPP Canada Inc., a federal Crown
corporation, to advance federal efforts to increase the effective use of P3s in Canada. PPP Canada Inc.'s
role is to provide advice and expertise to departments and agencies regarding P3s. It has also developed
many tools in support of P3 project planning and assessment activities.
c. Public Works and Government Services Canada (PWGSC): For PWGSC projects, the Department is
accountable for project screening, options analysis and the procurement process. PWGSC is also
responsible for recommending the most appropriate delivery model for each PWGSC initiative. While
benefit can be derived from the advice of external experts, including PPP Canada Inc., accountability
remains with PWGSC.
i. Real Property Branch (RPB) – P3 Development and Advisory Services, P3 National Center of
Expertise (P3 NCOE):
A. The P3 NCOE's role is to provide PWGSC with expertise, advice and functional guidance
to fully assess, and as required, develop P3 projects.
B. Where RPB is the project authority, involvement of the P3 NCOE is mandatory.
C. Where Acquisitions Program is the procurement authority on behalf of another department

or agency, the involvement of the P3 NCOE is optional (joint client and operational sector's
decision).
D. For projects originating within RPB, third party financial analysis (i.e., VFM) will be
validated according to existing RPB procedures.
E. For PWGSC projects outside of RPB, validation of financial analysis, if required, may be
done by using a third party consultant.
F. Supporting resources can be found in the Directive on Real Property Branch Obligations to
Consider Public-Private Partnerships .
ii. Acquisitions Program (AP)
A. As the common service provider for acquisition services, AP will act as the procurement
authority for client departments' projects that are over their delegated authority as it would
for any other procurement method.
B. AP's involvement should start early in the planning of P3 procurements.
C. Other government departments are responsible for their choice of procurement method and
supporting analysis, however, should AP be identified as the procurement authority,
validation of financial analysis must be confirmed.
9.60.15 Public–Private Partnership screening

(2016-01-28)
a. The Public–Private Partnership (P3) screen forms a part of the early process of narrowing the options.
Once the requirement has been identified, organizations can determine whether a P3 is a viable option
for further consideration. It is important to screen early to ensure that the activities through the planning
process are appropriate.
b. PPP Canada Inc. has developed a P3 Screening Matrix (http://www.p3canada.ca/en/about-p3s/p3-resource-

library/federal-screening-matrix/) and supporting guide (http://www.p3canada.ca/en/about-p3s/p3-resource-
library/identifying-p3-potential-a-guide-for-federal-departments-and-agencies/) that must be used by departments and
agencies when the project meets Budget 2011 criteria. Considerations that are explored through the P3
screen include, but are not limited to the following:
i. private sector interest and capacity;
ii. asset characteristics and size;
iii. time horizon;
iv. public acceptance or interest;
v. opportunity to transfer risk;
vi. performance specifications;
vii. innovation;
viii. organizational capacity;
ix. financial or funding considerations.
9.60.20 Value for money

(2016-01-28)
a. In the Government of Canada, Public–Private Partnerships (P3s) are governed by various Treasury
Board policies and their associated standards and directives. Ensuring value for money in the
management of assets and acquired services is a guiding principle of the framework and its associated
policy instruments.
b. Deputy heads are accountable for ensuring that proper due diligence is conducted and that investment
decisions demonstrate value for money in line with the principles outlined in Treasury Board policies
c. Once a P3 has been identified as a potential procurement method for further considerations through the
P3 screen, value for money will be the determining factor for selecting the preferred method.
d. Value for money analysis essentially represents a risk-adjusted comparison of the costs and benefits of
different investment options. It is an iterative process that takes place throughout the initial planning and
identification and project definition stages of the planning process. This analysis is based on significant
input from the project team and client who are most familiar with Government of Canada and project-
specific requirements.
e. Internal and external specialty subject matter experts with financial or technical knowledge and
experience are best positioned to support an objective assessment and consideration of current market
trends.
f. The decision as to whether or not to proceed with a P3 considers the analysis of program requirements,
strategic considerations as well as project-specific qualitative, quantitative, and risk factors.
g. The recommendation to proceed or not with a P3 is prepared by Government of Canada officials, taking
into consideration input from internal and external subject matter experts.
9.60.25 Stages in Public–Private Partnership procurement process

(2016-01-28)
a. Even though it is important for Public Works and Government Services' Acquisitions Program (AP) to
be involved early in the process, many of the steps set out below would have already been processed by
the client prior to AP receiving the requisition. Since each project has different objectives and timelines,
some of these steps may need to be modified accordingly.
b. Before using a Public-Private Partnership (P3) screen or undertaking any analysis of options,
departments and agencies should ensure that the organizational needs have been clearly defined. A
needs analysis and a preliminary options analysis are also to be included as part of the business case.
c. Treasury Board Secretariat views P3s as having the following stages:
i. Initial Planning and Identification
A. Preplanning
Needs analysis
Feasibility analysis
P3 screening
Decision Point – P3 identified as a potential option through screen
B. Options Analysis
Potential indication of market interest or issue a Request For Interest
Project complexity and risk assessment
Business Case
Preliminary value for money analysis
Decision Point – P3 identified as preferred option in the initial value for money
analysis
Analysis of advisory service requirements
Develop project schedule
Develop project charter
Plan for competitive process
ii. Project Definition

Develop output specifications
Develop project agreement
Develop payment mechanism
Develop competitive process documents
Update value for money analysis
iii. Project implementation
A. Competitive Process
Issue request for qualifications
Issue request for proposals to qualified bidders
Engage in collaborative dialogue with bidders
Refine project agreement accordingly
Proposal evaluation
Recommendation of selected proposal
Revise value for money analysis with selected proposal information
Decision point – P3 identified as preferred option through updated value for money
analysis.
B. Implementation
Finalize offer with selected bidder
Financial close
Partners enter into contract
Design, construct, and commission
Contract management and monitoring
9.60.30 Public–Private Partnership procurements - Key differences

(2016-01-28)
If a Public–Private Partnership (P3) is chosen as the preferred delivery option, many of the steps in a typical
procurement process are undertaken. This includes a Request for Qualification (RFQ), Request for Proposal
(RFP) and response and proposal evaluations. Consideration should also be given to issuing a Letter of Interest
(LOI) or a Request for Information (RFI). Information sessions, Industry Engagement activities and site visits
will most likely be required. However, some elements of the P3 process may differ from traditional procurement
processes, for example:
a. A short list of qualified bidders is often established as a result of the RFQ. Limiting the procurement
process to only qualified bidders will require the proper approvals (as part of the procurement plan).
b. Emphasis is given to output-based specifications/requirements.
c. An honorarium can be provided to the unsuccessful bidders who submitted a compliant bid at the RFP
stage. This is subject to approvals (as part of the procurement plan).
d. Proposals can be brought by consortia made up of different private sector firms rather than an individual
company. The consortia often have international, national and local representation.
e. Proposals are traditionally based on high-level designs rather than the completed designs found in
traditional procurement.
f. Commercially confidential meetings involve many face-to-face sessions with each pre-qualified
consortium. These meetings help ensure that the public sector's needs are well understood. Due
diligence must be carried out to ensure information is released simultaneously to all involved parties.
These meetings are typically overseen by a Fairness Monitor.
g. Given their complexity, P3s require significant involvement of third-party advisors.
i. The P3 National Center of Expertise can assist in obtaining support for Real Property Branch
projects and other related projects.
ii. Within the Acquisition Branch, the Contract Cost Analysis, Audit and Policy Directorate should
be involved in any P3 project discussion regarding an RFQ bidder's financial capacity evaluation.
h. There is a single project agreement that integrates phases of the project (design, build, finance,
operations and maintenance) over a 25-30 year period. A draft project agreement is included as part of
the RFP and refined with the private sector's input during the procurement process.
i. Procurement is completed upon the successful bidder achieving financial close and subsequent signing
of the project agreement. The next phase is traditionally the simultaneous design and construction,
which paves the way for subsequent phases such as operation, occupation or delivery for the duration of
the project agreement.
9.60.35 Public–Private Partnership Treasury Board approvals

(2016-01-28)
a. Public–Private Partnerships (P3s) may require a variety of Treasury Board (TB) approvals, including
project approval, expenditure authority, contract approval, and the authority to enter into a real property
transaction.
b. These approvals depending on their particular details may be requested through TB submissions.
c. Treasury Board Secretariat should be consulted early in the planning process and regular meetings
should be scheduled with central agencies to identify the authorities required, to seek advice, and
explain the complexities of the project.
d. It should be noted that in the process of reviewing TB submissions, the Secretariat monitors policy
compliance and may request supporting information from departments and agencies accordingly.
9.60.40 Public–Private Partnership project team

(2016-01-28)
a. The size and magnitude of Public-Private Partnerships require a multitude of public sector skill sets.
Subject matter experts from the public sector are supported by a range of private sector experts (i.e.,
legal, financial, procurement, fairness/integrity and technical advisors).
b. Typically, a dedicated team is brought together to coordinate all project activities, including planning,
developing performance specifications, communications, procurement as well as oversight during
design and construction.
c. A dedicated project team should be composed at the on-set of the project approval, with clearly defined
roles and responsibilities for each team member.
d. Experts from the private sector can form part of this team and should this be the case, a confidentiality
agreement must be part of the working team agreement.
9.60.45 Payments in Public–Private Partnerships

(2016-01-28)
a. Depending on the Public–Private Partnership (P3) project, the government may not issue any payments
until the project is completed and certified by an independent certifier.
b. Another approach is to provide milestone payments.
c. In a P3, it is the private sector's responsibility to secure financing; this is often a combination of debt
and equity financing.
d. Once the asset is ready for use or the service has been delivered to a level of certified satisfaction, the
government initiates payment to the private partner, as outlined in the project agreement.
e. Payments may be subject to a holdback provision or liquidated damages (penalties) should the private
partner not fully meet the obligations as outlined in the project agreement's predetermined performance
specifications.
f. For long term projects where operations and maintenance are an integral part of the project, payments
are usually made on a monthly or quarterly basis, following in-service commencement, over the term of
the Agreement.
Annex 9.1: Memorandum of Understanding Between Public Works and Government

Services Canada and CORCAN
(2014-11-27)
The Memorandum of Understanding between Public Works and Government Services Canada and CORCAN
(as a supplier) expired; therefore this section has been deleted from the Supply Manual. General information
about the process has been updated and is provided in section 9.30.10 Implementation.
For reference purpose only, Annex 9.1 is available in the Supply Manual Archive
Annex 9.2: Notification of Procurement to Comprehensive Land Claims Agreement

Claimant Groups
(2016-01-28)
(See 9.35.35 Notification of Procurement)
James Bay and Northern Quebec Agreement (JBNQA)
INUIT PORTION OF JBNQA

Makivik Corporation
1111 Dr. Frederik-Philips Blvd., 3rd Floor
St-Laurent, QC H4M 2X6
Telephone: 514-745-8880
Facsimile: 514-745-3700
Makivik Corporation
P.O. Box 179
Kuujjuaq, QC J0M 1C0
Telephone: 819-964-2925
Facsimile: 819-964-0458
CREE PORTION OF JBNQA

Crees of Oujé-Bougoumou
203 Opemiska Meskino, Box 1165
Oujé-Bougoumou, QC G0W 3C0
Attention: Economic Development Officer
Telephone: 418-745-2519
Facsimile: 418-745-3544
Grand Council of the Crees (of Québec)

81 Metcalfe Street, suite 900
Ottawa, ON K1P 6K7
Telephone: 613-761-1655
Facsimile: 613-761-1388
NASKAPI PORTION OF JBNQA

Naskapi Development Corporation
120-1000 St-Jean-Baptiste Avenue
P.O. Box 5023
Kawawachikamach, QC G2E 5G5

Telephone: 418-871-5100
Facsimile: 418-871-5254
Naskapi Nation of Kawawachikamach

P.O. Box 5111
Kawawachikamach, QC G0G 2Z0
Telephone: 418-585-2686
Facsimile: 418-585-3130
Inuvialuit Final Agreement

Inuvialuit Development Corporation
3rd Floor, Inuvialuit Corporate Centre
107 MacKenzie Road
P.O. Bag # 7
Inuvik, NT X0E 0T0
Telephone: 867-777-7000
Facsimile: 867-777-3256
email: info@inuvialuit.com
Gwich'in Comprehensive Land Claim Agreement

Gwich'in Tribal Council
P.O. Box 1509
Inuvik, NT X0E 0T0
Telephone: 867-777-7900
Facsimile: 867-777-7919
Nunavut Land Claims Agreement

Nunavut Tunngavik Incorporated
Policy and Planning Division
P.O. Box 638
Iqaluit, NU X0A 0H0
Telephone: 1-888-646-0006
Facsimile: 867-975-4949
Qikiqtani Inuit Association

P.O. Box 1340
Iqaluit, NU X0A 0H0
Telephone: 867-975-8400 or 1-800-667-2742
Facsimile: 867-979-3238
email: info@qia.ca
Qikiqtaaluk Corporation
P.O. Box 1228
Iqaluit, NU X0A 0H0
Telephone: 867-979-8400
Facsimile: 867-979-8433
Kakivak Association
P.O. Box 1419
Iqaluit, NU X0A 0H0
Telephone: 867-979-0911 or 1-800-561-0911
Email: info@kakivak.ca (Note: Notifications to be sent by e-mail only)
Kivalliq Inuit Association

P.O. Box 340
Rankin Inlet, NU X0C 0G0
Telephone: 867-645-5725 or 1-800-220-6581
Email: reception@kivalliqinuit.ca (Note: Notifications to be sent by e-mail only)
Sakku Investments Corporation

P.O. Box 188
Rankin Inlet, NU X0C 0G0
Telephone: 867-645-2805
Facsimile: 867-645-2063
Nunasi Corporation
P.O. Box 1559
Iqaluit, NU X0A 0H0
Telephone: 867-979-2175 or 867-979-2160
Facsimile: (867) 979-3099 (Note: Notification by email is preferred)
email: malaya@nunasi.com
Kitikmeot Inuit Association

Lands Division
P.O. Box 360
Kugluktuk, NU X0B 0E0
Telephone: 867-982-3310
Facsimile: 867-982-3311
Umbrella Final Agreement of the Council for Yukon Indians

Council of Yukon First Nations

2166 – 2nd Avenue
Whitehorse, YT Y1A 4P1
Telephone: 867-393-9200
Facsimile: 867-668-6577
email: reception@cyfn.net
Champagne and Aishihik First Nations Final Agreement

Champagne and Aishihik First Nations
Box 5310
Haines Junction, YT Y0B 1L0
Telephone: 867-634-4200
Facsimile: 867-634-2108
email: vinnes@cafn.ca
Little Salmon/Carmacks First Nation Final Agreement

Little Salmon/Carmacks First Nation
P.O. Box 135
Carmacks, YT Y0B 1C0
Telephone: 867-863-5576
Facsimile: 867-863-5710
email: info@lscfn.ca
First Nation of Nacho Nyak Dun Final Agreement

Nacho Nyak Dun First Nation
P.O. Box 220
Mayo, YT Y0B 1M0
Telephone: 867-996-2265
Facsimile: 867-996-2267
email: main@nndfn.com
Selkirk First Nation Final Agreement

Selkirk First Nation
P.O. Box 40
Pelly Crossing, YT Y0B 1P0
Attn: Betty Baptiste, Personnel Officer
Telephone: 867-537-3331
Facsimile: 867-537-3902
email: GillB@selkirkfn.com
Teslin Tlingit Council Final Agreement

Teslin Tlingit Council
Box 133
Teslin, YT Y0A 1B0
Telephone: 867-390-2532
Facsimile: 867-390-2204
email: admin@ttc-teslin.com
Vuntut Gwitchin First Nation Final Agreement

Vuntut Gwitchin First Nation
P.O. Box 94
Old Crow, YT Y0B 1N0
Telephone: 867-966-3261
Facsimile: 867-966-3800
email: reception@vgfn.net
Tr'ondëk Hwëch'in Final Agreement

Tr'ondëk Hwëch'in First Nation
P.O. Box 599
Dawson City, YT Y0B 1G0
Telephone: 867-993-7100
Facsimile: 867-993-6553
email: reception@trondek.ca
Ta'an Kwach'an Council Final Agreement

Mundessa Development Corporation
117 Industrial Road
Whitehorse, YT Y1A 2T8
Telephone: 867-668-3613
Facsimile: 867-667-4295
email: admin@taan.ca
Kluane First Nation Final Agreement
Kluane First Nation

P.O. Box 20
Burwash Landing, YT Y0B 1V0
Telephone: 867-841-4274
Facsimile: 867-841-5900
email: reception@kfn.ca
Kwanlin Dun First Nation Final Agreement

Kwanlin Dun First Nation
35 McIntyre Drive
Whitehorse, YT Y1A 5A5
Telephone: 867-633-7800
Facsimile: 867-668-5057
email: reception@kwanlindun.com
Carcross/Tagish First Nation Final Agreement

Carcross/Tagish First Nation
P.O. Box 130
Carcross, YT Y0B 1B0
Telephone: 867-821-4251
Facsimile: 867-821-4802
email: reception@ctfn.ca
Sahtu Dene and Metis Comprehensive Land Claim Agreement

Déline District Land Corporation
P.O. Box 156
Déline, NT X0E 0G0
Attention: Christine Firth
Telephone: 867-589-8100
Facsimile: 867-589-8101
email: dlc_executivedirector@gov.deline.ca
K’asho Gotine District Land Corporation

P.O. Box 18
Fort Good Hope, NT X0E 0H0
Attention: Jacinta Grandjambe
Telephone: 867-598-2519
Facsimile: 867-598-2437
email: jacintag@yamoga.ca
Sahtu Secretariat Incorporated

P.O. Box 155
Déline, NT X0E 0G0
Attention: Ruth Ann Elemie, Executive Director
Telephone: 867-589-4719
Facsimile: 867-589-4908
email: ruth_ann_elemie@gov.deline.ca
Tulita District Land Corporation

P.O. Box 63
Tulita, NT X0E 0K0
Attention: Judith Wright Bird, Executive Director
Telephone: 867-588-3734
Facsimile: 867-588-4025
email: jwright@tulitalandcorp.ca
Labrador Inuit Land Claims Agreement

Nunatsiavut Government
12 Sandbanks Road
P.O. Box 70
Nain, NL A0P 1L0
Telephone: 709-922-2942
Facsimile: 709-922-2931
Tlicho Land Claims Agreement

Tlicho Government
P.O. Box 412
Behchoko, NT X0E 0Y0
Telephone: 867-392-6381
Facsimile: 867-392-6389
Nunavik Inuit Land Claims Agreement

Makivik Corporation
1111 Dr. Frederik-Philips Blvd., 3rd Floor
St-Laurent, QC H4M 2X6
Telephone: 514-745-8880
Facsimile: 514-745-3700
Makivik Corporation
P.O. Box 179
Kuujjuaq, QC J0M 1C0
Telephone: 819-964-2925
Facsimile: 819-964-0458
Annex 9.3: Comprehensive Land Claims Agreements Evaluation Criteria

(2013-11-06)
(See 9.35.45 Evaluation Criteria)
1. James Bay and Northern Quebec Agreement (JBNQA)- Inuit Portion

The Agreement Respecting the Implementation of the JBNQA (http://www.aadnc-aandc.gc.ca/eng/1100100030826)
, Annex A, Part II (Inuit Employment and Contract Priority) Article 7.0 states,
"Whenever practicable and consistent with sound procurement management, all of the following
criteria, or as many as may be appropriate with respect to any particular government contract, shall be
included in the bid evaluation criteria established by Canada for the awarding of government contracts
in the Territory:
a. the contribution by Inuit in carrying out the contract, which will include, but shall not be limited
to, the employment of Inuit labour, the engagement of Inuit professional services or the use of
Inuit suppliers;
b. the existence or creation of permanent head offices, administrative offices or other facilities in the
Territory; and,
c. the undertaking of commitments, under the contract, with respect to on-the-job training or skills
development for the Inuit."
2. Inuvialuit Final Agreement

Treasury Board Contracting Policy Notice 1997-8 (http://www.tbs-sct.gc.ca/Pubs_pol/dcgpubs/ContPolNotices/97-8-
eng.asp) , Section 2, paragraph 6.00 states:
"When establishing bid evaluation criteria for the awarding of government contracts, and whenever
practicable and consistent with sound procurement management, contracting authorities should consider
the potential contribution of the Inuvialuit in carrying out the contract. This may include, as appropriate:
a. the employment of Inuvialuit, the engagement of Inuvialuit professional services and the use of
Inuvialuit suppliers,
b. the creation of administrative offices or other facilities in the Inuvialuit Settlement Region,
c. the undertaking of commitments, under the contract, with respect to related on-the-job training or
skills development for Inuvialuit."
3. Nunavut Land Claims Agreement

Article 24.6.1 of the Nunavut Land Claims Agreement (http://www.tbs-
sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/97-804-eng.asp#s4) states,
"Whenever practicable, and consistent with sound procurement management, and subject to Canada's
international obligations, all of the following criteria, or as many as may be appropriate with respect to
any particular contract, shall be included in the bid criteria established by the Government of Canada for
the awarding of its government contracts in the Nunavut Settlement Area:
a. the existence of head offices, administrative offices or Other facilities in the Nunavut Settlement
Area;
b. the employment of Inuit labour, engagement of Inuit professional services, or use of suppliers that
are Inuit or Inuit firms in carrying out the contracts; or
development for Inuit."
4. Sahtu Dene and Métis Comprehensive Land Claims Agreement

The Implementation Plan for the Sahtu Dene and Metis Comprehensive Land Claim Agreement
(http://www.collectionscanada.gc.ca/webarchives/20071115143813/http://www.ainc-inac.gc.ca/pr/agr/sahtu/sahip_e.html) ,
Annex A, Project 12-3 states:
"Whenever practicable and consistent with sound procurement management, and subject to Canada's
any particular contract, shall be included in the bid criteria for the awarding of government contracts in
the Sahtu settlement area:
a. the existence or creation of head offices, administrative offices or other facilities in the Sahtu
settlement area;
b. the employment of participants labour, engagement of participants professional services, or use of

suppliers that are participants or Sahtu Dene and Metis firms in carrying out the contract; or
development for the participants."
5. Tlicho Land Claims Agreement

The Tlicho Agreement Implementation Plan
(http://www.collectionscanada.gc.ca/webarchives/20061209084435/http://ainc-inac.gc.ca/pr/agr/nwts/timp_e.html) , Annex A,
Sheet 26-3, Article 2, Planning Assumptions, states:
"In order to stimulate socio-economic benefits through the procurement process, and whenever
practicable and consistent with sound procurement practices, and subject to Canada's international
obligations, all of the following criteria, or as many as may be appropriate with respect to any particular
contract, shall be included in the bid evaluation criteria for the awarding of government contracts which
are wholly or partly in Môwhì Gogha Dè Nîîtåèè (NWT):
a. the inclusion of an Aboriginal Benefits Plan which will assist with socio-economic development
projects which are wholly or partly in Môwhì Gogha Dè Nîîtåèè (NWT); or
b. the employment of Tlicho First Nation labour, engagement of Tlicho First Nation professional
services, or use of suppliers that are Tlicho which can act as sub-contractors in assisting with the
carrying out of the contract; or
development for Tlicho Citizens."
6. Nunavik Inuit Land Claims Agreement

Article 13.3.4 of the Nunavik Inuit Land Claims Agreement
(http://www.collectionscanada.gc.ca/webarchives/20071115061801/http://www.ainc-inac.gc.ca/pr/agr/nunavik/lca/index_e.html)
states,
any particular contract, shall be included in the bid criteria established by the Government of Canada for
the awarding of its government contracts for the procurement of goods and services in the Nunavik
Marine Region (NMR):
a. the existence of head offices, administrative offices or other facilities in the NMR;
b. the employment of Nunavik Inuit labour, engagement of Nunavik Inuit professional services, or
use of suppliers that are Nunavik Inuit or Nunavik Inuit enterprises in carrying out the contracts;
and
development for Nunavik Inuit."
7. Labrador Inuit Land Claims Agreement

Article 7.10.4 of the Labrador Inuit Land Claims Agreement (http://www.tbs-
sct.gc.ca/pubs_pol/dcgpubs/contpolnotices/2006/04-eng.asp) states,
"Whenever practicable and consistent with sound procurement practices, and subject to Canada's
international obligations, the following criteria, or as many as may be appropriate with respect to any
particular contract, shall be included in the bid criteria established by the Government of Canada for the
awarding of Government of Canada contracts for the procurement of goods and services in the Labrador
Inuit Settlement Area:
a. the existence of the head office, administrative offices or other facilities in the Labrador Inuit
Settlement Area;
b. the employment of Inuit labour, engagement of Inuit professional services or use of suppliers that
are Inuit Businesses in carrying out the contracts; and
c. the undertaking of commitments, under the contract, with respect to on the job training or skills
development for Inuit."
8. Eeyou Marine Region Land Claims Agreement

Article 21.3.4 of the Eeyou Marine Region Land Claims Agreement (http://www.aadnc-
aandc.gc.ca/eng/1320437343375/1320437512985) states,
any particular contract, shall be included in the bid criteria established by Government for the awarding
of its Government Contracts for the procurement of goods and services in the Eeyou Marine Region
(EMR):
a. the existence of head offices, administrative offices or other facilities in Eeyou Istchee;
b. the employment of Cree labour, engagement of Cree professional services, or use of suppliers that
are Cree or Cree Enterprises in carrying out the contracts; and
development for Crees."
Annex 9.4: Requirements for the Set-aside Program for Aboriginal Business
(2010-01-11)
(See 9.40.45 Certification by Suppliers)
1. Who is eligible?
a. An Aboriginal business, which can be:
i. a band as defined by the Indian Act

ii. a sole proprietorship
iii. a limited company
iv. a co-operative
v. a partnership
vi. a not-for-profit organization
in which Aboriginal persons have at least 51 percent ownership and control,

OR
b. A joint venture consisting of two or more Aboriginal businesses or an Aboriginal business and a
non-Aboriginal business(es), provided that the Aboriginal business(es) has at least 51 percent
ownership and control of the joint venture.
When an Aboriginal business has six or more full-time employees at the date of submitting the bid, at
least thirty-three percent of them must be Aboriginal persons, and this ratio must be maintained
throughout the duration of the contract.
The supplier must certify in its submitted bid that it is an Aboriginal business or a joint venture
constituted as described above.
2. Are there any other requirements attached to suppliers in the Set-Aside Program for Aboriginal
Business?
Yes
a. In respect of a contract, (goods, service or construction), on which a supplier is making a proposal

which involves subcontracting, the supplier must certify in its bid that at least thirty-three percent
of the value of the work performed under the contract will be performed by an Aboriginal
business. Value of the work performed is considered to be the total value of the contract less any
materials directly purchased by the contractor for the performance of the contract. Therefore, the
supplier must notify and, where applicable, bind the subcontractor in writing with respect to the
requirements that the Aboriginal Set-Aside Program (the Program) may impose on the
subcontractor or subcontractors.
b. The supplier's contract with a subcontractor must also, where applicable, include a provision in
which the subcontractor agrees to provide the supplier with information, substantiating its
compliance with the Program, and authorize the supplier to have an audit performed by Canada to
examine the subcontractor's records to verify the information provided. Failure by the supplier to
exact or enforce such a provision will be deemed to be a breach of contract and subject to the civil
consequences referred to in this document.
c. As part of its bid, the supplier must complete the Certification of Requirements for the Set-Aside
Program for Aboriginal Business(certification) stating that it:
i. meets the requirements for the Program and will continue to do so throughout the duration
of the contract;
ii. will, upon request, provide evidence that it meets the eligibility criteria;
iii. is willing to be audited regarding the certification; and
iv. acknowledges that if it is found NOT to meet the eligibility criteria, the supplier shall be
subject to one or more of the civil consequences set out in the certification and the contract.
See Standard Acquisition Clauses and Conditions(SACC) Manual clauses A3000T , M9030T or
S3035T, as appropriate.
3. How must the business prove that it meets the requirements?
a. It is not necessary to provide evidence of eligibility at the time the bid is submitted. However, the
business should have evidence of eligibility ready in case it is audited.
b. The civil consequences of making an untrue statement in the bid documents, or of not complying
with the requirements of the Program or failing to produce satisfactory evidence to Canada
regarding the requirements of the Program, may include: forfeiture of the bid deposit; retention of
the holdback; disqualification of the business from participating in future contracts under the
program; and/or termination of the contract. In the event that the contract is terminated because of
an untrue statement or non-compliance with the requirements of the Program, Canada may engage
another contractor to complete the performance of the contract and any additional costs incurred
by Canada shall, upon the request of Canada, be borne by the business.
4. What evidence may be required from the business?
a. Ownership and control
i. Evidence of ownership and control of an Aboriginal business or joint venture may include
incorporation documents, shareholders' or members' register; partnership agreements; joint
venture agreements; business name registration; banking arrangements; governance
documents; minutes of meetings of Board of Directors and Management Committees; or
other legal documents.
ii. Ownership of an Aboriginal business refers to "beneficial ownership" i.e., who is the real
owner of the business. Canada may consider a variety of factors to satisfy whether
Aboriginal persons have true and effective control of an Aboriginal business. (See
Appendix A Set-aside Program for Aboriginal Business for a list of the factors, which may
be considered by Canada.)
b. Employment and employees
i. Where an Aboriginal business has six or more full-time employees at the date of submitting
the certification and is required by Canada to substantiate that at least 33 percent of the full-
time employees are Aboriginal, the business must, upon request by Canada, immediately
provide a completed Owner/Employee Certification form for each full-time employee who
is Aboriginal. See SACC Manual clauses A3001T, M3030T or S3036T, as appropriate.
ii. Evidence as to whether an employee is or is not full-time and evidence as to the number of
full-time employees may include payroll records, written offers for employment, and
remittance and payroll information maintained for Canada Revenue Agency purposes as
well as information related to pension and other benefit plans.
iii. A full-time employee, for the purpose of this program, is one who is on the payroll, is
entitled to all benefits that other full-time employees of the business receive, such as
pension plan, vacation pay and sick leave allowance, and works at least 30 hours a week. It
is the number of full-time employees on the payroll of the business at the date of bid
submission that determines the ratio of Aboriginal to total employees of the business for the
purpose of establishing eligibility under the Program.
iv. Owners who are Aboriginal and full-time employees who are Aboriginal must be ready to
provide evidence in support of such status. The Owner/Employee Certification to be
completed by each owner and full-time employee who is Aboriginal shall state that the
person meets the eligibility criteria and that the information supplied is true and complete.
This certification shall provide the person's consent to the verification of the information
submitted.
5. Subcontracts
a. Evidence of the proportion of work done by subcontractors may include contracts between the
contractor and subcontractors, invoices, and paid cheques.
b. Evidence that a subcontractor is an Aboriginal business (where this is required to meet the
minimum Aboriginal content of the contract) is the same as evidence that a prime contractor is an
Aboriginal business.
6. Who is an Aboriginal Person for Purposes of the Set-Aside Program for Aboriginal Business?
a. An Aboriginal person is an Indian, Metis or Inuit who is ordinarily resident in Canada.
b. Evidence of being an Aboriginal person will consist of such proof as:
i. Indian registration in Canada;

ii. membership in an affiliate of the Metis National Council or the Congress of Aboriginal
Peoples, or other recognized Aboriginal organizations in Canada;
iii. acceptance as an Aboriginal person by an established Aboriginal community in Canada;
iv. enrollment or entitlement to be enrolled pursuant to a comprehensive land claim agreement;
v. membership or entitlement to membership in a group with an accepted comprehensive
claim;
vi. evidence of being resident in Canada includes a provincial or territorial driver's license, a
lease or other appropriate document.
Appendix A Set-aside Program for Aboriginal Business

(Excerpt from Treasury Board Contracting Policy Notice 1996-6, Annex A.)
Factors that may be considered in determining whether Aboriginal persons have at least 51% ownership and
control of an Aboriginal business include:
a. capital stock and equity accounts, i.e., preferred stock, convertible securities, classes of common stock,
warrants, options;
b. dividend policy and payments;
c. existence of stock options to employees;
d. different treatment of equity transactions for corporations, partnerships, joint ventures, community
organizations, cooperatives, etc.;
e. examination of charter documents, i.e., corporate charter, partnership agreement, financial structure;
f. concentration of ownership or managerial control in partners, stockholders, officers trustees and

directors-based definition of duties;
g. principal occupations and employer of the officers and directors to determine who they represent, i.e.,
banker, vested ownerships;
h. minutes of directors meetings and stockholders meetings for significant decisions that affect operations
and direction;
i. executive and employee compensation records for indication of level of efforts associated with position;
j. nature of the business in comparison with the type of contract being negotiated;
k. cash management practices, i.e., payment of dividends - preferred dividends in arrears;
l. tax returns to identify ownership and business history;
m. goodwill contribution/contributed asset valuation to examine and ascertain the fair market value of non-
cash capital contributions;
n. contracts with owners, officers and employees to be fair and reasonable;
o. stockholder authority, i.e., appointments of officers, directors, auditors;
p. trust agreements made between parties to influence ownership and control decisions;
q. partnership - allocation and distribution of net income, i.e., provision for salaries, interest on capital and
distribution share ratios;
r. litigation proceedings over ownership;
s. transfer pricing from non-Aboriginal joint venture;
t. payment of management or administrative fees;
u. guarantees made by the Aboriginal business;
v. collateral agreements.
Annex 9.5: Procurement Strategy for Aboriginal Business Set-aside Checklist

(2010-01-11)
1. Has the client indicated that the requirement has been set aside? (See 9.40.1 Decision to Set Aside a
Procurement under the Procurement Strategy for Aboriginal Business)
a. If no, and:
i. The procurement is destined primarily for Aboriginal populations, and over $5,000, the
contracting officer should draw the client's attention to the potential omission;
ii. Known qualified Aboriginal suppliers exist, the contracting officer should draw the client's
attention to the potential for a voluntary Procurement Strategy for Aboriginal Business
(PSAB) set-aside; or
iii. Neither (i) or (ii) above apply, or the client confirms that the procurement is not to be set-
aside under PSAB, process the requirement according to standard procurement policies and
procedures.
b. If yes, see below:
2. If the procurement is subject to Comprehensive Land Claims Agreements (CLCAs), determine the
extent to which CLCAs and the PSAB set-aside conflict. In cases of conflict, CLCAs take precedence.
(See 9.40.5 Procurement Strategy for Aboriginal Business and Comprehensive Land Claims
Agreements.)
3. Has the client indicated a requirement for subcontracting to Aboriginal business? (See 9.40.20
Subcontracting Plans.)
4. Notify Aboriginal Procurement and Business Promotion Directorate, Aboriginal Affairs and Northern
Development Canada (AANDC), of receipt of set aside requirement. (See 9.40.30(a).)
5. Solicitation includes the document Requirements for the Set-aside Program for Aboriginal Business (
Annex 9.4: Requirements for the Set-aside Program for Aboriginal Business) and Standard Acquisition
Clauses and ConditionsManual (SACC) clauses:
a. A3002T, if applicable;
b. A3000T, M9030T or S3035T, as appropriate; and
c. A3001T, M3030T or S3036T, as appropriate. (See 9.40.10 Procurement Strategy for Aboriginal
Business and Trade Agreements and 9.40.45(c).)
6. Source requirement according to established policies and procedures, source list, Government
Electronic Tendering Service, etc. (See 9.40.35(b).)
7. Notice of Proposed Procurement (NPP)/Advanced Contract Award Notice (ACAN): Include a clear
statement that the procurement has been set aside and that only Aboriginal businesses will be eligible.
(See 9.40.35(e).)
8. Has AANDC advised that the procurement is/is not subject to pre-award audit of certifications before
solicitation closing? (See 9.40.50(f).)
9. Have all bidders/offerors/suppliers provided signed certificates of eligibility with their

bids/offers/arrangements? (See 9.40.45(d).)
10. Evaluation of bids/offers/arrangements according to established criteria.
11. Advice to AANDC of two "best-assessed" responsive bidders/offerors/suppliers (without financial

information) if procurement subject to pre-award audit. (See 9.40.50(f).)
12. Has AANDC advised regarding results of pre-award audit of certificates of eligibility? (See 9.40.50(f).)
13. Award contract in accordance with established evaluation criteria and result of pre-award audit, if
applicable. Any resulting contract issued on the basis of the supplier being Aboriginal must include
SACC Manual clause A3000C.
14. Advise AANDC of contract award within 15 working days. (See 9.40.30(c).)
15. Contract management including advice to AANDC regarding changes in contractor's status as an
Aboriginal business, or requests to AANDC to verify continued status (post-award audit). (See
9.40.50(g))
16. The procurement reporting of the set aside under PSAB has been done accurately. (See 9.40.60
Procurement Reporting.)
Annex 9.6: Memorandum of Understanding - Canadian Commercial Corporation / Public

Works and Government Services Canada
(2017-04-27)
This annex was removed from the Supply Manual as a result of a review of sections referencing the Canadian
Commercial Corporation (CCC). For reference purposes, Annex 9.6 is available in the Supply Manual Archive
(http://www.gcpedia.gc.ca/wiki/Supply_Manual_Archive) , version 2016-2.
Annex A to Memorandum of Understanding 9.6.1: Responsibility Matrix

(2017-04-27)
Commercial Corporation (CCC). For reference purposes, Annex A is available in the Supply Manual Archive
Annex B to Memorandum of Understanding 9.6.2: Canada-United States Defence

Production Sharing Agreements
(2017-04-27)
Commercial Corporation (CCC). For reference purposes, Annex B is available in the Supply Manual Archive
Annex C to Memorandum of Understanding 9.6.3: Canada-United States Defence

Development Sharing Agreement
(2017-04-27)
Commercial Corporation (CCC). For reference purposes, Annex C is available in the Supply Manual Archive
10 Chapter 10 - Cost and Profit

(2012-01-18)
10.1 Cost and profit - General information

(2015-09-24)
a. When a contract must be awarded on a non-competitive basis, or when, following a competitive process,
price negotiations with the successful bidder are required, contracting officers must determine the
contract price based on the procedures outlined in this Chapter.
b. The calculation of prices and costs depends on the circumstances of each contract. Before referring to
the general sections the establishing of costs (see 10.5 Establishing Costs) and profit (see
10.65 Calculation of Profit on Negotiated Contracts), contracting officer must determine that the
following special circumstances do not apply:
i. Travel and Living Expenses (see 10.10 Travel and Living Expenses);
ii. Prices for Out of Plant Services of Individuals (see 10.15 Prices for Out of Plant Services of
Individuals);
iii. Surplus Materials in Cost-Reimbursable Contracts (see 10.20 Surplus Materials in Cost
Reimbursable Contracts);
iv. Costing of Lease Transactions (see 10.25 Costing of Lease Transactions);
v. Service Contracts (see 10.30 Service Contracts);
vi. Joint Ventures (see 10.35 Joint Ventures);
vii. Research and Development Contracts with Universities and Colleges (see 10.40 Research and
Development Contracts with Universities and Colleges);
viii. Non-competitive Contracts with Non-profit Organizations, excluding Universities and Colleges
(see 10.45 Non-competitive Contracts with Non-profit Organizations, excluding Universities and
Colleges);
ix. Non-competitive Acquisitions of Manufactured Products and Repair and Overhaul Services from
Agency and Resale Outlets (see 10.50 Non-competitive Acquisitions of Manufactured Products
and Repair and Overhaul Services, from Agency and Resale Outlets);
x. Transfer Pricing (see 10.55 Transfer Pricing);
xi. Special Production Tooling and Special Test Equipment (see 10.60 Special Production Tooling
and Special Test Equipment).
Contracting officers should also refer to the requirements for audit. (See 4.70.35 Audit)
10.5 Establishing Costs

(2010-01-11)
a. Whenever a contract price is negotiated based on costs, the costs will be determined using Contract Cost
Principles 1031-2 of the Standard Acquisition Clauses and Conditions (SACC) Manual.
In particular, for non-competitive contracts valued at $50,000 and over, with a firm price or fixed time
rate basis of payment, except in cases for the acquisition of commercial goods and services, the price or
rate will be negotiated based on the estimated costs computed in accordance with the Contract Cost
Principles 1031-2.
For non-competitive contracts valued at $50,000 or over, with a cost reimbursable basis of payment,
except in cases for the acquisition of commercial goods and services, the price will be determined based
on actual costs incurred computed in accordance with the Contract Cost Principles.
In both of the above cases, the Contract Cost Principles will be included as a condition of the contract.
Annex 10.4: Reasons for the non-applicability of certain costs when utilizing Contract Cost Principles
1031-2 explains why certain costs are considered non-applicable when utilizing Contract Cost
Principles 1031-2.
For determining costs in accordance with the Contract Cost Principles, the Cost Interpretations Bulletins
issued by Policy, Risk, Integrity and Strategic Management Sector should be taken into consideration at
the time of negotiations. There are currently Cost Interpretation Bulletins on:
i. Excess Facilities - Annex 10.5.1: Cost Interpretation Bulletin - Number 01 Excess Facilities
ii. Depreciation - Annex 10.5.2: Cost Interpretation Bulletin - Number 02 Depreciation
iii. Lease Costs - Annex 10.5.3: Cost Interpretation Bulletin - Number 03 Lease Costs
iv. Travel Costs - Annex 10.5.4: Cost Interpretation Bulletin - Number 04 Travel Costs
v. Head Office Expenses - Annex 10.5.5: Cost Interpretation Bulletin - Number 05 Head Office
Expense
vi. Pension Costs - Annex 10.5.6: Cost Interpretation Bulletin - Number 06 Pension Costs
vii. Research and Development Expenses - Annex 10.5.7: Cost Interpretation Bulletin - Number 07
Research and Development Expenses
viii. Bid and Proposal Expenses - Annex 10.5.8: Cost Interpretation Bulletin - Number 08 Bid and
Proposal Expenses
ix. Selling and Marketing Expenses - Annex 10.5.9: Cost Interpretation Bulletin - Number 09 Selling
and Marketing Expenses
x. Severance Payments - Annex 10.5.10: Cost Interpretation Bulletin - Number 10 Severance

Payments
xi. Pension Plan Refunds - Annex 10.5.11: Cost Interpretation Bulletin - Number 11 Pension Plan
Refunds
xii. Company Funded Costs - Annex 10.5.12: Cost Interpretation Bulletin - Number 12 Company
Funded Costs
xiii. Executive Compensation - Annex 10.5.13: Cost Interpretation Bulletin - Number 13 Executive
Compensation
xiv. Mobile Repair Party Requirements - Annex 10.5.14: Cost Interpretation Bulletin - Number 14
Mobile Repair Party Requirements
xv. Environmental Costs - Annex 10.5.15: Cost Interpretation Bulletin - Number 15 Environmental
Costs
xvi. Take Out Rates - Annex 10.5.16: Cost Interpretation Bulletin - Number 16 Take-out Rates
xvii. Government Supplied Materials - Annex 10.5.17: Cost Interpretation Bulletin - Number 17
Government Supplied Materiel
xviii. Incentive Remuneration Profit Sharing Plans - Annex 10.5.18: Cost Interpretation Bulletin -
Number 18 Incentive Remuneration Profit Sharing Plans
xix. Purchased Labour B Personnel Procured from Outside Sources - Annex 10.5.19: Cost
Interpretation Bulletin - Number 19 Purchased Labour - Personnel Procured From Outside
Sources.
b. The Contract Cost Principles 1031-2 are not required for commercial goods and services, since these are
used regularly for other than government purposes, and are sold by the supplier in the course of carrying
out its normal business operations; and there is a sufficient number of buyers, other than the
government, to establish a going price for the good or service.
10.10 Travel and Living Expenses

(2013-03-21)
a. Normally, traveling and living expenses incurred by a contractor in the ordinary course of business are
to be treated as indirect costs chargeable to overhead. Contracts bear their proportionate share of such
overhead, and this overhead is profit bearing. Therefore, no special provision with respect to these
incidental travel and living expenses is required for such contracts.
However, some contractors consistently charge travel and living expenses directly to contracts. Where a
price is negotiated with suppliers, these charges will be acceptable as direct charges against the contract
if:
i. the expenses are directly attributable to the performance of the work under the contract, and these
expenses are deducted from indirect costs; and
ii. the practice of direct charging is consistently followed by the contractor in the costing of both
government and commercial work; and
iii. the expenses referred to in (i) above are eliminated from indirect costs allocated to contracts.
b. When travel and living expenses are to be directly charged to the contract, these expenses will attract
administrative overhead either at full rates, where adequate support for the claimed general and
administrative rate can be demonstrated, or at a lower negotiated rate where such substantiation cannot
be provided. Alternatively, where industry practices so dictates, a contract may provide for travel and
living expenses to be charged at cost with no allowance for overhead or profit.
When travel and living expenses, plus profit and/or overhead, as applicable, are to be directly charged to
a contract on a cost reimbursable basis, contracting officers must use Standard Acquisition Clauses and
Conditions (SACC) Manual clause C4000C; when there is no allowance for profit and/or overhead,
clause C4001C must be used.
The Treasury Board (TB) Travel Directive applies to travel expenses incurred on contracts with persons
outside the Public Service, when these expenses are a specific element of the contract. For more details,
consult the TB Travel Directive (http://www.tbs-sct.gc.ca/pubs_pol/hrpubs/tbm_113/menu-travel-voyage-eng.asp) and
Special Travel Authorities (http://www.tbs-sct.gc.ca/pubs_pol/hrpubs/tbm_113/statb-eng.asp) .
The contracting officer may accept the contractor's travel and living rates, if they are lower than the TB
rates.
For additional information, contracting officers should consult Annex 10.5.4: Cost Interpretation
Bulletin - Number 04 Travel Costs.
c. Department of National Defence (DND) service establishments may be able to provide transportation,
mess and lodging facilities to the contractor's employees performing work at or near these
establishments under mobile repair party and maintenance-type contracts. The commanding officer of
the establishment must, upon request, advise the contractor as to the availability of these facilities,
which must reduce direct contract expenses.
Any costs incurred by the contractor for the use of these facilities, plus any incidental expenses incurred,
will be reimbursed under the contract, together with allowances for profit and/or administrative
overhead. In order for the contractor to be reimbursed, contracting officers must use C4004C in the
contract.
10.15 Prices for out of plant services of individuals

(2017-11-28)
a. The following methods are applicable to all negotiated charge-out rates, irrespective of whether any
subsequent contract is fixed price, fixed unit price, cost reimbursable, etc. and covers out-of-plant
services of individuals or groups of individuals, with or without equipment.
Services include field service representatives, out-of-plant technical services and mobile repair parties
away from the contractor's plant.
b. When rates have not been established commercially or when they are considered excessive, the Contract
Cost Principles 1031-2 must be used as a basis for negotiating out-of-plant charge-out rates (including
applicable overhead). Profit must be negotiated in accordance with 10.65 Calculation of Profit on
Negotiated Contracts. Travel and living expenses must be determined in accordance with 10.10 Travel
and Living Expenses.
c. Contracting officers are responsible for negotiating fair and reasonable charge-out rates which would
normally be on a fixed time rate, i.e. hourly, per diem, monthly, etc. Charge-out rates will be shown as a
separate line item in the basis of payment.
In determining charge-out rates, some items to be considered are:
i. normal industrial practice/commercial rates;
ii. whether the company usually provides the service;
iii. availability of the service from other sources;
iv. wages of the individuals;
v. whether the plant overhead should apply or whether a separate overhead should be negotiated;
vi. equipment utilized;
vii. use of the facilities of Canada.
Before contract award, contracting officers are advised to seek guidance and cost interpretations from
the sector/region cost analyst with respect to negotiated charge-out rates, in accordance with the
Guideline on the Use of Cost and Price Analysis Services
d. Full plant overhead should not be applied to out-of-plant charge-out rates, unless the out of plant
technical services are a relatively minor part (less than 10 percent) of the contractor's total business
(volume/direct labour) in any one year.
e. Dislocation/displacement pay allowances may be allowed provided that the amount of the displacement
pay is reasonable; the displacement pay is for justifiable purposes; and/or displacement pay is in
accordance with the contractor's established practice.
For removal, living, car allowances and outside Canada expenses, contracting officers must consider the
following:
i. Only one removal from and back to the original residence will be paid for any one representative.
Where removal expenses to the site of the work have been paid by the Canada on a previous
contract and the services are being extended for a further period, such contract amendment or
subsequent contract should provide for reimbursement only for expenses incurred for moving the
representative back to the original residence.
ii. Removal expenses should not be paid on assignments of less than six months, and any removal by
an employee with dependents for assignments exceeding six months must be carried out during
the first 90 days, and by an employee without dependents during the first 60 days.
iii. Reimbursement for living expenses for an employee with dependents on an assignment exceeding
six months should cease when the family is moved (whether or not removal expenses have been
paid) to permanent quarters at the location of the work.
iv. Reimbursement for living expenses for an employee without dependents on an assignment
exceeding six months should cease when the employee's effects have been moved (whether or not
removal expenses have been paid) to the location of the work or in any event after the first 60
days of such assignment.
v. Reasonable car allowances in accordance with the contractor's practice may be paid for the use of
personally owned motorcars by the contractor's personnel for essential on-base traveling where
local Canada transportation is not available.
vi. Cases where the representative is required to go abroad must be dealt with individually and
considered on their merits.
For additional information, contracting officers should consult Annex 10.5.14: Cost Interpretation
Bulletin - Number 14 Mobile Repair Party Requirements.
10.20 Surplus Materials in Cost Reimbursable Contracts

(2010-01-11)
a. Surplus materials resulting from the performance of a contract may be disposed of in several ways:
i. declared surplus at a Crown Assets Distribution Centre (CADC);
ii. transferred to the client, or to another contract with the same contractor, or to another contractor;
or
iii. returned to the original supplier.
Each of these has implications on the terms of the contract relating to costs and profits.
b. Costs of surplus materials are allowable costs in a production contract if the surplus is due to:
i. normal accumulation of stores, during or on completion of a contract, and which are declared
surplus to CADC, or transferred to the client or to another contract with the same or a different
contractor;
ii. major design changes or other major adjustments of a substantial nature not including
termination;
iii. minor design changes or other minor adjustments in the scope of the work provided the contract
does not specifically exclude such items.
c. When the surplus is due to excess purchasing by a contractor, the costs are not allowable in a contract.
d. Handling costs associated with the surplus materials are allowable costs in a contract whenever the costs
of surplus materials are allowable.
e. General and administrative overhead costs associated with surplus materials are allowable costs in a
contract only when the surplus materials consist of work-in-process and finished goods resulting from
design changes and minor cutbacks.
f. Profit will be allowed on the following categories (10.20(b), 10.20(d), 10.20(e)) of allowable costs,
except that:
i. in the case of surplus materials arising from the normal accumulation of stores, during or on
completion of a contract, profit will be allowed only if the inventories acquired for a contract
were financed by the contractor;
ii. in the case of surplus materials arising from major design changes, or other major changes of a
substantial nature, profit will be allowed only if the inventories were either purchased by the
contractor or, if not purchased by the contractor, were manufactured by the contractor and
rendered surplus as the result of the changes.
g. For cost reimbursable with fixed fee or cost reimbursable with incentive fee contracts, and contracts
containing a ceiling price, allowable costs of surplus materials will be treated as an extra direct cost to
the contract, outside the area of fixed fee, incentive fee or ceiling price considerations. It may be
necessary to renegotiate the principal terms of the contract.
h. Where incentive fee contracts require negotiation of targets, the costs of surplus materials should be
included in the revision of a target only where other reasons make it essential to re-open the calculation
for the protection of either the contractor or Canada. Alternatively, when a contract so provides, these
costs may be paid for as an extra to the target or other arrangements, e.g. at cost plus a fixed fee at
whatever rate of profit is appropriate.
10.25 Costing of Lease Transactions

(2010-01-11)
a. When a contractor proposes to include, in the cost of a contract, costs relating to the leasing by the
contractor of an asset, the amount of allowable charge depends on the type of lease.
b. The necessary information for contracting officers is in Annex 10.5.3: Cost Interpretation Bulletin -
Number 03 Lease Costs.
10.30 Service Contracts

(2010-01-11)
a. Fees for all services not established by price competition, except repair and overhaul, are negotiated on
the basis of the prevailing rates for the type of work required and recognizing the circumstances of each
contract. Considerations are:
i. requirements of the task: an assessment of skill level, expertise necessary, or complexity of the
task requirements;
ii. bidder qualifications: fees will vary in terms of factors like the calibre of proposed personnel,
knowledge or expertise, previous experience, personnel utilization rate, use of facilities, or the
area of specialization;
iii. market conditions: a determination as to whether there is a commercial or going rate for a
particular expertise or service capability in private industry should be made. If these rates cannot
be determined, the fee scales recommended by provincial professional associations may be used
as a reference point from which the reasonableness of a negotiated rate can be compared;
iv. costing/fee practices: the costing structures of individuals, bidders and universities are different
and will vary significantly. Some costs that would otherwise be charged separately are sometimes
charged to overhead, thus increasing the total rate.
b. Fees should include only those elements of cost properly associated with the actual time expended on
the work. These are the direct labour costs and their fair share of overheads, general and administrative
expenses and profit. Other direct costs such as charges for publication of reports, special computer or
test services, travel and living, should normally be shown separately. Each case must be taken on its
own merits to arrive at an assessment of which amounts are reasonable charges, either as a fee element,
or as a separately charged item.
c. In all contracts for services with a cost reimbursable or fixed time rate basis of payment, the time rates
of payment must be specified for the entire period required for performance of the contract, including all
phases and specified option periods. When this is not possible, payments for each year or phase must be
based on a pre-agreed rate or formula that is to be specified in the contract.
10.35 Joint Ventures

(2010-01-11)
a. For non-competitive contracts intended to be awarded to a joint venture, special costs that may be
attributed to the joint venture arrangement alone, such as legal, accounting and consulting fees in
connection with the setting up of the joint venture, are not acceptable charges.
b. Ongoing operational costs related to the joint venture arrangement are acceptable to the extent that they
are considered reasonable and can be allocated to the contract using the Contract Cost Principles 1031-
2.
c. When materials, supplies or services must be transferred to the joint venture under subcontracts issued
to a representative of the joint venture, the contracting officer should negotiate acceptable subcontract
costs with the representative in accordance with the establishment of costs policy stated in 10.50 Non-
competitive Acquisitions of Manufactured Products and Repair and Overhaul Services, from Agency
and Resale Outlets to 10.50.5(b).
d. The joint venture cannot submit a price bid based on average rates. Each joint venture member's
workload must be priced separately using appropriate costing procedures. The total of all the joint
venture member prices must be the total proposed contract price.
10.40 Research and Development Contracts with Universities and Colleges

(2013-06-01)
a. Research and development work carried out by universities or colleges is priced at direct costs plus a
contribution to overhead. This contribution is a maximum take-out rate of 65 percent of direct payroll
costs for on-campus work, and 30 percent of direct payroll costs for off-campus work. In addition, a
contribution equivalent to 2 percent of applicable and acceptable travel and living expenses must be
made.
b. Contract Cost Principles 1031-2 must not be called up in the contract, and post-contract audits of
overhead charges must not be carried out. Direct costs must be subject to cost verification or audit.
c. Allowable direct costs are:
i. Direct Payroll Costs
A. professional salaries
B. clerical salaries
C. technicians' wages
D. fellowships - daily rate of personnel working directly on a contract
E. fringe benefits including:
1. unemployment insurance
2. workers' compensation
3. Canada or Quebec Pension Plan
F. university pension plan (current service only)
G. university portion of medical plans
H. sick leave
Annual salaries must be prorated over annual working days, taking into account statutory holidays
and annual vacation.
ii. Materials and Supplies
A. stationery
B. postage
C. materials issued from stores
D. materials, parts and components purchased specially for the contract at "laid-down cost"
E. long distance telephone charges
F. telegrams and cables
G. freight and express
H. publication charges as agreed in contract
iii. Direct expenses - those costs which can be specifically identified and measured as having been
used or to be used in the performance of the contract, and which are so identified and measured
by the institution's cost accounting system. These expenses may include such items as:
A. travel expenses
B. consultant services
C. apparatus and equipment acquisition. (This must remain Canada's property and be subject
to Crown Assets Distribution Centre procedures.)
D. other costs as agreed and negotiated, including charges for computer time.
d. Consultants are to be considered in three separate categories:
i. in-house standard rate of pay: the 65 percent overhead is applicable;
ii. external type consultant, which is in-house personnel working additional hours at increased rates,
but using university equipment: direct charge without overhead;
iii. outside consultant: direct charge without overhead.
e. Manufactured equipment is to be considered as a "make" or "buy" decision for the contracting officer. If
it is a "buy", it must be a direct charge, and be Canada's property: a decision regarding disposal must be
made later. If it is a "make", the university would be allowed the cost of parts and labour as laid out in
the bid, including the 65 percent overhead, with ownership and disposal the same as for a buy. This
should be a separate item under the contract.
f. Allowable overhead costs are:
i. maximum of 65 percent applicable to Direct Payroll Costs for on-campus work;
ii. maximum of 30 percent applied to Direct Payroll Costs for off-campus work;
iii. an administration charge of 2 percent on travel and living expenses incurred directly against the
contract is allowed.
g. Costs incurred by the university or college that have no direct bearing on the research activity are not
acceptable as direct charges against Canada research contracts. These include:
i. university annual reports
ii. contingency reserves
iii. convention expenses - unless applicable to specific contract
iv. post service lump-sum payments
v. termination allowances not earned during the course of the contract
vi. admissions department
vii. grants - unless for services rendered for a specific contract
viii. finance charges (bank, debenture, bond interest, etc.)
h. Additional special facility charges must not be included in the price, since these are accounted for in the
contribution to overhead.
i. Charges for use of a computer centre must be directed to a contract at a predetermined rate per hour,
including general overhead, and computed at a break-even level for the centre. These charges must be in
line with normal policies of the university for internal use.
j. Departments and agencies of the United States (U.S.) Government negotiate directly with Canadian
universities and colleges towards research and development contracts. Public Works and Government
Services Canada may be asked for assistance in developing an appropriate overhead rate. These requests
will be handled by the Services and Technology Acquisition Management Sector, which must develop
the overhead rates from the latest certified financial statements of the university or college, with indirect
costs prorated over the direct cost base in conformity with the costing principles set out in the applicable
U.S. Government directive on the subject.
10.45 Non-competitive Contracts with Non-profit Organizations, excluding Universities

and Colleges
(2010-01-11)
a. Non-profit organizations incur financing charges for working capital, over and above normal operating
costs as determined in accordance with the Contract Cost Principles 1031-2. They are also subject to
business and contractual risk, though less than profit-oriented organizations.
b. The price is based on costs incurred, computed using the Contract Cost Principles 1031-2 plus an
allowance in lieu of profit.
c. For financing charges on working capital employed, the allowance depends on the basis of payment:
i. if there is a provision for progress payments or milestone payments: 1.5 percent of costs incurred;
ii. if there is no provision for progress payments or milestone payments: 3 percent of costs incurred.
d. For general business risk, the allowance is based on contract costs:
i. direct materials, subcontracts and direct charges: up to 1 percent of such costs;
ii. direct labour and overhead: up to 2 percent of such costs.
e. The allowance that may be included in recognition of contractual risk depends upon the basis of
payment selected for the contract or part thereof:
i. firm price: up to 4 percent of costs incurred;
ii. fixed time rate with ceiling price: up to 3 percent of costs incurred;
iii. cost reimbursable with ceiling price: up to 3 percent of costs incurred;
iv. fixed time rate with no ceiling price: up to 2 percent of costs incurred;
v. cost reimbursable with no ceiling price: 0 percent.
10.50 Non-competitive Acquisitions of Manufactured Products and Repair and Overhaul

Services, from Agency and Resale Outlets
(2010-01-11)
a. The procedures detailed in 10.50.1 Non-competitive Requirements of Commercial Goods and/or

Services to 10.50.15 Price Analysis provide for the establishment of fair and reasonable prices, when
the competitive process cannot be used for:
i. acquisitions from Canadian agency and resale outlets, and
ii. acquisitions of manufactured products and repair and overhaul services, from Canadian suppliers,
except Canadian agency and resale outlets.
b. There are key differences between these two types of acquisitions in the determination of what costs are
allowed, and how profits are determined. The procedures also differ depending on whether the good or
service is commercial or non-commercial.
10.50.1 Non-competitive Requirements of Commercial Goods and/or Services

(2012-07-16)
a. The contracting officer must negotiate a fair price on the basis of at least one of the following criteria:
i. recent prices paid;
ii. latest published price lists or catalogues;
iii. prices paid by others, such as other governments, Crown corporations, hospitals, universities and
large private sector corporations or companies.
b. For requirements valued at $50,000 or less, the contracting officer may, at its discretion, request
additional price justification by way of a price certification signed by the bidder; but for requirements
valued at $50,000 or more, price certifications must be obtained in all cases.
Contracting officers must include the following applicable price certification Standard Acquisition
Clauses and Conditions (SACC) Manual clause in non-competitive bid solicitations:
i. C0002T: for commercial goods and/or services, other than petroleum products with Canadian
suppliers, other than agency and resale outlets;
ii. C0004T: for commercial goods and/or services with Canadian agency and resale outlets,
including subsidiaries of foreign manufacturers;
iii. C0006T: for petroleum products;
iv. C0600T: for commercial services (Canadian bidders).
Contracting officers must include the discretionary audit clause C0100C in contracts.
10.50.5 Non-competitive Requirements of Non-commercial Goods and/or Services

(2010-01-11)
a. For non-competitive requirements of non-commercial goods and/or services valued at $50,000 or less, a
fair price may be negotiated in accordance with the guidelines for commercial goods and/or services
given above, provided the data required to follow this guideline is available.
For acquisitions from agency and resale outlets only, if the data is not available, then the guideline
presented in 10.50.10 Agency and Resale Outlets - Additional Requirements should be followed.
b. The contracting officer must request the bidder to submit an itemized breakdown of the price quoted. In
the case of agency and resale outlets, the contracting officer will analyze the price breakdown in
accordance with 10.50.15 Price Analysis. The depth of the analysis required will depend on the value of
the requirement and the quality and completeness of the support data provided by the bidder. The cost of
performing the analysis versus the potential benefit in the form of cost savings on the requirement
should be taken into account.
For more details on the bases of payment, see 4.70.20 Basis of Payment. A firm price basis of payment
is generally used for contracts with agency and resale outlets.
Contracting officers must include the price certification SACC Manual clause C0003T in non-
competitive bid solicitations, for non-commercial goods and/or services with Canadian suppliers;
include the discretionary audit clause C0101C in contracts, and rate certification clause C0601T in non-
competitive bid solicitations for fixed time rate contracts, for non-commercial services valued at
$50,000 or more, submitted by a Canadian bidder.
10.50.10 Agency and Resale Outlets - Additional Requirements

(2010-01-11)
The two chief types of agency and resale outlets encountered when purchasing for Canada are:
a. those engaged in manufacturing, which also act as agency or resale outlets representing other
manufacturers (type 1); and
b. those not engaged in any form of manufacturing, which act solely as agents, distributors, wholesalers,
jobbers or retailers. They may conduct the functions of purchasing, receiving, storing, shipping and
accounting (type 2).
10.50.15 Price Analysis

(2010-01-11)
a. The following should be considered when analyzing the price breakdown:
i. Laid-down costs
Ensure that the necessary support for the price of the good/service quoted by the principal is
provided by the bidder and that all trade discounts have been deducted. The applicability and
amount of any added costs for transportation, foreign exchange, customs duty and brokerage
should be verified. Transfer prices representing fair market value, constitute laid-down cost for
the purposes of price analysis and profit calculations.
ii. Cost of necessary services and overhead

Establishment of the cost of necessary services rendered by the bidder is dependent upon
requirements, the type of organization the bidder operates, and the degree of sophistication in the
bidder's cost accounting system.
Types of services that may be considered for costing purposes:
A. purchasing;
B. internal handling including unpacking, incoming inspection, inhibiting, warehousing, and

re-packing for delivery to one or more destinations, but excluding costs related to the
bidder's own manufacturing or other related costs;
C. general and administrative expenses applicable to the activity required.
After-sales activity, such as on-site installation and test should be taken into account in
establishing the overall price structure.
An examination of the overhead costs allocated to the particular buy should be made to ensure
that the allocation represents a reasonable and justifiable distribution of overhead costs in
accordance with the Contract Cost Principles 1031-2.

If Canada's requirements can be met by direct shipment from the principal, the bidder's charges
are normally confined to the costs of purchasing and invoicing, and in such cases, a special direct
shipment rate of overhead should be developed.
The negotiated rates established in accordance with the foregoing are generally applied as a
percentage additive to the laid-down costs.
iii. Profit
Agency and Resale Outlet (type 1)
A reasonable rate of profit is allowed on the total of laid-down costs and the cost of
services required by Canada. The rate must be commensurate with the risk, the volume of
resale business to Canada and other circumstances. For example, if the services required
include the maintenance of an inventory, a higher rate of profit is permitted.
Agency and Resale Outlet (type 2)

The profit amounts should be calculated by application of the following:
A. Profit on laid-down costs:

Recognizing the cost of financing and risks associated with the maintenance of
stocks, the maximum rates of profit applied to laid-down costs vary in accordance
with the method of supply as follows:
i. supplied from stocks maintained and financed by the bidder: up to 4 percent.
ii. supplied from stocks held by the bidder on consignment from the principal:
up to 3 percent.
iii. supplied by the principal through the bidder, only when ordered by Canada:
up to 3 percent.
iv. supplied by the principal in direct shipment to Canada: up to 2 percent.
B. Profit on cost of necessary services and overhead:

Recognizing the associated general business risk, the rates of profit applied to the
cost of necessary services and overhead may vary in accordance with the services
provided and are:
i. where the services include those of purchasing and invoicing only: up to 7.5
percent.
ii. where the services include other than purchasing and invoicing: up to 10
percent.
iv. Price certification and discretionary audit:

Subsequent to the price negotiation, the bidder should resubmit its price proposal based on the
agreement reached and include a price certification. In addition, all contracts for non-competitive
acquisitions from agency and resale outlets valued at $50,000 and over must contain a
discretionary audit clause. (See 10.50.1(b) and 10.50.5(b).)
10.55 Transfer Pricing

(2010-01-11)
a. When materials, supplies or services are transferred to a supplier to Canada from divisions, subsidiaries
or affiliates under common control, the transfer price must be established in conformity with standard
criteria, to avoid the payment of a rate of profit exceeding departmental norms.
Considerations of materiality and practicality must govern in the application of these criteria.
Consistency is also an objective - consistency between government and commercial work, consistency
among the various kinds of firm price and cost reimbursable contracts, and consistency from one year to
the next. In order to ensure consistency, personnel from all sectors/regions should consult early, in the
negotiation process, a repository of applicable data maintained by the Policy, Risk, Integrity and
Strategic Management Sector.
b. The following criteria apply to the establishment of acceptable inter-company and intra-company
transfer prices on non-competitive contracts for which a price is negotiated with the bidder through a
process involving analysis of costs and determination of profit.
These criteria do not apply if the transfer price can be verified to be reasonable by reference to
comparable third party prices involving transactions between the Canadian subsidiary (agency or resale
outlet) or its parent and a third party, or between unrelated parties.
c. Intra-company transfer prices (that is, for transfers between divisions of the same legal or corporate
entity) must be charged under the contract at cost according to the Contract Cost Principles 1031-2
without allowances for profit or an allocation of corporate general and administrative expenses. These
allowances must apply on the cost of the finished product sold to Canada.
d. Inter-company transfer prices (that is, for transfers between a company and its subsidiary or affiliate
enjoying separate legal status but otherwise under common ownership control) charged under the
contract must not be, whenever possible, greater than those which approximate fair market value. In
those situations where approximate fair market value cannot be determined, inter-company transfer
prices must be those that can be considered as reasonable under the circumstances if the parties to the
transaction had been dealing at arm's length.
Fair Market Value means the price that would be agreed to in an open and unrestricted market between
knowledgeable and willing parties dealing at arm's length who are fully informed and not under any
compulsion to transact.
If the good or service has a going price at which significant quantities are known to sell in the market in
arm's length transactions, such a price will represent fair market value. Examples: regulated prices,
posted prices, catalogue prices and other prices actually available and given in past transactions to
arm's-length parties for the size, quality, timing and location of the transaction, after all discounts have
been considered. An inter-company transfer price representing fair market value will be used as "laid-
down cost" for that item for the purposes of computing mark-up, profit and contract price.
In any case where the circumstances described in the last paragraph do not apply, it must be deemed that
the transfer prices of the company are established at cost calculated in accordance with Contract Cost
Principles 1031-2 without allowance for profit and without an allocation of corporate general and
administrative expenses.
In interpreting the term "reasonable under the circumstances," the following considerations apply:
i. If the supplier to Canada can prove that the transfer price is at cost, then a normal profit at rates as
set out in 10.65 Calculation of Profit on Negotiated Contracts must apply to the final product cost.
ii. If the supplier to Canada can provide satisfactory price support for a transfer price in excess of
cost, the profit element in such transfer price must be limited to a return (at a rate not exceeding
the corporate bond rate periodically published by the Policy, Risk, Integrity and Strategic
Management Sector), on the fixed and working capital used in the production of the goods and
services. The formula for computing profit is as follows:
(R/12) x M (a x (b/c)) = P
R = corporate bond rate
M = period (in months of capital use)
a = fixed and working capital employed
b = transfer price less profit
c = total company annual cost of sales and transfers
P = profit amount to include in transfer price
It should be noted that satisfactory price support originating from the transferor must be capable
of being verified by reference to instances of transactions in similar goods either between the
Canadian subsidiary or its parent and a third party, or between unrelated parties.
iii. In situations other than (i) and (ii) above, profit must not be allowed on the transfer price
component of the total costs of the final product sold to Canada.
e. Where necessary, common ownership control must be determined by reference to the latest issue of
appropriate trade surveys (e.g. Financial Post Survey of Industrials, Moody's Industrials, etc.), as
confirmed by means of a certification from the company as to control (use SACC Manual clause
A9112C for this purpose). Ownership control is presumed in cases where at least 50 percent of the
voting rights are held by the affiliate.
10.60 Special Production Tooling and Special Test Equipment

(2010-01-11)
a. No profit is allowed on Special Production Tooling (SPT) or Special Test Equipment (STE) which is
purchased by a contractor for use under a contract, or purchased or otherwise acquired by its
subcontractors for use under approved subcontracts.
b. When the production of the end product involves prior or concurrent expenditures for SPT or STE under
a separate agreement, or pursuant to a clause in a contract or subcontract, a profit of up to 5 percent may
be allowed on all SPT fabricated in a plant owned or operated by a contractor.
No profit is allowed on the cost of purchased equipment incorporated or built into the STE.
c. Expenditures incurred by a contractor in connection with purchased SPT or STE (other than the cost of
such tooling or equipment) are usually recovered as preproduction expenses or factory overhead.
Administrative overhead is not accepted on STE.
Purchased tooling should be included in the cost of sales base for the distribution of administrative
overhead.
d. Since the cost of SPT or STE represents part of the cost of the end product being acquired by a client,
payment is made out of the client's funds appropriated for the purchase of that end product.
e. SPT may be acquired on a firm price or a cost reimbursable basis irrespective of the price arrangement
for the end product for which the tooling is required.
When SPT is to be provided on a cost basis:
i. the cost of such tooling is to be in accordance with the Contract Cost Principles 1031-2;
ii. a dollar limit is to be placed on the cost of the tooling with the provision that the cost is not to
exceed this limit until further authorization is obtained.
10.65 Calculation of profit on negotiated contracts

(2017-10-24)
a. The policy and guidelines for the calculation of the amount of profit applicable to negotiated contracts
and parts thereof with Canadian suppliers, for both goods and services are detailed in 10.65(b) to
10.65.35 Total Profit. Contracts valued under $50,000 do not require negotiation of profit under this
section.
There are differences in the guidelines for contracts with total costs between $50,000 and $249,999, and
for contracts with total costs of $250,000 or more.
For agency and resale outlets, the procedures for profit determination in 10.50.15 Price Analysis apply.
b. When for any reason it is not possible to establish an acceptable basis of price by competition or a fair
and reasonable price assessment, the price must be negotiated. The object of price negotiation is to
duplicate a fair market price, while establishing a realistic division of responsibilities and risks between
the contractor and Canada.
A fair market price for non-competitive contracts for the procurement of goods or services (other than
commercial goods or services) must be negotiated. The object of such negotiation is to arrive at a price
which is considered to be fair and reasonable in the circumstances based upon an estimate of the costs,
to be incurred in the performance of the contract, computed in accordance with the Contract Cost
Principles 1031-2, plus a fair profit. A fair profit is an amount no greater than that calculated under this
section.
There are the following exceptions:
i. Generally, all contracts placed on behalf of the Canadian Commercial Corporation (CCC).
However, if the ultimate client for the CCC contract is the United States Department of Defense
or National Aeronautics and Space Administration (NASA) or the United Kingdom Ministry of
Defence, the profit may be calculated in accordance with this section.
ii. Contracts or parts thereof for which the price is based on catalogues, price lists or fee schedules
where only discounts are subject to negotiation.
iii. Contracts for which the pricing is determined based on alternative approaches that are not
addressed by Section 10.65, such as when pricing is not determined by cost plus profit or when
profit is not calculated in accordance with 10.65(c). For such contracts, follow the process
outlined in 10.75 Interim pricing measure.
c. Profit levels will vary:
i. to recognize the cost of money associated with the capital employed by the contractor in
performance of the contract;
ii. to recognize the levels of general business and contractual risk assumed by the contractor in
performance of the contract.
The calculation of the amount of profit attributable to each of the above factors must normally be made
in accordance with the following guidelines.
10.65.1 Return on Capital Employed

(2010-01-11)
The return on capital employed will be determined in two parts:
a. return on fixed capital employed, and
b. return on working capital employed.
The determination is different for contracts with total costs between $50,000 and $249,999 and for contracts
with total costs of $250,000 or more. (See 10.65.10 Return on Working Capital Employed (between $50,000
and $249,999).)
10.65.5 Return on Fixed Capital Employed (between $50,000 and $249,999)

(2010-01-11)
For contracts with total costs between $50,000 and $249,999, the return on fixed capital employed is calculated
as follows:
If machinery and/or equipment owned by the contractor are used on a regular basis in the manufacture of the
product(s) or provision of the service(s) being acquired under the contract, an amount equivalent to 1 percent of
total allowable costs will be awarded as a return on fixed capital employed.
10.65.10 Return on Working Capital Employed (between $50,000 and $249,999)

(2010-01-11)
The following rates applied to the total contract costs will be used to provide for a return on working capital
employed:
a. if there is no provision for progress payments, advance payments or milestone payments - 3 percent;
b. if there is a provision for progress payments or milestone payments - 1.5 percent;
c. if there is a provision for advance payments - 1.5 percent (Note: The profit factor of 1.5 percent will
apply only to total costs less amount of advance payments.);
d. if there is a provision for both progress payments and advance payments - 0 percent.
10.65.15 Return on Fixed Capital Employed ($250,000 or more)

(2010-01-11)
For contracts with total costs of $250,000 or more, the return on fixed capital employed is calculated as follows:
The provision of a return on fixed capital employed is intended not only to compensate contractors for the cost
of money associated with the fixed capital employed on the contract but also to encourage investment in new
capital equipment, the result of which is generally greater productivity and consequently reduced costs to
Canada.
a. For the purpose of this section, the fixed capital employed is defined as the net book value of fixed
assets, less:
i. land and any intangible assets,
ii. any fixed assets not in use such as idle plant, and
iii. any surplus value arising from re-appraisal.
b. The determination of fixed capital employed will be as follows:
i. Determine the percentage:

(A/B) x 100%
A = overhead recovery base allocated to the contract
B = total budgeted amount of recovery base
ii. Apply the percentage in (A) to the net book value of fixed assets.
Such determination will be performed in accordance with the format set out in
Annex 10.1: Determination of Fixed Capital Employed Applicable to a Contract.
c. The rate of return to be applied to the fixed capital employed applicable to the contract will be 1.7 times
the corporate bond rate, which will be published monthly by the Policy, Risk, Integrity and Strategic
Management Sector (PRISMS). The rate used will be the latest rate published at the date that the
contractor's price proposal is firmed up. In the event that the published rate at the time of contract award
has changed by more than one full point, up or down, this rate will be used to recompute the return.
d. The rate used in the contractor's price proposal will be the latest figure published at the time the price
proposal is submitted. In order to conform to (iii) above, it is necessary that the following clause be
included in the price proposal:
"The price quoted includes an amount of profit using a corporate bond rate of ____ percent. In the event
that the corporate bond rate, as published by the Policy, Risk, Integrity and Strategic Management
Sector, at the time of contract award, has changed by more than one full point, up or down from this
rate, the price will be adjusted to reflect such rate."
10.65.20 Return on Working Capital Employed ($250,000 or more)

(2010-01-11)
a. The amount of working capital employed applicable to a particular contract is defined as all allowable
contract costs (exclusive of depreciation where considered significant) less contract revenue (exclusive
of profit).
For contracts with total costs of $250,000 or more, the return on working capital employed is calculated
as follows:
i. During negotiations, a schedule of the estimated net working capital for the contract, as defined
above, on a month-by-month basis, will be determined and agreed to between the contracting
officer and the contractor.
ii. The rate of return to be applied to the cumulative monthly amounts of working capital is defined
below. However, as this is an annual rate of return, one-twelfth only of the rate is applicable to
each monthly amount. For ease of calculation, the equivalent formula, to be used for determining
the return on working capital employed on a particular contract, is as follows:
(A/12) x B
A = sum of the cumulative monthly working capital amounts
B = prescribed rate
iii. The rate of return to be applied to working capital employed applicable to the contract will be the
chartered bank prime rate. PRISMS will publish this rate weekly. The rate used will be the latest
rate published at the date that the contractor's price proposal is firmed up. In the event that the
published rate at the time of contract award has changed by more than one full point, up or down,
this rate will be used to recompute the return.
iv. The rate used in the contractor's price proposal will be the latest figure published at the time the
price proposal is submitted. The following clause must be included in the price proposal:
"The price quoted includes an amount of profit using the chartered bank prime rate of
_____ percent. In the event that the chartered bank prime rate, as published by the Policy, Risk,
Integrity and Strategic Management Sector, at the time of contract award, has changed by more
than one full point, up or down from this rate, the price will be adjusted to reflect such rate."
b. Specific guidelines in regard to the cost base for purposes of all profit calculations are as follows:
i. Direct material costs should include the costs of all materials purchased specifically for the
contract together with the costs of any other materials issued specifically for the contract from the
contractor's own inventories except Accountable Advance (AA) spares embodied. Direct
materials must not include the value of Government Furnished (GF) nor Contract Issue (CI)
materials. However, direct labour and overhead costs associated with the acquisition, stocking and
handling of GF and CI materials and AA spares embodied may be included under the appropriate
cost element for profit purposes.
ii. Overhead in this context includes not only plant or factory overhead, but engineering, material
handling, general and administrative or any other overheads as appropriate to and allowable on
the contract.
iii. All other allowable costs are those costs not considered to be direct material, direct labour or
overhead but nevertheless are an appropriate and allowable direct charge to the contract. Royalty
payments and the goods and services tax or the harmonized sales tax, although they may be an
appropriate and allowable direct charge to the contract, must not be included for the purpose of
profit calculation.
For more information, contracting officers should consult Annex 10.2: Examples to Determine the
Working Capital Employed.
10.65.25 General Business Risk

(2010-01-11)
a. The award of profit under this factor is intended to recognize the level of effort a contractor makes in
the management of all the resources required to perform the contract in an efficient and economical
manner.
b. The level of effort is considered to vary according to the elements of cost and is reflected in the
following rates of profit to be applied to the costs in each element:
i. direct materials: 1.5 percent
ii. subcontracts: 2 percent
iii. accountable advance spares embodied: 2 percent
iv. direct labour: 4 percent
v. overhead: 4 percent
vi. all other allowable costs: 1.5 percent
10.65.30 Contractual Risk

(2010-01-11)
a. The rates of profit to be paid for contractual risk will depend upon the basis of payment selected for
each individual line item of the contract, or part thereof, and the cost base associated with each distinct
basis of payment.
b. The basis of payment determines the maximum level of profit, and requires the following consideration
of different factors in arriving at the appropriate profit level.
i. firm price and firm base price with economic price adjustments (7 percent maximum) - consider:
A. the ability of Canada to state its requirements in the form of a well-defined specification;
B. the ability of the contractor to convert Canada's specification into a comprehensive

statement of work;
C. the ability of Canada and the contractor to precost the statement of work;
D. the duration of the contract and its effect on the predictability of labour and material costs
and overhead distribution, taking into account whether protection in this regard is provided
to the contractor by the inclusion in the contract of a provision for economic price
adjustment (firm base price with economic price adjustments basis of payment);
E. whether the final determination of the firm price takes place before or after a portion of the
contract period has elapsed.
ii. fixed time rate with ceiling price (4.5 percent maximum) and without ceiling price (3.5 percent
maximum) - consider:
A. the duration of the contract and its effect on the predictability of the labour and overhead
rates;
B. if a ceiling price is included, the familiarity of the contractor with the work being performed
under the contract resulting from the previous manufacture of the same or similar products,
or the provision of the same or similar services;
C. whether the final determination of the fixed time rates takes place before or after a portion
of the contract period has elapsed.
iii. cost reimbursable with incentive fee (4.5 percent maximum) - consider:
A. the degree to which the difference between the target fee and the maximum fee will provide
an incentive for more effective cost control and contract performance by the contractor;
B. whether the agreement on target costs and target fee was reached before or after a portion of
the contract period has elapsed.
To calculate the bonus on target incentive fee contracts: the maximum fee for cost reimbursable
with incentive fee contracts must consist of the target fee plus an added amount which brings the
total profit for the General Business Risk and Contractual Risks Factors to a maximum of
10 percent of target costs.
iv. cost reimbursable with fixed fee with ceiling price (4.5 percent maximum) and without ceiling
price (1 percent maximum) - consider:
A. the reliability of the cost estimate used for determining the fixed fee, taking into account the
duration of the contract and its effect on the predictability of costs, and provided that no
"swing points" at which the fixed fee will be renegotiated are included in the contract;
B. if a ceiling price is included, the familiarity of the contractor with the work being performed
under the contract resulting from the previous manufacture of the same or similar products,
or the provision of the same or similar services;
C. whether the fixed fee was determined before or after a portion of the contract period has
elapsed.
v. cost reimbursable with no fixed fee and no ceiling price (0 percent): there is no business or
contractual risk.
10.65.35 Total Profit

(2010-08-16)
a. The total allowable amount of profit must be the lowest of:
i. sum of supportable amounts by factor; and;
ii. 20% of the total cost.
b. The total amount of profit awarded under all factors must in no event exceed 20 percent of the total
contract costs.
c. The amount of profit for all factors should be calculated separately and included in the price of each line
item with a distinct basis of payment in the contract (see examples in Annex 10.1.1: Examples to
Determine the Fixed Capital Employed and Annex 10.3: Examples of Profit Calculations).
10.70 Recovery and Settlement of Contract Claims

(2013-03-21)
a. Introduction
i. The recovery and settlement of contract claims adjustments refers to overclaims detected and
reported in assurance engagement reports prepared for the Cost and Profit Assurance Program
(CPAP). CPAP is a professional advisory program provided by the Contract Cost Analysis, Audit
and Policy Directorate (CCAAPD) to assist contracting officers in safeguarding the Crown from
overpaying on major contracts. Assurance engagements are commissioned as a result of either an
assurance strategy developed with the assistance of CCAAPD assurance advisors, or as a
response to a contracting officer’s concerns of overbilling.
ii. CCAAPD cost auditors examine the support for a contractor’s claims against the contractor’s
terms and conditions related to basis of payment and compares amounts claimed against the
contractor’s records. Assurance engagement reports can identify amounts in excess of what the
contract allows and matters of compliance, such as related to retention of records or maintenance
of proper accounting systems and controls.
iii. The level of assurance ranges from high assurance (audit engagements), to no assurance
(compilations). Descriptions of the various types of assurance engagements follow:
A. Audit engagements are designed to allow the Cost Auditor to obtain reasonable assurance
about whether "contractor-submitted" financial information is free from material
misstatement, whether due to fraud or error, thereby enabling the Cost Auditor to express
an opinion on whether the financial information is prepared, in all material respects, in
accordance with financial terms and conditions of the contract.
B. Review engagements are designed to add a measure of credibility to the subject matter
being reported on. The objective is to assess whether the information being reported on is
plausible within the framework of the appropriate criteria, which may involve review and
evaluation of systems documentation, analytical review of financial information and
interviews of contractor staff.
C. Specified audit procedure engagements are restricted in scope, such that assurance
offered may be limited to specific transactions examined or tasks performed.
D. Compilations offer no assurance other than the involvement by the accountant in the
preparation of the information. A compilation engagement consists of the accountant
receiving information from a client and then arranging it into the form of a financial
statement. The accountant ensures that the assembly of information is arithmetically

correct, but does not perform an audit or a review.
b. Throughout the assurance engagement, there is close collaboration and regular communication among
all key stakeholders, specifically the Assurance Advisor, the Cost Auditor, PWGSC contracting officer,
the client department representative, and the Cost Analyst, if the Cost Analyst was involved in
negotiating the pricing arrangements relevant to the contract(s) subject to examination.
c. The process for the recovery and settlement of contract claims adjustments starts upon receipt of the
assurance engagement report by the Assurance Advisor.
d. Notification Report and Action Plan
i. A notification report is initiated, drafted and prepared by the assurance advisor, CCAAPD. Its
purpose is to explain the key findings and recommend actions that should be taken by contracting
officers in dealing with the contractor’s claims for payment, its accounting practices, or its
internal controls. The Assurance Advisors sends this notification report, along with a copy of the
Cost Auditor’s assurance engagement report, to the contracting officer and the client department
representative. While the notification report summarizes and incorporates all matters raised in the
assurance engagement report, unlike the assurance engagement, it contains advice on actions
required by the Crown.
ii. The notification report is intended to support the contracting officer’s:
A. negotiations with the contractor on final settlement of financial claims for payment;
B. follow-up on matters of contractor compliance, as it relates to records, internal controls,

cost accounting or billing practices; and
C. documentation and approval of the disposition of findings raised in the assurance

engagement report.
iii. The notification report includes:
A. A plain language description of proposed adjustments to contractor claims for payment

with details on its findings, time period and contract(s) covered by the engagement, and, if
observed, information on internal control or accounting system weaknesses, etc.;
B. Recommendations requiring response by the contracting officer;
C. A request for an action plan in response to recommendations contained in the notification

report with expected timelines for completion.
iv. The action plan is prepared and approved by procurement and responds to recommendations
contained in the notification report, as prepared by CCAAPD.
v. The contracting officer must provide the action plan to the Assurance Advisor within 30 calendar
days of receipt of the notification report. The appropriate director of contracting must approve the
action plan.
vi. The contracting officer should provide updates to the Assurance Advisor on progress made
against the action plan on a monthly or as required basis.
e. General Assistance
Once the action plan is received from the contracting officer, assistance will be provided by the
Assurance Advisor. This could include pursuit of recoveries, recommendations for changes in internal
control in the contractor's accounting systems and so forth. Also, assistance relates to clarifying any
questions that the contracting officer may have and obtaining additional details from the Cost Auditor
related to the basis of support for adjustments to contractor claims and other matters, as may be
required.
f. Technical Support in Negotiation of Adjustments

Given the technical complexity of the Cost Auditor’s findings, procurement may require assistance of a
professional accountant to support the contractor negotiations. If such assistance is required, please
contact CCAAPD.
g. Rejection of Adjustments to Contractor Claims

Any plans to reject proposed adjustments to contractor claims must be approved prior to discussion with
the contractor. Approvals are in accordance with subsection k. below and must include the client
department, the Public Works and Government Services Canada (PWGSC) contracting authority and the
Policy, Risk, Integrity and Strategic Mangement (PRISM) Sector.
h. Reporting
i. CCAAPD closely monitors, tracks and reports on recovery and settlement actions and follows-up
with the respective contracting authorities until all recommendations contained in the notification
report have been resolved.
ii. CCAAPD prepares monthly status reports, which are distributed to the Senior Directors and
Directors Generals of Contracting.
iii. On a quarterly basis, CCAAPD will report to the Acquisitions Branch Management Committee
on the status of recovery and resolution of adjustments as well as lessons learned through the
course of this process.
i. Repayment of Overclaimed Amounts

When the contractor provides a cheque(s) to the contracting officer in repayment of overclaimed
amounts, the contracting officer must provide the following items to the Assurance Advisor within 7
calendar day of deposit:
i. Copy of contractor’s cheque(s);
ii. Copy of the Official Receipt from PWGSC’s Revenue & Receivables Cashier’s Office; and
iii. Copy of PWGSC’s Refund Coding Form indicating the financial general ledger account coding.
j. Closeout
CCAAPD is responsible for the final administrative closeout of this recovery and settlement of contract
claims process. Once the tasks contained in the action plan have been completed, the Assurance Advisor
prepares a report summarizing the disposition of contract claims adjustments and matters related to
contractor compliance for the contracting officer’s concurrence. Closeout is finalized upon the report’s
approval, as delineated below, under subsection k.
k. Approvals of Disposition of Assurance Engagement Report

Sign-off thresholds with tiered delegations are required from all three parties, namely the client
department, the PWGSC contracting authority and PRISM. The management level required for sign-off
is determined by the total dollar value of the contract claims adjustments, as stated in the notification
report. The sign-off thresholds are as follows:
i. Senior Directors: up to and including $200,000
ii. Director Generals: $200,001 to $999,999
iii. Assistant Deputy Minister, Acquisition Branch: $1,000,000 and over.
NOTE: As an interim measure until April 1, 2014, the Assistant Deputy Minister, Acquisition Branch,
must authorize the final report on the disposition of all contract claims adjustments and matters related
to contractor compliance.
10.75 Interim pricing measure

(2017-10-24)
a. The section outlines the procedures to be followed, when contract pricing for Canadian requirements is
determined based on alternative approaches that are not addressed by Section 10.65. Examples include,
when pricing is not determined by an estimate of costs plus profit, or when profit is not calculated in
accordance with 10.65(c).
b. The purpose of this measure is to encourage contracting officers to broadly consider other factors or
alternative approaches in their pursuit of better value to Canada, in the development of contract pricing.
For example, these could include:
i. Access to better pricing via gain-sharing or price reductions over time;
ii. Enhanced performance of government services to the public;
iii. Flexible contracting arrangements responsive to changing budgets and/or operational demands; or
iv. Improved contractor behaviour or customer satisfaction for goods and services rendered.
c. Pricing practices that are not addressed by PWGSC’s profit policy must respect the following
requirements:
i. The contract pricing is sanctioned by the delegated contracting authority.
ii. Concurrence is obtained from the client.
iii. The decision is documented as described in the procedures below (section 10.75 d).
iv. The record of decision showing justification, client concurrence and the contracting authority’s
approval is shared with the Price Support Directorate (PSD).
d. Procedures: Interim pricing measure (IPM)
There is one over-arching principle for all PWGSC procurement activities: Integrity. Subordinate to this
are guiding principles, which provide the framework for PWGSC procurement process.
Contracting officers must always respect these principles, regardless of whether or not the actions are
clearly set out in this manual. While the need for the IPM arose from non-competitive setting, measures
adopted under the IPM framework can be considered for competitive contracts.
The procedures are written from Canada’s perspective, such that the contracting officer is responsible to
justify and obtain approval of pricing practices not addressed by PWGSC’s profit policy. While these
procedures describe steps to be taken by contracting officers, this does not preclude the involvement of
the contractor in identifying or justifying opportunities to use pricing practices that are not addressed by
PWGSC’s profit policy.
1. The contracting officer is required to document the following:
i. Identify pricing practice proposed
ii. Explain the reasons for the pricing practice and why PWGSC profit policy was not used.
iii. Provide evidence or comparative information from other jurisdictions/sectors in support of

the proposed pricing practice, if available
iv. Identify, describe and estimate expected costs and benefits of the pricing practice to Canada
v. Explain how the pricing was calculated or determined, if applicable
vi. Explain how the pricing is intended to work
vii. Identify any limits in application of the pricing practice, such as timeframe or conditions
that apply
viii. Briefly discuss, as applicable, plans and approach to:
A. Validate contractor’s achievement of conditions that activate the pricing provisions,

including gain-sharing and non-financial performance objectives
B. For multi-year contracts, provisions for adjusting or recalibrating contract pricing,

including performance objectives
C. Review and assess the effectiveness of the pricing practice and make
recommendations for its use by others
These requirements can be addressed in the Procurement Plan, if one exists, or business case or
other decision document, as prepared for other purposes. The information provided should enable
others to understand how the pricing would work in support of the basis of payment provisions of
the contract.
2. Documentation must include evidence of program management (client) acceptance / concurrence

with the contract pricing provisions.
3. Once approved by the delegated contracting authority, notify PSD by email (TPSGC.padgamtp-
appbipm.PWGSC@tpsgc-pwgsc.gc.ca) that the interim pricing measure has been used and
provide contract number and name and contact information for follow-up by PSD. PSD will
provide instructions on how to securely submit a copy of the justification to PSD. This is required
to allow PWGSC to learn from its experience and incorporate into the PWGSC’s Pricing
Framework.
Upon request, for contracts valued at more than $20 million, PSD is available to assist contracting
officers by reviewing and offering suggestions on the justification to use pricing practices that are
not addressed by Canada’s pricing framework. Please note that, the $20 million amount is defined
as the total value of the procurement or the project, inclusive of all taxes and fees, project
management costs, definition costs, equipment/materiel costs, interim support costs, and
contingencies. Any given project may have multiple procurements to deliver the full capability or
requirement defined by the project or program.
As described in the Directive on the Use of Cost and Price Analysis Services
(http://www.gcpedia.gc.ca/gcwiki/images/d/d0/Directive_on_the_Use_of_Cost_and_Price_Analysis_FINAL_EN.pdf)
(PDF), PSD services continue to be available to assist contracting officers to provide advice on:
i. Pricing and profit calculation.
ii. Payment risks, basis of payment and contract audit clauses.
iii. Techniques to validate contractor performance in support of contract administration.
Annex 10.1: Determination of Fixed Capital Employed Applicable to a Contract

(2010-01-11)
Effective 2015-02-25 - The content for this page has been temporarily removed and is being updated.
Suppliers and the public: You may request a copy of the information by contacting the national InfoLine at 1-
800-811-1148. The line is staffed Monday to Friday from 07:30 to 17:00 Eastern Standard/Daylight time.
Government of Canada procurement officers: You may find references to this information in the Supply
Manual Archive (http://www.gcpedia.gc.ca/wiki/Supply_Manual_Archive) .
Questions and requests for information may also be sent via the Buyandsell.gc.ca Web form found on the
Contact Us page.
Annex 10.1.1: Examples to Determine the Fixed Capital Employed

(2010-01-11)
Contact Us page.
Annex 10.2: Examples to Determine the Working Capital Employed

(2010-01-11)
Contracts of $250,000 and more
Examples of Calculation
EXAMPLE 1 - ASSUMPTIONS:
1. The contract period is 12 months.
2. Total contract costs are $1,313,190 of which $26,500 is for depreciation.
3. Costs incurred are on an even basis month by month.
4. Progress payments at 85% are paid monthly.
5. The time between forwarding the invoice and receipt of payment is 1 month.
Contracts of $250,000 and more Calculation Example 1
Contract Cumulative Monthly

Allowable Contract Cost Monthly Working
Revenue Less Working Capital
Month excluding Depreciation Capital Employed
Profit Employed
$ $
$ $
1 107,224 -- 107,224 107,224

2 107,224 -- 107,224 214,448
3 107,224 93,017 14,207 228,655
4 107,224 93,018 14,206 242,861
5 107,224 93,017 14,207 257,068
6 107,224 93,018 14,206 271,274
7 107,224 93,017 14,207 285,481
8 107,224 93,018 14,206 299,687
9 107,224 93,017 14,207 313,894
10 107,224 93,018 14,206 328,100
11 107,224 93,017 14,207 342,307
12 107,206 93,018 14,208 356,515
13 -- 93,017 (93,017) 263,498
14 -- 289,998 (289,998) (26,500)
1,286,690 1,313,190 (26,500) 3,484,512
Working Capital Employed Applicable to the Contract for profit purposes -

$3,484,512 ÷ 12 = $290,376
EXAMPLE 2 - ASSUMPTIONS:
1. Contract period is 18 months.
2. Contract is for the design, manufacture and supply of 24 widgets at a cost per widget of $40,000 for
total costs of $960,000.
3. The total costs include an amount of $84,000 for depreciation.
4. Costs are incurred on a month by month basis as shown in the attached schedule.
5. Invoices are made on delivery and the delivery schedule is as follows:

1 widget in each of the 8 th, 9 th and 10 th months.
2 widgets in each of the 11 th and 12 th months.
3 widgets in each of the 13 th through 17 th months inclusive.
2 widgets in the 18 th month.
6. The time between forwarding the invoice and receipt of payment is 1 month.
Contracts of $250,000 and more Calculation Example 2
Allowable Contract Contract Monthly Cumulative Monthly

Cost excluding Revenue Working Capital Working Capital
Month
Depreciation Less Profit Employed Employed
$ $ $ $
1 24,000 -- 24,000 24,000
2 24,000 -- 24,000 48,000
3 30,000 -- 30,000 78,000
4 30,000 -- 30,000 108,000
5 40,000 -- 40,000 148,000
6 40,000 -- 40,000 188,000
7 60,000 -- 60,000 248,000
8 60,000 -- 60,000 308,000
9 60,000 40,000 20,000 328,000
10 60,000 40,000 20,000 348,000
11 70,000 40,000 30,000 378,000
12 70,000 80,000 (10,000) 368,000
13 60,000 80,000 (20,000) 348,000
14 60,000 120,000 (60,000) 288,000
15 60,000 120,000 (60,000) 228,000
16 50,000 120,000 (70,000) 158,000
17 40,000 120,000 (80,000) 78,000
18 38,000 120,000 (82,000) (4,000)
19 -- 80,000 (80,000) (84,000)
876,000 960,000 (84,000) 3,584,000
Working Capital Employed Applicable to the Contract for profit purposes -

$3,584,000 ÷ 12 = $298,667
Annex 10.3: Examples of Profit Calculations

(2010-01-11)
Contact Us page.
Annex 10.4: Reasons for the non-applicability of certain costs when utilizing Contract
Cost Principles 1031-2
(2013-01-28)
The following costs are considered non-applicable to government contracts when utilizing contract cost
principles 1031-2 for the reasons given.
1. Allowances for interest on invested capital, bonds, debentures, bank or other loans together with related
bond discounts and finance charges
Interest on borrowing, however represented, is not an acceptable cost. There are several reasons for this.
In the first place, it is impossible to know how much of a contractor's capital should be properly
provided by equity capital and how much by borrowed capital. If it were fair to allow interest on the
borrowed capital (the financial reward to the lender), it would also seem fair to allow dividends (the
financial reward to the investor). As dividends are recognized as a distribution of profits and therefore
not an item of cost, so too with interest. Another consideration is the determination of what a
contractor's capital properly should be, regardless of what it may actually happen to be. If interest were
to be an acceptable cost, then a contractor financed by bonds, debentures or long term loans would be in
an advantageous position compared to a contractor financed by the sale of equity. The government
recognizes the cost-of-money (interest) associated with capital employed, however financed, as a factor
in the calculation of profit.
2. Legal, accounting and consulting fees in connection with financial re-organization, security issues,
capital stock issues, obtaining of patents and licences and prosecution of claims against Canada
A distinction should be drawn between the occasional expenses in relation to the raising of capital
referred to here, which are not an acceptable cost, and the normal recurring expenses associated with the
day-to-day management and recording of capital transactions, which are an acceptable cost. The latter
expenses include those arising from the registry and transfer of share capital when they form part of the
activity of the company secretary, costs of share holders' meetings, normal proxy solicitations, reports to
shareholders, submission of required reports to government agencies, reasonable directors' fees and
incidental expenses of directors and for committee meetings.
3. Losses on investments, bad debts and expenses for the collection thereof
Since interest on capital invested in a contractor's business is not considered a business operating cost,
neither is interest received by a contractor from funds invested outside the business considered a
necessary credit against business operating costs. However, it also follows that any losses sustained by a
contractor from these outside investments are not considered to be a business operating cost and thus are
not acceptable on government contracts.
Since the government as a debtor always pays its just debts, while it is only the commercial customers
who have bad debts on a contractor's books, the losses due to bad debts and the expenses of collection
thereof are not an acceptable cost to government contracts.
4. Losses on other contracts

An excess of costs over income on a contract is not acceptable as a cost to any other contract. This
principle also applies to application by a contractor of preferred overhead rates to certain contracts.
Where this occurs, the excess of actual overhead over the preferred overhead amount will not be
absorbed by government contracts.
5. Federal and provincial income taxes, excess profit taxes or surtaxes and/or special expenses in
connection therewith
In general, taxes which a contractor is required to pay and which are computed in accordance with
sound accounting principles are acceptable costs, except for those included under this heading and/or
other taxes in connection with financing, refinancing or re-organizing.
On the other hand, all tax refunds, federal or provincial, are not required to be applied to reduce any
related expenses.
6. Provisions for contingencies

A contingency liability is a liability which could arise on the happening of some event which may or
may not occur. The initial provision or increase of funding for a contingent liability is considered to be a
setting aside of earned profits to meet possible liabilities against future profits and not a business
operating cost and therefore not an acceptable cost to government contracts.
There is one exception to the above and that is in respect of the acceptability of costs for the provision
of warranties. In any firm price contract, a contractor may include as a cost a reasonable amount to be
set aside as a provision for the absorption of expenses associated with warranties given under the terms
of the contract. In determining a reasonable amount, the following factors should be taken into account:
a. the amounts provided for warranty expenses should be separate for each distinctive product or
family of products;
b. the amounts provided should reflect, where available, the previous performance of the product(s)
in regard to warranty, using an average of three to five years;
c. the cost of any provision for warranty charged to a specific contract should reflect any difference
in the warranty period from that normally granted by a contractor on the product(s); and
d. the costs should be net of any warranty contract sales to other customers.
7. Premiums for life insurance on the lives of officers and/or directors where proceeds accrue to the
contractor
Similarly, proceeds from such life insurance need not be applied to reduce any cost to the contractor.
Premiums on this type of insurance are not acceptable in government contracts since Canada does not
derive any benefit therefrom.
8. Amortization of unrealized appreciation of assets

See Annex 10.5.2: Cost Interpretation Bulletin - Number 02 Depreciation, "Depreciation".
9. Depreciation of assets paid for by Canada

See Annex 10.5.2: Cost Interpretation Bulletin - Number 02 Depreciation, "Depreciation".
10. Fines and penalties

The amounts of fines and penalties imposed by federal, provincial or local authorities are not an
acceptable cost to government contracts, for to accept such amounts would be tantamount to the
government's supporting financially the offense which gives rise to the imposition of a fine or penalty.
11. Expenses and depreciation of excess/idle facilities

For this purpose, excess/idle facilities means the sum of all fixed assets appearing in a contractor's
books of account which are not in use or for which no use is anticipated within a reasonable period. The
expenses associated with the maintenance and/or the amounts of depreciation attributable to such fixed
assets are not acceptable costs to government contracts.
The expenses and/or depreciation of excess/idle facilities, as defined above, which the government has
ordered retained for defence purpose, should be charged to a separate contract set up for that purpose.
12. Unreasonable compensation for officers and employees

The extra costs associated with the above are not an acceptable charge to government contracts.
13. Product development or improvement expenses not associated with the product being acquired under
the contract
See Annex 10.5.7: Cost Interpretation Bulletin - Number 07 Research and Development Expenses.
14. Advertising, except reasonable advertising of an industrial or institutional character placed in trade,
technical or professional journals for the dissemination of information for the industry or institution
a. Assuming that a contractor's employees enhance their knowledge by reading trade, technical or
professional journals, and, in turn, government contracts benefit from this increased knowledge
by way of increased efficiency and productivity, and that the advertising supports these
publications, the expenses of advertising in this manner are an acceptable cost to government
contracts, provided:
i. it is in the nature of institutional or support advertising only, and not in the form of display
advertising;
ii. it does not advertise a particular product or service of a contractor;
iii. it is placed in trade, technical or institutional journals (financial publications are primarily
for investors, not for an industry or trade; and so do not qualify); and
iv. the cost is reasonable.
b. Expenses associated with the help wanted advertisements are an acceptable cost, provided they
are reasonable and only for the purpose of recruiting personnel.
c. The expenses associated with advertising through any media for other than (1) and (2) above, are
not an acceptable cost to government contracts. For this purpose, advertising media are:
magazines, newspapers, television and radio programs or "commercials", brochures, direct mail,
outdoor advertising, conventions, exhibits, free goods and samples.
15. Entertainment expenses

Although expenses for amusement, diversion, social activities and incidentals relating thereto are not
acceptable, the expenses associated with meetings and conferences, when called for the dissemination of
technical information or discussion of production problems and the like, are acceptable. These latter
expenses may include those for meals, transportation, rental of meeting places and other incidentals
provided they are reasonable.
16. Donations, except those to charities registered under the Income Tax Act
Donations, except those to political parties, are an acceptable cost provided they comply with the
Income Tax regulations and are taken into overhead in the period they are paid rather than pledged.
17. Dues and other memberships other than regular trade and professional associations
The expenses associated with membership, either of the company as a whole or individual officers or
employees in associations whose prime purpose is to provide entertainment or recreation, are not an
acceptable cost to government contracts.
18. Fees, extraordinary or abnormal, for professional advice in regard to technical, administrative or
accounting matters, unless approval from the Contracting Authority is obtained
The fees associated with obtaining this assistance are not an acceptable cost, unless a contractor
demonstrates, to the satisfaction of the contracting officer, the circumstances giving rise to the need for
this assistance.
19. Compensation in the form of dividend payments or calculated based on dividend payments
Dividends are not organization costs; they are a distribution of earnings to shareholders. Therefore since
dividends are not organization operating costs they are disallowed contract costs.
20. Compensation calculated, or valued, based on changes in the price of corporate securities, such as stock
options, stock appreciation rights, phantom stock plans or junior stock conversions; or, any
compensation in the form of a payment made to an employee in lieu of an employee receiving or
exercising a right, option, or benefit
Disallowing this type of expense as a contract cost is already addressed as per paragraph f. provisions
for contingencies of section 07 Non-applicable Costs of SACC General Conditions Contract Cost
Principles 1031-2. This contingent liability is the setting aside of a provision to retain the employee and
motivate future performance, based on events which may or may not occur. The provision for a
contingency is considered to be a setting aside of earned profits to meet possible future liabilities and is
not a business operating cost. Therefore it is not an acceptable cost to government contracts.
Further, compensation based on changes in securities price is not based on work actually performed and
thus, is unallowable. Regardless of the name given to the plan, stock-based compensation scenarios
continue to emerge, and rather than trying to cover each scenario individually, in Contract Cost
Principles 1031-2, a general disallowance addresses compensation based on changes in prices of
corporate securities.
Annex 10.5: Cost Interpretation Bulletins 01 to 19

(2010-01-11)
Annex 10.5.1: Cost Interpretation Bulletin - Number 01 Excess Facilities

(2010-01-11)
Section 07 (k) of Contract Cost Principles 1031-2 provides that the expenses and depreciation of excess
facilities shall be considered non-applicable costs to the contract.
This Bulletin explains the costs that should be considered for the purpose of the application of the above
section.
DEFINITION
For the purpose of this Bulletin:
"Facilities" in this context means plant or any portion thereof (including land integral to the operation),
equipment individually or collectively, or any other tangible capital asset, wherever located, and whether owned
or leased by the contractor.
INTERPRETATION
The costs that are associated with facilities that are excess to the contractor's current needs should be examined
to determine if these costs are non-applicable.
In examining these costs, the following factors should also be considered:
a. Vacant, or largely vacant space;
b. Inactive or unused equipment;
c. Idle capacity required for stand-by purposes;
d. Indirect supporting staff no longer required either in full or part;
e. Other costs such as maintenance, repair, rent, property taxes, insurance, depreciation, etc.;
f. Management costs that should be reduced because of the reduction in active facilities.
Annex 10.5.2: Cost Interpretation Bulletin - Number 02 Depreciation

(2013-01-28)
Depreciation
Paragraph 04.2.e. of SACC General Conditions 1031-2 Contract Cost Principles provides that Indirect Costs
(Overhead) may include a reasonable provision for depreciation.
In addition, subsection 07 of General Conditions 1031-2 Contract Cost Principles disallows the following:
a. finance charges
h. amortization of unrealized appreciation of assets
k. expenses and depreciation of excess facilities
This Bulletin explains what is meant by a reasonable provision for depreciation for the purpose of the
application of the above paragraph 04.2.e.
Definitions
"Asset Laid Down Cost"

is the cost incurred by a contractor to acquire an asset. This includes the contractor’s invoice price
(less trade discount) plus any applicable charges for transportation, exchange, customs duties,
brokerage duties and applicable taxes. (Coût livré d’un élément d’actif)
"Asset Recognition"
the cost of an item shall be recognized as an asset if, and only if, it is probable that future
economic benefits associated with the item will flow to the contractor; and the cost of the item
can be measured reliably. (Comptabilisation d’une immobilisation)
"Available and In Use"
is the date that the asset is first used to earn income. (Prêt et mis en service)
"Borrowing Cost"
includes exchange differences arising from foreign currency borrowings to the extent that they are
regarded as an adjustment to interest costs, interest expense calculated using the effective interest
method, and finance charges in respect of finance leases. (Coût d’emprunt)
"Capital Cost Allowance"
is a deduction, akin to depreciation, allowed in computing income for tax purposes. (Déduction
pour amortissement)
"Cost"
is the asset laid down cost plus amount of consideration given up to, construct, develop, or better
an item of property, plant and equipment including installing it at the location and in the condition
necessary for its intended use less any applicable portion of any income, rebate, allowance, or any
other credit relating to any applicable direct or indirect cost, received by or accruing to the
contractor and related capitalized borrowing costs included in the cost of the asset. The cost as
defined for Contract Cost Principles 1031-2 does not include an estimate of the costs of
dismantling and removing the item and restoring the site on which it is located. (Coût)
"Cost Model"
is an item of Property, Plant and Equipment that shall be carried at its cost less any accumulated
depreciation. (Modèle de coûts)
"Depreciation"
is the gradual exhaustion of the service capacity of fixed assets which is not restored by
maintenance practices. It is the consequence of such factors as use, obsolescence, inadequacy, and
decay. (Amortissement)
"Depreciation Accounting"
is an accounting procedure in which the cost of a fixed asset less the estimated residual value, if
any, is distributed over its estimated useful life in a systematic and rational manner. (Imputation
axée sur l’amortissement)
"Depreciation Base"
is the asset cost less estimated residual value. (Assiette d’amortissement)
"Diminishing, Declining or Reducing Balance Depreciation"
is the depreciation amount computed by a constant fraction of the depreciated cost so that the
depreciation base is written off by the estimated date of retirement. (Amortissement selon le
solde décroissant)
"Production Depreciation"
is the depreciation amount computed by that portion of the depreciation base that the production,
or use during the period, bears to the total estimated production or use to be obtained from the
asset. (Amortissement fonctionnel)
"Renewal (Replacement) Accounting"
is an accounting procedure in which no charge for expense is made for a fixed asset until
replacement occurs; the cost of the replacement rather than the cost of the original asset is then
charged to expense. (Imputation axée sur le remplacement)
"Retirement Accounting"
is an accounting procedure in which no charge to expense is made for a fixed asset until it is
removed from service; the original cost is charged to overhead in the year the asset is retired.
(Imputation axée sur la cession)
"Straight Line Depreciation"
is the depreciation amount computed by dividing the depreciation base by the estimated number
of periods of service life. (Amortissement linéaire)
"Sum-of-the years'-digits Depreciation"
is the depreciation amount whereby the depreciation base is allocated to the individual years on a
reducing basis, by multiplying it by a fraction in which the numerator is the number of years + 1
of estimated life remaining, and the denominator is the sum of the series of numbers representing
the years in the total estimated life. (Amortissement proportionnel à l’ordre numérique des
années inversées)
Interpretation
To be considered reasonable any provision for depreciation should be determined in accordance with the
following:
1. For the purpose of Depreciation, an item of Property, Plant and Equipment shall be measured based on
its original cost per the cost model less related borrowing costs included in the cost of the asset.
Amortization of unrealized appreciation of assets will not be considered as it reappraises historical cost
to fair value which is not representative of the original cost.
2. The amount should be calculated using one of the following methods on a consistent basis:
a. Capital Cost Allowance;
b. Straight Line Depreciation;
c. Diminishing, Declining or Reducing Balance Depreciation;
d. Production Depreciation;
e. Sum-of-the-years' digits Depreciation.
The following two methods are not acceptable:

f. Renewal (Replacement) Accounting; and
g. Retirement Accounting.
3. The amount calculated using Capital Cost Allowance (CCA) rates should be no higher than the basic
CCA rates published by Canada Revenue Agency (CRA) for income tax purposes. Occasionally, CRA
permits the use of accelerated CCA rates for income tax purposes, but they are not permitted for General
Condition 1031-2 purposes.
4. The total amount of depreciation for any one asset should not exceed 100 percent of that asset's original
cost.
5. In general, depreciation should be calculated and included in the cost of production only for accounting
periods subsequent to the asset being available and in use. During the first year of use, the depreciation
amount may be based on the exact fraction of the fiscal year, or by using the half-year convention, if
that is the contractors practice. This latter method assumes that all capital acquisitions take place at mid-
year.
6. Assets purchased specifically for use on contracts should be capitalized and depreciated using the
contractor's normal method, unless title is taken by Canada, or Canada pays for the asset under an
Assistance Program.
7. Canada's funding in any form, including direct or indirect benefits such as the contribution for capital
assistance, should be accounted for using the cost reduction approach. The amount of all such funds
received by, or credited to the contractor's account should be deducted from the related purchase price of
the assets, with any depreciation or amortization calculated on the net amount. Investment Tax Credit on
the other hand shall not be deducted from the fixed asset acquisition cost.
8. Leasehold improvement costs are similar to capital additions and for depreciation purposes should be
amortized over the lesser of the expected useful life of the leasehold improvement or the non-renewable
term of the lease.
Annex 10.5.3: Cost Interpretation Bulletin - Number 03 Lease Costs

(2010-01-11)
Under the terms of Contract Cost Principles 1031-2 lease costs are applicable costs for inclusion in a
contractor's overhead or as direct charge to the contract, if they are reasonable.
This Bulletin explains what is meant by reasonable lease costs.
DEFINITIONS
"Lease"
is the conveyance by a lessor to a lessee of the right to use a tangible asset usually for a specific
period of time in return for rent.
"Operating Lease"
is a lease in which the lessor does not transfer substantially all the benefits and risks incident to
the ownership of the property.
"Capital Lease"
is a lease that transfers substantially all the benefits and risks incident to ownership from the
lessor to the lessee.
"Executory Costs"
are costs related to the operation of the leased property (e.g. insurance premiums, maintenance
costs, and property taxes).
"Interest Rate Implicit in the Lease"
is the discount rate that, at the inception of the lease, causes the aggregate present value of:
the minimum lease payments excluding that portion of the payments representing
executory costs to be paid by the lessor and any profit on such costs; and
the unguaranteed residual value accruing to the benefit of the lessor, to be equal to the fair
value of the leased property to the lessor at the inception of the lease.
"Rate for incremental borrowing"
is the interest rate that, at the inception of the lease, the lessee would have incurred to borrow,
over a similar term and with similar security for the borrowing, the funds necessary to purchase
the leased asset.
"Unguaranteed Residual Value"
is that portion of the residual value of leased property which is not guaranteed or is solely
guaranteed by a related party to the lessor.
INTERPRETATION
To be considered reasonable any lease cost should be determined in accordance with the following.
1. The type of lease must be correctly identified as either an operating lease or a capital lease. In the case
of an operating lease, the actual rental cost paid is considered to be a reasonable cost. In the case of a
capital lease, the depreciation amount calculated on the capitalized value of the asset in the lease over
the lease term or economic life of the asset, is considered to be a reasonable cost.
2. A lease should be classified as a capital lease if one of the following criteria are met:
a. the lease specifies the transfer of the property to the lessee by the end of the lease term; or
b. the lease contains a bargain purchase option; or
c. the lease term is such that the lessee will receive substantially all of the economic benefits from
the use of the leased property over its life span, which will normally occur if the lease term covers
75% or more of the economic life of the leased property; or
d. the present value of the minimum lease payments, excluding any executory costs, is equal to
substantially all (usually 90% or more) of the fair value of the leased property at the inception of
the lease; the discount rate to be used in determining the present value of the minimum lease
payments for this purpose should be the lower of the lessee's rate for incremental borrowing and
the interest rate used in the lease, if known.
3. For a capital lease, the value at which it will be capitalized should be the lower of the present value of
the minimum lease payments as described in 2 d) or the fair value of the asset (usually this is the
purchase value of the asset).
Annex 10.5.4: Cost Interpretation Bulletin - Number 04 Travel Costs

(2010-01-11)
Under the terms of Contract Cost Principles 1031-2 reasonable travel costs are applicable costs for inclusion in
a contractor's overhead or as a direct charge to contract.
This Bulletin explains the conditions to be met before any specific travel costs are charged directly to the
contract.
DEFINITION
"Travel Costs" are the costs for transportation, lodging, meals and incidental expenses incurred by a contractor's
personnel on official company business. Costs for transportation may be based on mileage rates, actual costs
incurred, or on a combination thereof, provided the method used results in a reasonable charge. Costs for
lodging, meals and incidental expenses may be based on per diem, actual expenses, or a combination thereof,
provided the method used results in a reasonable charge.
INTERPRETATION
1. In order for travel costs to be acceptable as direct costs to a contract, the following conditions must be
met:
a. such costs are directly attributable to the performance of the work under the contract;
b. the practice of charging travel costs to a contract is consistently followed in the costing of both
government and non-government work; and
c. all directly charged travel costs are eliminated from indirect costs allocated to government
contracts.
2. A reasonable amount/percentage may be added to travel costs allocated directly to a contract to cover
applicable G & A costs, provided it is the contractor's usual and consistent practice to do so.
Annex 10.5.5: Cost Interpretation Bulletin - Number 05 Head Office Expense

(2010-01-11)
Under the terms of Contract Cost Principles 1031-2 expenses allocated to a contractor which is a segment of an
organization by the Head Office of that organization are applicable costs for inclusion in the contractor's
overhead provided that the amount allocated is reasonable.
This Bulletin explains the method to be used in the allocation of Head Office expenses in order for the amount
allocated to be considered reasonable.
DEFINITIONS
"Head Office"
is an office responsible for the policy direction and management of two or more, but not
necessary all, segments of an organization.
"Segment"
is one of two or more branches, divisions, product departments, plants, or other subdivisions of an
organization reporting directly to a parent/head office, usually identified with responsibility for
profit and/or producing a product or service.
INTERPRETATION
1. For the allocation of any expenses to be acceptable, a Head Office/Segment relationship must exist,
generally with company policies describing the basis of allocation for these expenses.
2. For the allocation of the expenses to be considered reasonable all, or any combination of the following
three methods should be used.
a. Directly Chargeable- Those expenses included within the Head Office expense pool to be
allocated which can be identified as having been incurred specifically and totally for one
particular segment. Such expenses should be allocated directly to the particular segment, to the
extent practicable.
b. Separately Allocated- Those individual, or groups of expenses which are allocated only to a
limited group of corporate segments. Such expenses are not usually incurred for specific segments
but possess objective, measurable relationships to the segments and should be grouped in
homogeneous pools for subsequent allocation on a basis which represents these objective,
measurable relationships.
c. Residual- These represent the remaining expenses which are allocated to all, or most corporate
segments on an overall basis. These expenses should be allocated to segments using a base or
bases which represent the total activity of the segments (see 3. below).
A three part exercise for allocation, as described above, would only be necessary where the
dollars concerned were material. In less significant situations, a combination of the Directly
Chargeable and the Residual methods might suffice. In low-dollar value situations, the Residual
method alone might be appropriate.
3. There are many and varied bases which might be used to allocate residual expenses. However, to be
accepted and considered reasonable, the base(s) selected must be representative and consistently applied
to all segments of the organization. The following are examples of bases for allocation which are often
used:
a. Number of personnel in each segment of the organization.
b. Dollar value of production in each segment of the organization.
c. Cost of goods sold in each segment of the organization.
d. Total sales in each segment of the organization.
4. Allocations derived from an arbitrary forecasted distribution base are not considered acceptable.
Historical and present cost data used to derive the allocation base, along with future economic
conditions should be considered and documented.
Annex 10.5.6: Cost Interpretation Bulletin - Number 06 Pension Costs

(2010-01-11)
Section 04(2)(c) of Contract Cost Principles 1031-2 states in part, that "indirect costs may include such items as
fringe benefits (the contractor's contribution only)" in overhead pools.
Pension costs are normally included as a fringe benefit in a contractor's overhead pools. This interpretation
explains the determination and measurement of pension costs.
DEFINITIONS
For the purposes of this Bulletin:
"Actuarial Assumptions"
are presumptions about future events that will affect pension costs and obligations. These include
theories concerning mortality, withdrawal, disability, retirement, changes in compensation,
interest on accrued pension benefits, investment earnings, and asset appreciation or depreciation.
"Actuarial Cost Methods"
are methods used to determine the cost of providing pension plan benefits and to allocate that cost
to specific time periods.
"Current Service Cost"
is the cost of anticipated future retirement benefits accrued during any year usually determined on
an actuarial basis; it represents the aggregate estimated cost for one year's service by each
employee who is a member of the plan.
"Defined Benefit Pension Plan"
specifies either the benefits to be received by employees after retirement or the method for
determining those benefits.
"Defined Contribution Pension Plan"
is one in which the employer's contributions are fixed, usually as a percentage of compensation,
and allocated to specific individuals. The pension benefit for each employee is the amount that
can be provided at retirement based on the accumulated contributions made on that individual's
behalf and investment earnings on those contributions.
"Experience Gain or Loss"

is the measure of the difference between the expected and actual experience of the plan.
"Past Service Cost"
is the estimated cost of future retirement benefits accrued in the years prior to the adoption of a
pension plan; these costs are normally charged to operations over a reasonable period of years.
"Pension Plan"
is any arrangement (contractual or otherwise) by which a program is established to provide
retirement income to employees.
INTERPRETATION
The reasonableness of these proposed pension cost amounts should be determined in accordance with the
following:
1. The terms and conditions of the plan are determinant factors in measuring the obligations.
2. The amount of pension cost for a cost accounting period is periodically determined by use of an
actuarial cost method which measures separately each of the components of pension costs.
3. Each Actuarial Assumption used to measure pension cost must be separately identified and represent the
contractor's best estimates of anticipated experience under the plan, taking into account past experience
and reasonable expectations.
4. Either Defined Contribution Pension Plans or Defined Benefit Pension Plans are acceptable in the
calculation of pension costs in accordance with Government Contract Cost Principles 1031-2.
Under Defined Contribution Pension Plans the employer's responsibility is simply to make a
contribution each year based on the formula established in the plan. The pension cost for a cost
accounting period will normally be the current and past service cost.
Accounting for Defined Benefit Pension Plans is quite complex, because the benefits are defined in
terms of uncertain future variables, an appropriate funding pattern must be established to assure that
enough funds will be available at retirement to meet the benefits promised. The pension cost for a cost
accounting period will normally be the aggregate of current service, plus past service, plus interest,
minus expected return on plan assets, plus or minus experience gains/losses.
Annex 10.5.7: Cost Interpretation Bulletin - Number 07 Research and Development

Expenses
(2012-07-16)
Paragraph 04 (02) (h) of Contract Cost Principles 1031-2 states that: "general research and development
expenses as considered applicable by Canada" may be included in Indirect Costs (Overhead). Paragraph 7 (m)
of Contract Cost Principles 1031-2 states that: "product development or improvement expenses not associated
with the product being acquired under the contract" are considered non-applicable costs to the contract.
This Bulletin explains the difference between General Research and Development Expenses and Product
Development or Improvement expenses in the light of these two sections of Contract Cost Principles 1031-2. It
also explains the treatment required for each of the different type of expenses in a contractor's cost accounting
practices for acceptability in contracts.
DEFINITIONS
"General Research and Development"

is a planned investigation undertaken with the hope of gaining new scientific or technical
knowledge and understanding. Such investigation may, or may not be directed towards a specific
practical aim or application.
"Product Development and/or Improvement"
is a systematic program of work, going beyond basic and applied research which is directed
towards the creation of a new or improved product, system, component or material, substantially
in a marketable form, but excluding any manufacture beyond completion of the new and
improved product's prototype.
INTERPRETATION
1. Company funded research and development should be divided into two distinct expenditure categories:
a. General Research and Development; and
b. Specific Product Development and/or Product Improvement.
2. General Research and Development
a. The expenditures relating to general research and development should be included in overhead
and allocated to the contractor's total business activity which would exclude those items such as
resale activity, warranty, etc., within the current fiscal year.
3. Specific Product - Product Development/Product Improvement
a. The Costs within these categories of research should not be included in overhead at the time it is
incurred. Proper treatment of these expenditures would be to extract them from overhead pools
and segregate these costs for later recovery against product sales.
b. Negotiators should consider, as an aspect of their negotiations, overhead applications to these

product development costs. In the case of G & A overhead, either the costs are applied at the time
that the Product Development Costs are incurred, or at the time the Product Development Costs
are recovered against product sales. For guidance on the timing of application of G & A overhead
costs, negotiators may look at other G & A recovery applications made to Product Development
by the company.
c. The recovery of the contractor's product development costs should, in the majority cases, be
accomplished through the amortization of these product development costs against the sales of the
family of products to which the product development pertained.
d. The contractor may recover these expenses on the relevant product sales, including government
sales, even if the related expenditures have been written off to the profit and loss account in the
year originally incurred. However, in this case the contractor must maintain sufficient records to
demonstrate the costs to be recovered and also to substantiate that these costs had not already
been recovered in overhead.
4. The following are examples of activities that typically would be excluded from any general research and
development and product development project:
a. engineering follow-through in an early production phase;
b. quality control during commercial production, including routine product testing;
c. trouble-shooting in connection with breakdowns during production;
d. routine, or periodic alterations to existing products, production lines, manufacturing processes,

and other ongoing operations, even though such alterations may represent improvement;
e. adoption of an existing capability to a particular requirement, or customer's need, as part of a

continuing commercial activity;
f. routine tools, jigs, mould, and dies design;
g. activity, including design and construction engineering, related to the construction, relocation,
rearrangement, or facilities start-up, or equipment, whose sole use is for a particular R&D project,
unless specifically approved by the technical authority;
h. all market research activities, including those directed at market development, verification,
identification, demonstration, preference, and customer acceptance development;
i. pre-production and proposal costs;
j. cost overruns on previous firm price development contracts.
5. General Research and Development (R&D) - Other Factors
a. Costs acceptable as general research and development must relate to projects classified as basic
research, or applied research. Costs applicable to Product Development projects partially funded
by Canada are not acceptable as general research and development costs. Product Development is
not considered an overhead item and is recovered by a separate product development expenditure
recuperation rate.
b. In those instances where the general research and development expenditures are the majority of
the total G & A cost pool, this fact must be highlighted in the cost rate negotiation report, or a
separate general research and development overhead rate developed.
c. Significant differences between the negotiated and actual costs incurred must be taken into
consideration when reviewing audited costs, or negotiating future years general research and
development costs.
6. Product Development (PD) - Other Factors
a. Company funded product development will inevitably produce non-marketable products which
would not allow these costs to be recovered on related product sales. However, there may be
marketable by-products or product advances made.
7. Product Development Amortization
a. Contractors proposing to amortize PD costs of the product developed against future sales to
Canada, must submit an annual cost schedule to the responsible Directorate.
Annex 10.5.8: Cost Interpretation Bulletin - Number 08 Bid and Proposal Expenses
(2010-01-11)
Under paragraph 04 (02) (g) of Contract Cost Principles 1031-2, selling and marketing expenses which could be
considered to include amongst other things, Bid and Proposal Expenses, are listed as one of the items generally
considered to be indirect costs. However, in some instances contractors follow a consistent practice of charging
Bid and Proposal Expenses of a successful Bid or Proposal direct to the resulting contract.
This Bulletin explains the criteria under which the direct charging of Bid and Proposal Expenses to resulting
contracts is acceptable to PWGSC.
DEFINITION
"Bid and Proposal Expenses" are the costs incurred in preparing, submitting, and supporting bids and proposals,
(whether or not solicited), on potential contracts, including:
a. direct administrative effort, for the physical preparation of the technical proposal documents, and also
the technical and non-technical effort for the preparation and publication of cost data, and other
administrative data necessary to support the contractor's bids and proposals;
b. technical effort, incurred to specifically support a contractor's bid, or proposal, including the system and
concept formulation studies, and the development of engineering and production data; and,
c. purchased services and supplies incurred to specifically support a bid or proposal.
INTERPRETATION
Bid and Proposal Expenses are acceptable to PWGSC as a direct charge to resulting contracts in cases of
proposals resulting in subsequent contract negotiations, provided that the bid and proposal expenses are clearly
denoted in the proposal and contract documents as forming part of the agreed contract price.
Annex 10.5.9: Cost Interpretation Bulletin - Number 09 Selling and Marketing Expenses
(2010-01-11)
Paragraph 04 (02) (g) of Contract Cost Principles 1031-2 permits selling and marketing expenses associated
with the product or service being acquired under a PWGSC contract, providing they are reasonably and
properly incurred, to be an acceptable cost to the contract.
This Bulletin explains what constitutes reasonable selling and marketing expenses and how an appropriate share
of these expenses for allocation to an PWGSC contract is to be determined.
INTERPRETATION
1. In determining the reasonableness of selling and marketing expenses, consideration shall be given to:
a. the nature and amount of these expenses in the light of the expenses which a prudent individual
would incur in the conduct of a competitive business;
b. the proportionate amounts expended as between government and commercial business;
c. the trend and comparability of the contractor's current period cost in relation with prior periods;
d. the general level of such costs within a contractor's industrial sector;
e. the nature and extent of the sales effort in relation to the cost thereof and to the contract value.
2. Selling and Marketing Expenses may include reasonable product demonstration expenses incurred for
attendance at trade shows and fairs. However, the following expenses are considered non-applicable:
a. Entertainment Expenses, i.e. expenses for amusement, diversion, social activities and incidentals
relating thereto. However, expenses associated with meetings and conferences, when called for
the dissemination of technical information or discussion of production problems and the like,
including the reasonable cost of meals, transportation, rental of meeting places and other
incidentals, are acceptable.
b. Advertising Expenses, except for expenses referred to in 1031-2 as being acceptable, i.e. those
expenses associated with reasonable advertising of an industrial or institutional character placed
in trade, technical or professional journals for the dissemination of information for the industry or
institution.
c. Costs of retained lobbyists, as described in the Appendix M, Lobbyists and Contracting, of the
Treasury Board Contracting Policy, who are paid on a contingency fees basis.
d. Unreasonable Commissions to Selling Agents.
e. Unspecified Payments to a Third Party.
f. Depreciation or Write-off Costs of Demonstration Equipment.
3. Allocation to Contracts
To enable a reasonable and justifiable share of selling and marketing expenses to be charged against
PWGSC contracts, the following practice should generally be adopted:
a. selling and marketing expenses should be clearly identified by a contractor as distinct from other
indirect costs to the extent, where warranted, of creating a separate cost pool for these expenses;
b. where a contractor manufactures more than one particular product or provides more than one
particular service, the selling and marketing expenses specifically identifiable with each particular
product or service should be allocated directly thereto with any general expenses being prorated
equitably across all products or services; and then
c. a pro-rata share of the selling and marketing expenses allocated in accordance with b) above to
the particular products or services or family of products or services being acquired under the
PWGSC contract included in the applicable overhead costs of the contract.
Annex 10.5.10: Cost Interpretation Bulletin - Number 10 Severance Payments

(2010-01-11)
Contract Cost Principles 1031-2 state that: "The total cost of the Contract must be the sum of the applicable
direct and indirect costs which are, or must be reasonably and properly incurred and/or allocated, in the
performance of the Contract, less any applicable credits." Such costs may include severance payments to
employees.
This Bulletin explains which severance payments and the amount there of that may be an acceptable cost to the
contract.
DEFINITION
"Severance Pay" means a cash settlement or paid leave granted to employees upon termination of employment
for various reasons, or upon retirement. Remuneration for earned vacation credits or compensation for unused
sick leave credits is not considered as severance pay. Other payments excluded from severance pay are return of
contributions made to pension plans or retirement savings programs.
INTERPRETATION
1. Severance payments should be calculated using one of the following criteria in order to be considered as
an allowable cost:
a. in accordance with an employment contract, collective agreement or enacted legislation; or
b. according to an established company policy; or
c. based on the merits of a particular case.
2. In order for the allowable severance payment to be deemed reasonable any amount associated with the
following should not be included:
a. profit sharing;
b. commissions;
c. patent or other rights.
Annex 10.5.11: Cost Interpretation Bulletin - Number 11 Pension Plan Refunds

(2010-01-11)
On occasion, there exist credits due to refunds to contractors from companies handling their pension plans. This
situation could be as a result of large lay offs of employees, plan terminations and related interest on funds
invested.
The accounting issue that arises from these terminations is whether a gain should be recognized when these
assets revert back to the company.
DEFINITIONS
"Pension Plan Settlement"

occurs when an employer legally discharges the obligation for accrued pension benefits either by
transferring assets directly to plan participants in exchange for their rights to pension benefits or
by purchasing annuity contracts in which a third party unconditionally undertakes to pay all
accrued pension benefits.
"Pension Plan Curtailment"
occurs when the expected years of future service to be rendered by the existing employee group is
reduced significantly or when benefits will not be earned by employees for some or all future
periods.
INTERPRETATION
1. The pension refund amounts to be deducted from overhead expenditures used to determine costing rates
should be the contractor's share of the expected pension credits.
2. Upon a pension plan settlement or curtailment, the employer may have eliminated obligations with
respect to the plan, any gains or losses on the transaction, including any unauthorized amounts related to
previous plan amendments.
Changes in assumption and experience gains and losses, should be recognized immediately.
3. On the other hand, if an employer settles only a part of the accrued pension benefits, a portion of any
gains or losses including any unamortized amounts should be recognized immediately.
Annex 10.5.12: Cost Interpretation Bulletin - Number 12 Company Funded Costs

(2010-01-11)
Contract Cost Principles 1031-2 refer to "costs which are, or must be reasonably and properly incurred and/or
allocated, in the performance of the contract, less any applicable credits."
This bulletin explains the establishment of costs when government assistance has been provided related to costs
of fixed assets, research, and product development.
DEFINITIONS
"Company Funded Costs"

are expenditures made from funds over which the enterprise has spending power and which were
not provided to the company through the terms of a related agreement or understanding.
"Grant"
is an unconditional payment made to a recipient, usually for a specific purpose, for which the
donor will not receive any royalties, goods, or services.
"Contribution"
is a conditional transfer payment under an auditable agreement for which the donor will not
receive any royalties, goods, or services.
"Contribution Arrangement"
is an undertaking between a donor department or agency and a prospective recipient of a
contribution, describing the obligations of each, and the terms and conditions of payments and
which contain conditions for royalties from resulting sales. The arrangement may be as informal
as an exchange of letters.
INTERPRETATION
The Company Funded Costs that shall be considered applicable for contracts negotiated in accordance with
1031-2 are:
FIXED ASSETS
Government Assistance towards the acquisition of fixed assets shall be deducted from the fixed asset
acquisition cost and the relevant depreciation thereof calculated on the net asset amount. Depreciation on the net
amount may be included in the applicable overhead for cost recovery on contracts.
RESEARCH AND DEVELOPMENT

Government Assistance in the form of Investment Tax Credits shall not be deducted from the related research
and development expenditures when determining the applicable costs.
PRODUCT DEVELOPMENT
Government Assistance, as well as third party funded assistance, towards a specific product development shall
be netted against the relevant product development costs to arrive at the portion to be recovered over the sale of
that product or family of products.
Annex 10.5.13: Cost Interpretation Bulletin - Number 13 Executive Compensation

(2010-01-11)
Paragraph 04 (2) (f) of Contract Cost Principles 1031-2 states that indirect costs may include: "general and
administration expenses: including remuneration of executive and corporate officers…". However,
section 07 (1) identifies "unreasonable compensation for officers and employees" as a non-applicable cost.
There are many different considerations that may affect the amount a particular individual may be receiving.
This cost interpretation provides guidelines on the determination and allowability of executive compensation
expenses that are included in a contractor's overhead expenditures.
INTERPRETATION
1. Items included in a total compensation plan for any executive, not necessarily all allowable costs,
usually consist of four basis elements, these are:
a. Salary: reflects the extent of experience and sustained level of performance for a job, or position.
b. Benefits: deals with the provision of time off with pay, employee services, health care services,
allowable insurance protection and retirement incentives.
c. Performance Incentives: rewards the extent of accomplishment agreement targets.
d. Perquisites: benefits which are designed only to apply to executives, such as housing loans; these
are in addition to benefits offered to other employees.
2. Guidelines for considering what is reasonable executive compensation are:
a. compensation paid to executives in similar positions, compared to related executive pay scales
surveys;
b. the executive's previous experience, experience in other positions within the company and similar
appointments in other companies;
c. comparison of the compensation paid for the nature and scope of the work, or service, as defined
in the contract of service and/or the position description;
d. the size and complexity and the corporate management structure;
e. the company's general salary policy should be reviewed to ascertain the compensation is
uniformly paid, according to set criteria;
f. in the case of smaller contractors with a limited number of officers, the amount of compensation
paid to executives in the previous year should be reviewed, as a substantial increase over the prior
year tends to indicate compensation may be excessive, further investigation should be made to
determine whether the executives' salaries are for services rendered, rather than a re-distribution
of the business's profits;
g. compensation paid to executives through related party transactions.
Annex 10.5.14: Cost Interpretation Bulletin - Number 14 Mobile Repair Party

Requirements
(2010-01-11)
Section 5 of Contract Cost Principles 1031-2 recognizes that indirect costs should be accumulated and allocated
based on a principle of similarity of costs in the pool and a causal relationship to the contracts to which the costs
are allocated.
Repair work is normally carried out in a contractor's plant but, on occasion, it is necessary in meeting the
requirements of a customer department, to have repair work performed at other locations.
This cost interpretation provides guidelines on the determination of overhead expenses applicable to Mobile
Repair Party requirements.
DEFINITION
"Mobile Repair Party" is the individual, or group of individuals, performing work away from the contractor's
plant.
INTERPRETATION
The overhead rate on Mobile Repair Party work normally will be at the full plant rate, however, it should be
noted that under the three conditions below, the overhead rate could be different:
a. where the estimated hours to be expended for Mobile Repair Party work exceed 5% of the estimated
total direct labour hours for both commercial and defence repair and overhaul work during the contract
period; or
b. where the estimated hours to be expended for Mobile Repair Party work are less than 5%, but the
contracting officer considers that a significant number of direct labour employees are hired for Mobile
Repair Party work only; or
c. where the contractor maintains adequate cost records to permit the calculation and negotiation of a
separate Mobile Repair Party rate.
In the circumstances contemplated under alternatives a) and b) above, an overhead rate should be negotiated to
reflect the reduced costs applicable to Mobile Repair Party work.
Notwithstanding the Cost Interpretation on Travel Costs, all travel costs for direct personnel for Mobile Repair
Party requirements, should be charged to the contract directly and not included in any overhead pool.
Annex 10.5.15: Cost Interpretation Bulletin - Number 15 Environmental Costs

(2010-01-11)
According to Section 04 of Contract Cost Principles 1031-2 "Indirect Costs" are: "those costs which, though
necessarily having been incurred during the performance of the Contract for the conduct of the Contractor's
business in general, cannot be identified and measured as directly applicable to the performance of the
Contract."
An element that is becoming a more significant portion of indirect costs is environmental costs. This cost
interpretation provides guidelines on applicable environmental costs included in a Contractor's indirect costs.
DEFINITION
For the purposes of this Bulletin:
"Environmental costs" are the costs incurred by an entity to prevent, abate, or remediate damage to the
environment or to deal with the conservation of renewable and non-renewable resources.
INTERPRETATION
1. Any direct or indirect benefits, for example, tax credits, insurance benefits, or government assistance,
should be accounted for using the cost reduction approach. The amount of all such benefits received by
or credited to the contractor's account should be deducted from the related environmental cost and any
amortization of the cost should be calculated on the net amount.
2. Notwithstanding the other sections of this bulletin, no fines, or penalties, or any other non applicable
cost as determined under Section 07 of Contract Cost Principles 1031-2 are allowable.
3. Environmental costs can be grouped according to the periods when the cost is incurred and the periods
that the cost relates to.
a. Current period operations.

An example of this type of cost is the disposal of waste from current period operations.
These costs should be allowed and allocated on the appropriate base in the current period.
b. Current period past operations.

An example is clean up costs for activities that occurred previously.
Any current period cost that is a material amount should be deferred and amortized over a
reasonable number of future periods.
c. Current period future operations.
An example is depreciable equipment purchased to control hazardous emissions.
These costs should be amortized over the periods for which benefits are expected from the costs
incurred.
Annex 10.5.16: Cost Interpretation Bulletin - Number 16 Take-out Rates

(2010-01-11)
Section 05 of Contract Cost Principles 1031-2 states:
"Indirect costs must be accumulated in appropriate indirect cost pools, reflecting a contractor's organizational or
operational lines and these pools subsequently allocated to contracts in accordance with the following
two principles:
a. the costs included in a particular indirect cost pool should have a similarity of relationship with each
contract to which that indirect cost pool is subsequently distributed; further, the costs included in an
indirect cost pool should be similar enough in their relationship to each other that the allocation of the
total costs in the pool provides a result which would be similar to that achieved if each cost within that
pool were separately distributed;
b. the allocation basis for each indirect cost pool should reflect, as far as possible, the causal relationship
of the pooled costs to the contracts to which these costs are distributed".
This bulletin provides interpretation on how take out rates reflect the allocation of specific cost from indirect
cost pools to suit the related costs and circumstances of the contracts. However, a fair level of overhead, or
G & A costs must be charged to the particular products or services in question."
DEFINITION
"Take-Out Rate" is the negotiated rate applied for the recovery of overhead costs on goods and services which
do not form the major portion of the company's business but are in themselves significant relative to a
government contract. The resulting rate, in most cases, should be somewhat less than that which applies to other
work processed through the company's facilities.
INTERPRETATION
1. Take-out rates may be established to apportion overhead expenses on a reasonable and justifiable basis
on goods and services which requires less overhead effort than the company's regular activity.
2. The task of identifying where and when a take-out rate is applicable is left to the discretion of the
negotiators, who are in the best position to establish the need, based on the information available at the
time.
3. Some of the areas for applications of take-out rates are:
a. Subcontracts;
b. Drop shipments, other resale and high value purchases;
c. Mobile repair party and field services;
d. Other specialized applications such as for travel and living that are charged directly to a contract.
4. The purpose of a take out rate is to allocate costs to a contract. Other overhead recovery rates must not
include any of the costs of any contracts that are subject to take out rates. This means that take out rates
that are established without taking into account the full costs of specific situations may result in
unrecovered overhead as this overhead cannot be recovered on other contracts. As an example; this
situation can arise if a contract is established using a take out rate that is set to limit the total price of the
contract and the rate is not sufficient to allow full cost recovery.
Annex 10.5.17: Cost Interpretation Bulletin - Number 17 Government Supplied Materiel

(2010-01-11)
Paragraph 05 (a) of Contract Cost Principles 1031-2 deals with the allocation of indirect costs according to the
principles of "similarity of relationship" and the "causal relationship of pooled costs". Applying these principles
requires consideration of both the nature of activities giving rise to the costs and when different activities occur.
The purpose of this cost interpretation is to provide guidance in determining when material handling and
general and administrative costs relating to government supplied material are allowable items for cost
reimbursement.
DEFINITIONS
"Accountable Advance Spares" are non-catalogued materiel owned by the government and manufactured or
purchased by contractors in accordance with agreements between contractors and the government. Accountable
Advance Spares are used in the repair and overhaul of government equipment.
"Laid-Down Cost" is the cost incurred by a contractor to acquire a specific product. This includes the invoice
price (less trade discounts) charged to the contractor plus any applicable charges for transportation, exchange,
custom duties, and brokerage charges.
"Government-Supplied Materiel" (GSM): Material supplied to a contractor by a government department or

agency for incorporation into the end product.
INTERPRETATION
a. Material handling costs related to the storing and transferring out of storage are allocated to the GSM
when they are embodied.
b. General and Administrative (G & A) overhead expenses and material handling costs that are applicable
should be allocated as a cost associated with the embodiment of government supplied material in the
year when the materials are embodied. When transfers of GSM, for example from accountable advance
spares inventory, are made to Canada for asset disposal, the general and administrative overhead
expenses and material handling costs that are applicable are allocated at the time of transfer.
c. When the contractor stores GSM for Canada, the cost of the items being stored would normally include
the laid-down cost of the purchased GSM; or the applicable direct material, direct labour, factory
overhead and G & A applicable to the manufacturing operation of the manufactured GSM.
Annex 10.5.18: Cost Interpretation Bulletin - Number 18 Incentive Remuneration Profit

Sharing Plans
(2010-01-11)
Section 04 of Contract Cost Principles 1031-2 explains indirect costs. This section's paragraph 2. (c) indicates
that fringe benefits (the contractor's contribution only) are to be included as indirect costs (overhead). A fringe
benefit type that may not be an overhead cost for 1031-2 purposes is amounts paid under Incentive
Remuneration Profit Sharing Plans. The reason these amounts are not considered costs is that normally these
plans are considered as a distribution of a portion of earnings to employees. Earnings that are profits or a
distribution of retained earnings are not costs. However, since the purpose of these plans is to remunerate
employees, it is often argued that payments under these plans should be considered costs.
This cost interpretation is to determine the features of Incentive Remuneration-Profit Sharing Plans that may be
considered as allowable cost items in accordance with 1031-2.
DEFINITION
Incentive Remuneration Profit Sharing are plans designed to link the performance of employees to the
achievement or organizational objectives, through the provision of additional compensation from the
distribution of a defined share of the organization's net profit.
INTERPRETATION
Incentive Remuneration Profit Sharing Plans may be considered as an allowable cost element providing:
a. The plan includes a documented sharing arrangement, with all employees, and the incentive amounts
payable by the employer must be computed with reference to earned profits.
b. The company pays employees directly or provides the funds for the employee profit sharing plan to a
trustee in trust for the benefit of the employees who are members of the plan.
c. The amount of cost will not exceed the amount of payment made to the employees or the plan trustee.
d. The cost is recognized only in the year the employee provides services to earn benefits under the plan.
e. The entire amount recognized as cost must be disbursed to employees (or paid to the trustee) in the
fiscal year when the benefits were earned or shortly after the end of the fiscal year (within a few months,
but well before the end of the fiscal year following the one for which plan benefits were based).
f. Any funds payable by the trustee to the employer for over contributions or funds that the plan may earn;
shall be used to reduce the current year cost unless these earned funds or over contributions are paid
directly by the employer to the employees within that current fiscal year. (see Annex 10.5.11: Cost
Interpretation Bulletin - Number 11 Pension Plan Refunds).
g. Compensation to owners of closely held corporations, partners, sole proprietors, or members of their
immediate families should be in accordance with the personal service rendered rather than a distribution
of profits. (see Annex 10.5.13: Cost Interpretation Bulletin - Number 13 Executive Compensation).
Annex 10.5.19: Cost Interpretation Bulletin - Number 19 Purchased Labour -- Personnel

Procured From Outside Sources
(2010-01-11)
In accordance with sections 03, 04 and 05 of Contract Cost Principles 1031-2, Purchased Labour Costs are
considered either as Direct Costs or may be viewed as Direct Labour Costs.
DEFINITIONS
"Purchased Labour Costs" are the costs incurred by a contractor/entity for temporary personnel procured from
the outside for skills such as engineers, technical writers, technicians, craftsmen. Purchased Labour normally
attract different indirect costs. Care must be taken to ensure that they are not accounted for as the contractor's
employees.
INTERPRETATION
1. Contractors' cost accounting method for purchased labour and overhead allocation thereon varies
depending on the circumstances under which purchased labour costs are incurred.
For example,
a. some contractors classify purchased labour as direct labour costs when the work is performed in
the contractor's facilities under their supervision and otherwise meets section 03(b) of 1031-2
definition of direct labour costs. These contractors cost direct labour using either the purchased
labour rate or average labour rate incurred by their own employees for comparable work.
However differences between the average labour rate incurred by the contractor's own employees
and purchased labour prices are treated as overhead costs and are allocated accordingly.
b. other contractors classify purchased labour as subcontract costs.
2. Purchased labour must share in an allocation of certain indirect expenses where there is a causal or
beneficial relationship, and the allocation method must be consistent with the contractor's disclosed cost
accounting practices.
3. The accounting treatment for purchased labour must be evaluated on a case-by-case basis with
consideration given to the materiality of costs involved and the overall effect of the accounting
treatment on final cost objectives. Acceptance or rejection of the contractor's treatment of purchased
labour must be based upon
a. the causal and beneficial relationship of indirect expenses and purchased labour, and
b. the nature of the employer/consultant relationship.
4. The preferred cost accounting method for purchased labour is to have a separate direct cost for this
activity with an appropriate allocation of applicable overhead. Other methods devised are acceptable
providing the accounting method is considered reasonable and justifiable and meets the relevant
Contract Cost Principles 1031-2.
Annex 10.6: Cost Notifications 01 to 02

(2010-01-11)
Annex 10.6.1: Cost Notification 01 - Technology Partnership Canada Royalty Amount for
Cost Rate Negotiations
(2010-01-11)
BACKGROUND
Technology Partnership Canada (TPC) has contributed sums per TPC Project Agreements which carry
provisions for the possible repayment of these contributions per Royalty repayment terms in these accords.
In most cases, these royalty repayment terms are tied to the sale of the potential product/project that TPC
contributed the funds for. The term and repayment percentage varies per the understanding.
ISSUE
In the agreements that were reviewed, the royalty payments to TPC to be made by the firm, in most instances,
exceed the original contribution amount providing that the project has viable sales of the development project.
The annual rate negotiation with a firm will be faced with a potential royalty repayment cost in the overhead
rate calculation in the year that the repayment is required and made to TPC.
COST RECOVERY POSITION FOR ANNUAL RATE NEGOTIATION

NEGOTIATIONS
For annual rate negotiation purposes, the recovery amount allowed on contracts shall be limited to the original
TPC contribution per the agreement. The amount in excess of the original contribution shall be considered a
separate element outside the rate negotiations and will not be an allowable contract cost.
The amount of the recovery shall be determined by the original TPC agreement. For contributions that are
product specific, a product development recovery rate will be established. For non-product specific agreements,
the recovery will be made through a General and Administrative Overhead and shall be recovered over a
reasonable amount of time.
REFERENCES
Treasury Board Accounting Standard 3.2 (http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/accstd/tbastp_e.asp) - Transfer
Payments (Grants and Contributions)
1031-2, Contract Cost Principles, of the Standard Acquisition Clauses and Conditions Manual
Annex 10.4: Reasons for the non-applicability of certain costs when utilizing Contract Cost Principles
1031-2: Reasons for the Non-applicability of Certain Cost when Utilizing Contract Cost Principles
1031-2.
Annex 10.5.7: Cost Interpretation Bulletin - Number 07 Research and Development Expenses.
Annex 10.5.12: Cost Interpretation Bulletin - Number 12 Company Funded Costs.
CICA 3290 Contingencies
Annex 10.6.2: Cost Notification 02 - Goodwill

(2010-01-11)
DEFINITIONS
For the purpose of this Notification:
Goodwill is the excess of the cost of an acquired enterprise over the net of the amounts assigned to assets
acquired and liabilities assumed. This is an unidentifiable intangible asset, which originates under the purchase
method of accounting for a business combination when the price paid by the acquiring company exceeds the
sum of the identifiable individual assets acquired less liabilities assumed, based upon their fair values.
NOTIFICATION:
Goodwill represents the value paid by a contractor on a business enterprise purchase in excess of the fair value
of the acquired firm's assets less the assumed liabilities. This amount is based on the anticipated growth and
earnings of the newly acquired company and thus is an intangible asset.
Any cost for amortization, expensing, write-off, or write-down of this intangible asset called goodwill (however
represented) is unallowable.
REFERENCES
1031-2, Contract Cost Principles, of the Standard Acquisition Clauses and Conditions Manual
Annex 10.2: Examples to Determine the Working Capital Employed: Reasons for the non-applicability
of certain cost when utilizing Contract Cost Principles 1031-2
CICA 3062 Goodwill
FAR 31.205-49 Goodwill
1 Supply Manual Glossary

(2017-11-28)
ABCDEFGHIJLMNOPQRSTUVW
ACCEPTANCE
1. A deliberate and intentional agreement or consent to accept goods and services rated as acceptable.
2. Receipt by the consignee for a shipment, thus terminating the common carrier liability subject to claim
for shortages or damages if such exist. (2010-01-11) (acceptation)
ACCOUNT
1. A formal record of a particular type of transaction such as an asset, liability, proprietorship, revenue or
expense, expressed in money or other unit of measurement and kept in a ledger.
2. The bookkeeping records of any organization, including journals, ledgers, vouchers and other
supporting papers.
3. Defence Production Act. Means the Defence Production Loan Account. (See 9.25.1)
4. Canadian Institute of Chartered Accountants (CICA). Collective term for the whole set of financial
statements of an organization.
5. Records of the cost to the contractor of the work performed under a Public Works and Government
Services Canada contract and of all expenditures and commitments made by the contractor in
connection with the contract and invoices, receipts and vouchers relating to it. (2010-01-11) (compte)
ACCOUNTABLE ADVANCE
1. Funds provided to a contractor to purchase spare parts, which are not an item of supply in the supply
system, and that will be used in the repair and overhaul of government equipment.
2. Advance funds provided for a specific purpose, and chargeable to the appropriation for the service in
respect of why the advance was made.
3. Accountable Advance Regulations. A sum of money advanced from and temporarily charged to an
appropriation; for example, a revolving fund, working capital advance, special account. (2010-01-11)
(avance à justifier)
ACQUISITION CARD
A charge card issued under a contract between a card issuer and Canada for the procurement and payment of
goods and services for authorized official government business. (2016-04-04) (carte d'achat)
ADJUSTMENT
1. The amount of variation permitted by an adjustment clause in the contract, which generally permits a
change upward or downward in the price or obligations, in case certain events transpire.
2. Refer to economic price adjustment. (2010-01-11) (rajustement)
ADMINISTRATIVE AGREEMENT
A negotiated agreement between a supplier and PWGSC pursuant to the Ineligibility and Suspension Policy
(http://www.tpsgc-pwgsc.gc.ca/ci-if/politique-policy-eng.html) . (2016-04-04) (entente administrative)
AFFILIATE
(For purposes of the Integrity Regime.)
a. A person, including, but not limited to, parent companies, subsidiaries, whether or not wholly or
partially owned, as well as a senior officer;
b. one person is an affiliate of another person if,
i. one person is controlled by the other person;
ii. both persons are controlled by a third person;
iii. both persons are under common control; or
iv. each person is controlled by a third person and the third person by whom one person is controlled
is affiliated with the third person by whom the other person is controlled;
c. indicia of control, whether direct or indirect, exercised or not, include, but are not limited to, common
ownership, common management, identity of interests (often found in members of the same family),
shared facilities and equipment or common use of employees;
d. an affiliate may also exist in instances of an amalgamation or merger. Where at any time two or more
corporations (in this provision referred to as the “predecessors”) amalgamate or merge to form a new
corporation, the new corporation and any predecessor are deemed to have been affiliated with each other
where they would have been affiliated with each other immediately before that time if,
i. the new corporation had existed immediately before that time; and
ii. the persons who were the shareholders of the new corporation immediately after that time had
been the shareholders of the new corporation immediately before that time. (2016-04-04) (affilié)
ADVANCE CONTRACT AWARD NOTICE (ACAN)

A notice posted on the Government Electronic Tendering Service (GETS) advising suppliers in advance that a
contract will be awarded to a particular supplier and to invite them to submit a statement of capabilities if they
think that they meet the requirements set out in the ACAN. (2013-06-01) (Préavis d'adjudication de contrat
[PAC])
ADVANCE PAYMENT
A payment made in advance, by or on behalf of Canada, under the contract, and before the good is delivered or
the service rendered. (2010-01-11) (paiement anticipé)
AFTER-IMPOSED DUTIES
All duties that the contractor has to pay that were not applicable on the contract date. (2010-01-11) (droits
imposés ultérieurement)
AFTER-IMPOSED TAXES
All applicable Goods and Services Tax/Harmonized Sales Tax exempted or excluded on the reference date but
for which exemption was later removed or reduced such that the contractor is required to pay or bear additional
taxes as a result of legislative, judicial or administrative action, taking effect after the reference date. This also
includes increases announced after the reference date affecting the rate of tax, whether specific or percentage.
(2010-01-11) (taxes imposées ultérieurement)
AFTER-RELIEVED DUTIES
All duties that were applicable on the contract date but were no longer applicable at the time of delivery. (2010-
01-11) (droits dégrevés ultérieurement)
AFTER-RELIEVED TAXES
All applicable Goods and Services Tax/Harmonized Sales Tax that would have been payable on the transaction
or property covered by contract, but which the contractor is not required to pay or bear, or for which the
contractor obtains a refund or drawback, as a result of legislative, judicial or administrative action taking effect
after the reference date. (2010-01-11) (taxes dégrevées ultérieurement)
AGENCY
A relationship between two persons, by agreement or otherwise, where one (the agent) may act on behalf of the
other (the principal) and bind the principal by words and actions. (2010-01-11) (agence)
AGENT
Person who acts on behalf of another person (the principal) in dealings with third parties. (2010-01-11) (agent)
AGREEMENT
A consensus of two or more persons in respect of anything done or to be done. Although used as synonymous
with “contract”, agreement may have a broader meaning. (2010-01-11) (accord)
AGREEMENT ON INTERNAL TRADE (AIT)

An intergovernmental trade agreement signed by Canadian First Ministers that came into force in 1995. The
AIT is being replaced by the CFTA on July 1, 2017. The AIT will continue to apply after July 1, 2017 to any
procurement commenced before that date. The procurement process commences after an entity has decided on
its requirement. (2017-07-01) (Accord sur le commerce intérieur [ACI])
AGREEMENT TO IMPLEMENT EMPLOYMENT EQUITY

Contractors who bid on an initial goods and services contract, a standing offer, or a supply arrangement
estimated at $1 million or more (including applicable taxes) with the Government of Canada must first certify
their commitment to implement employment equity by signing the Agreement to Implement Employment
Equity prior to contract award. The Agreement to Implement Employment Equity is administered by
Employment and Social Development Canada – Labour Program. (2014-06-26) (Accord pour la mise en
oeuvre de l'équité en matière d'emploi)
AMENDMENT
An agreed addition to, deletion from, correction or modification of a contract. (2010-01-11) (modification)
APPROPRIATE MINISTER
1. With respect to a department named in Schedule I of the Financial Administration Act(FAA) the
minister presiding over the department.
2. With respect to a division or branch of the public service of Canada set out in column I of Schedule I.1
of the FAA, the minister set out in column II of that Schedule.
3. With respect to a commission under the Inquiries Act, the minister designated by order of the Governor
in Council.
4. With respect to the Senate, the Speaker; with respect to the House of Commons, the Board of Internal
Economy, and with respect to the Library of Parliament, the Speakers of the Senate and the House of
Commons.
5. With respect to a departmental corporation, the minister designated by order of the Governor in Council.
6. With respect to a Crown corporation, the appropriate minister as defined in subsection 83(1) of the FAA.
(2010-01-11) (ministre compétent)
ARCHITECTURAL AND ENGINEERING SERVICE CONTRACT

A contract for the provision of services to provide a range of investigation and recommendation reports,
planning, design, preparation, or supervision of the construction, repair, renovation or restoration of a work and
includes contract administration services, for real property projects. (2017-05-12) (marché de services
d'architecture et de génie)
ASSETS
Any owned physical object (tangible) or right (intangible) having economic value to its owner. See production
assets. (2010-01-11) (actif)
ASSIGNMENT
1. A transfer of a right from either party to the other, as mutually agreed upon.
2. Lease. In this context, the entire unexpired residue of the lease is transferred.
3. For the benefit of creditors. Regulated by the Bankruptcy and Insolvency Act, it is an assignment made
in favor of the trustee in bankruptcy who takes it in trust for the general body of creditors of the
insolvent assignor for realization and distribution in accordance with the statute.
4. Book debts. Right to collect and receive all accounts receivable, present and future, of the borrower.
This right is exercised by the lender, which signifies to the debtors of the borrower that the lender
requires them to pay the outstanding balance on their account. (2010-01-11) (cession)
ASSIGNMENT OF CONTRACT
The transfer by the contractor of responsibility for performance of all or part of the contract to a third party.
(2010-01-11) (cession d'un contrat)
ASSOCIATED GOVERNMENT
Government of United Kingdom, any other government of the Commonwealth of Nations, the government of a
country that is a member of the North Atlantic Treaty Organization (NATO) or the government of any other
country designated by the Governor in Council, as being a country in defence of Canada. (2010-01-11)
(gouvernement associé)
AUDIT
1. General. An examination, full scrutiny and verification of accounting records, usually by a third person.
2. An examination of all elements of actual costs incurred by the contractor and the determination of actual
profit realized. See discretionary audit. (2010-01-11) (vérification)
AUTHORITY
1. The right to perform certain acts, or prescribe rules governing the conduct of others.
2. Generally, under balanced schemes of management, administrative authority represents the activation of
corporate policy and is coupled with responsibility and accountability.
3. A person commonly regarded as possessing an extensive knowledge in any given field. (2010-01-11)
(pouvoir)
AUTOMATED VENDOR ROTATION SYSTEM (AVRS)

A system that maintains a record of bid opportunities for the suppliers from each source list. AVRS records are
only maintained on regional type satellites. (2010-01-11) (Système automatisé de rotation des fournisseurs
[SARF])
AWARD
The notification to a bidder or tenderer of acceptance of a bid or tender, which brings a contract into existence.
(2010-01-11) (attribution)
BANKRUPTCY
1. A condition where an insolvent company or person either voluntarily institutes bankruptcy proceedings
by applying to have a licensed trustee in bankruptcy appointed or where the company's or person's
creditors are successful in petitioning the court to issue a receiving order, the effect of which is to
authorize transfer of all assets of the bankrupt debtor to a licensed trustee in bankruptcy for realization
or distribution to the creditors.
2. The state or condition of one who is bankrupt, whereby the property of a person or company, being
legally declared unable to meet debts, is vested in an official trustee for distribution among creditors.
(2010-01-11) (faillite)
BASIC PROCUREMENT
A basic procurement has the characteristics of clarity and completeness. The requirement is known and
identifiable, and evaluation methods are simple. The methods for soliciting bids and contracting are pre-
determined and set out. There is little need for analysis or speculation. There is an absence of change with the
procurement process and control is within the department's domain of authority. There may be tools and
instruments available that support the character of Basic. There is usually a low level of risk. (2011-10-04)
(approvisionnement de base)
BEST VALUE
The combination of price, technical merit, and quality, as determined by the contracting authority before the
solicitation and set out in the evaluation criteria, and which forms the basis of evaluation and negotiation
between buyers and sellers to arrive at an acceptable basis for a purchase and sale. (2010-01-11) (meilleur
rapport qualité-prix)
BID
An offer to provide services or supply goods as a result of a solicitation. (2010-01-11) (soumission)
BID BOND
1. A bond given to guarantee entry into a contract. This bond is given to indemnify Canada against
increased costs if the bidder does not carry out the specified undertaking to enter into a contract. A bond
given by a person to guarantee entry into a contract if the contract is awarded to that person.
2. See security deposit, government guaranteed bond and surety bond. (2010-01-11) (cautionnement de
soumission)
BID SECURITY
A bid bond or a security deposit given by a person to Canada to guarantee entry into a contract if the contract is
awarded to that person. (2010-01-11) (garantie de soumission)
BID SOLICITATION
An invitation, verbal or written, to suppliers to submit a bid, quotation or offer. (2010-01-11) (demande de
soumissions)
BIDDER
Person or entity (or, in the case of a joint venture, the persons or entities) submitting a bid to perform a contract
for goods, services or both. It does not include the parent, subsidiaries or other affiliates of the bidder, or its
subcontractors. (2009-12-15 ) (soumissionnaire)
BIDDERS' CONFERENCE
A meeting chaired by Public Works and Government Services Canada to discuss with potential bidders,
technical, operational and performance specifications, and/or the full extent of financial, security and other
contractual obligations related to a solicitation. (2010-01-11) (conférence des soumissionnaires)
BILL OF EXCHANGE
This includes certified cheques, bank drafts and money orders, and are defined in the Bills of Exchange Act as
"an unconditional order in writing, addressed by one person to another, signed by the person presenting it,
requiring the person to whom it is addressed to pay, on demand or at a fixed or determinable future time, a sum
of money to or to the order of a specified person or to the bearer”. (2010-01-11) (lettre de change)
BILL OF SALE
An instrument in writing under which the title to personal chattel is transferred. A mere receipt for payment is
not a bill of sale. The instrument must actually signify a transfer of title of the goods to the buyer. (2010-01-11)
(contrat de vente)
BLANKET ORDER CASE

Supply arrangement that is negotiated with the United States Government under the auspices of Foreign
Military Sales (FMS). It allows clients to submit detailed requirements directly to the identified U.S. military
organization. This arrangement, which is similar in nature to the standing offer method of procurement, is
normally utilized when there is no definite listing of items or of quantities required. This category of FMS cases
(contracts) does not necessitate the purchase of equity. See 9.20. (2010-01-11) (dossier de commandes -
cadres)
CALL-UP AGAINST A STANDING OFFER

An order issued under the authority of a duly authorized user against a particular standing offer. Communication
of a call-up against a standing offer to the offeror constitutes acceptance of the standing offer to the extent of the
goods, services, or both, being ordered and causes a contract to come into effect. The parties to the contract that
comes into effect when a call-up against a standing offer is made are Canada, as represented by the Minister of
Public Works and Government Services and the offeror. (2010-01-11) (commande subséquente à une offre à
commandes)
CANADIAN GENERAL STANDARDS BOARD (CGSB)

A part of Public Works and Government Services Canada accredited by the Standards Council of Canada as a
standard development organization and an ISO 9000 registrar. CGSB is mandated to provide a range of
standardization and conformity assessment services in support of government procurement and other
government requirements, such as:
1. development of standards, specifications, manuals and guides;
2. listings of prequalified products and services; and
3. Quality Systems Division. (2010-01-11) (Office des normes générales du Canada [ONGC])
CANADIAN GOODS
1. For the purposes of the Canadian Content Policy. Generally, with the exception of goods covered by the
International Trade Agreements, Canadian goods are those wholly manufactured or that originate in
Canada or they are products containing imported components that have undergone sufficient change in
Canada to be considered Canadian.
2. For the purposes of Taxes and Duties. goods that are the growth, produce or manufacture of Canada or
that are of foreign origin but are duty and tax paid and have thus been entered for consumption into
Canada.
3. Addition to Canadian Goods Abroad. Goods that are exported from Canada for the purpose of being
incorporated with foreign articles abroad.
4. Processing of Canadian Goods Abroad. This refers to goods that are exported for a phase of production,
which cannot be completed in Canada. (2010-01-11) (marchandises canadiennes)
CANADIAN INDUSTRY
All commercial enterprises resident and operating in Canada and incorporated, registered, or recognized as
such, under federal or provincial legislation and that carry on activities in Canada. This includes industrial
research institutes jointly operated by groups of such commercial enterprises. (2010-01-11) (industrie
canadienne)
CANADIAN INTERNATIONAL TRADE TRIBUNAL (CITT)

An administrative tribunal operating within Canada's trade remedies system. It is an independent quasi-judicial
body that carries out its statutory responsibilities in an autonomous and impartial manner and reports to
Parliament through the Minister of Finance. (2010-01-11) (Tribunal canadien du commerce extérieur)
CANADIAN SERVICES
Services provided by Canadian-based personnel. (2010-01-11) (services canadiens)
CAPITAL COST ALLOWANCE

Depreciation of fixed assets over a number of accounting periods. (2010-01-11) (déduction pour
amortissement)
CAPITAL LEASE
A lease that, from the point of view of the lessee, transfers substantially all the benefit and risk incidents to
ownership of the property to the lessee. (2010-01-11) (bail de location-acquisition)
CARRIER
Any person who, in a contract of carriage, undertakes to perform or to procure the performance of transport by
rail, road, air, sea, inland waterway or by a combination of such modes. (2010-01-11) (transporteur)
CASH FLOW
A tracing, in successive steps, of individual items or aggregates of income or expenditure from their first
recognition in the accounts to their final disposition or loss of identity. (2010-01-11) (mouvement de
trésorerie)
CEILING PRICE
The maximum amount of money to be paid to the contractor for the prescribed work as established in the
contract. When a ceiling price is used in a contract, the contractor is not entitled to additional compensation. A
ceiling price is used when the level of effort or quantity can be realistically estimated, and there is full
agreement between the parties as to what constitutes the prescribed work. (2017-08-17) (prix plafond)
CERTIFIED PRODUCTS LIST (CPL)

The CPL is identical to the Qualified Products List (QPL) except that there are more frequent audits and tests.
This higher level of product assurance permits the qualifying authority, as a certification agency, to enter into a
licensing agreement with supplier(s), allowing them to use a registered certification mark on their products and
promotional literature. (2010-01-11) (liste des produits certifiés [LPC])
CLASSIFIED INFORMATION
Information related to the national interest that may qualify for an exemption or exclusion under the Access to
Information Actor Privacy Actand the compromise of which would reasonably be expected to cause injury to
the national interest. (2010-01-11) (information classifiée)
CLIENT
A department, agency, branch, division, Crown corporation or other entity for whom PWGSC procures goods
and services. (2010-01-11) (client)
COLLUSION
A secret understanding between two or more persons to take advantage of another with the object of depriving
him or her of a right or property. It implies the existence of fraud of some kind, the employment of fraudulent
means, or of lawful means for the accomplishment of an unlawful purpose. (2010-01-11) (collusion)
CO-OPERATIVE LOGISTICS (COLOG)

A supply arrangement, which is negotiated with the United States Government under the auspices of Foreign
Military Sales (FMS). It enables the Canadian Department of National Defence to obtain directly from the
supply systems operated by the United States Department of Defence, spare parts and accessories needed for
Crown-owned military equipment of U.S. origin. This category of FMS cases (contracts) necessitates the
purchase of equity in the supply system of the appropriate military organization. See 9.15(FMS) and
9.20(COLOG). (2010-01-11) (COLOG)
COMMERCIAL PRACTICE
Custom or usage of the particular trade in which usage or custom is ordinary and reasonable. Evidence of a
trade usage may be given in aid of interpreting a contract. (2010-01-11) (pratique commerciale)
COMMERCIAL PRODUCTS
Products of a class or kind that are used regularly for other than government purposes and are sold by the
contractor in the course of carrying out normal business operations, which are regularly sold by the contractor to
clients other than the government in sufficient quantities to constitute a real commercial market, and for which
there is sufficient number of buyers, other than the government, of establishing a going-price for the products.
(2010-01-11) (produits commerciaux)
COMMERCIAL SERVICES
Services of a class or kind that are used regularly for other than government purposes and are sold by the
contractor in the course of carrying out normal business operations, which are customarily provided by the
contractor with personnel regularly employed and equipment, if necessary, and regularly maintained for the
purpose of supplying such services, and for which there is a sufficient number of buyers, other than the
government, to establish a going-price for the services. (2010-01-11) (services commerciaux)
COMMODITY
Raw material, perishable goods, fabricated article or item of production or supply utilized in everyday
endeavors and which is identified by contents, physical nature or characteristics. (2010-01-11) (produit)
COMMON CARRIER
Any person who undertakes and is authorized to transport persons or goods as a regular business. (2010-01-11)
(transporteur public)
COMMON OWNERSHIP CONTROL

The assets of an enterprise or other organization are held indivisibly rather than in the names of the individual
members. Consequently, rather than being “owners” of the enterprise, its members are held to be trustees of it
and its assets for future generations. Common ownership is a way of “neutralizing” capital, and vesting control
of an enterprise by virtue of participation in it, rather than by the injection of capital. (2010-01-11) (contrôle
collectif)
COMMON SERVICE AGENCY

1. An agency whose activities are directed mainly toward serving other departments and agencies.
2. Public Works and Government Services Canada is a common service agency. (2010-01-11) (organisme
de services communs)
COMPANY
See corporation. (2010-01-11) (compagnie)
COMPETITIVE BID SOLICITATION

Solicitation of bids from two or more sources. (2010-01-11) (demande de soumissions concurrentielle)
COMPETITIVE BIDDING
A process that requires that all bidders be placed on an equal footing, and that they bid under the same terms
and conditions. (2010-01-11) (soumission concurrentielle)
COMPETITIVE CONTRACT
A contract where the process used for the solicitation of bids enhances access, competition and fairness and
assures that a reasonable and representative number of suppliers are given an opportunity to bid. (2010-01-11)
(contrat concurrentiel)
COMPLEX PROCUREMENT
A complex procurement has the characteristic of dealing with the unknown. It requires creativity and ongoing
development. It is based on achieving a goal/target and driven by managing change/phases. Pre-established
methods of supply may have to be modified and procurement strategies and evaluation methodologies may have
to be researched or developed. The procurement may involve partnerships with clients, multiple stakeholders,
and control may be shared. Contract administration is detailed and extensive and may be unpredictable. There
may be a high level of risk (public sensitivity, product, impacts). (2011-10-04) (approvisionnement complexe)
COMPLIANCE REVIEW
This refers to a compliance review of a representative selection of contractors that will be conducted
periodically by Human Resources and Skills Development Canada to assess compliance with the employment
equity program criteria and the results obtained. (2010-01-11) (vérification de conformité)
COMPREHENSIVE LAND CLAIMS AGREEMENTS

1. Comprehensive Land Claims Agreements (CLCAs) are negotiated in areas of Canada where Aboriginal
rights and title have not been addressed by treaty or through other legal means. These agreements are
modern-day treaties between Aboriginal claimant groups, Canada and the relevant province or territory.
While each one is unique, these agreements usually include such things as land ownership, money,
wildlife harvesting rights, participation in land, resource, water, wildlife and environmental management
as well as measures to promote economic development and protect Aboriginal culture. Many
agreements also include provisions relating to Aboriginal self-government.
2. CLCAs are law. The CLCA obligations are legally binding because they are contained in agreements
signed by Canada and backed by legislation. (2013-11-06) (ententes sur les revendications
territoriales globales)
COMSEC
Cryptographic, transmission and emission security measures applied to information stored, processed or
transmitted electronically; a subset of information technology security. (2010-01-11) (COMSEC)
CONDITION
1. Contract law.
a. A term or an obligation in the contract that goes directly to the substance of the contract or is
essential to its very nature that its non-performance may be fairly considered by the other party as
a substantial failure to perform the contract at all.
b. A provision making an obligation subordinate or contingent upon a future and uncertain event.
2. Implied condition. One created by law without any words used by the parties, whether the parties had it
in their minds at the time or not. (2010-08-16) (condition)
CONFIDENTIAL
Level of classification that applies to information and assets whose compromise could reasonably be expected
to cause injury to the national interest. (2010-01-11) (confidentiel)
CONSIGNEE
The person to whom goods are shipped. (2010-01-11) (destinataire)
CONSIGNMENT
Goods shipped for future sale or other purposes. The ownership of the goods (title) remains with the shipper
(consignor). The receiver (consignee) is accountable for the goods after accepting them. Consigned goods are a
part of the consignor's inventory until sold. The consignee may be the eventual purchaser, may act as the agent
through whom the sale is effected, or may otherwise dispose of the goods in accordance with its agreement with
the consignor. (2010-01-11) (expédition)
CONSTRUCTION CONTRACT
1. Includes an agreement for the supply and erection of a prefabricated structure. The mere purchase of a
prefabricated structure would be a "goods contract." However, a subsequent erection contract would be
a "construction contract”.
2. A contract entered into for the construction, repair, renovation or restoration of any work except a vessel
and includes: a contract for the supply and erection of a prefabricated structure; a contract for dredging;
a contract for demolition; or a contract for the hire of equipment to be used in or incidentally to the
execution of any contract referred to in this definition. (2010-01-11) (contrat de construction)
CONSULTANT
An individual or entity that provides advice or other professional services to Canada. A consultant serves in an
outside independent advisory capacity to an officer or department, as distinguished from one who serves as an
employee in performance of a department's duties and responsibilities. A consultant expresses views or gives
opinions on problems or questions as requested, but does not perform, supervise, nor take responsibility for the
performance of operating functions. Ordinarily, consultants are experts in a particular field in which advice is
given. A consultant need not be a specialist; the expertise may consist of broad administrative, professional or
technical experience, indicating ability and knowledge, which will make the advice a distinctive value to the
client. The work performed under the contract is the provision of advice. (2010-01-11) (expert-conseil)
CONTINGENT LIABILITY
A legal or financial obligation that may arise as a result of a future and uncertain event. A liability which is not
now fixed and absolute, but which will become so in case of the occurrence of some future and uncertain event.
A potential liability, e.g. pending lawsuit, disputed claim. (2010-01-11) (dette éventuelle)
CONTRACT
1. An agreement between two or more persons, which creates an obligation to do or not to do a particular
thing. Its essentials are competent parties, subject matter, a legal consideration, mutuality of agreement
and mutuality of obligation.
2. Under the Government Contracts Regulations,a contract means a construction contract, a goods
contractor and a service contract entered into on behalf of Canada by a contracting authority. (2010-08-
16) (contrat)
CONTRACT APPROVAL AUTHORITY

The authority delegated by the Minister of PWGSC to the person designated to occupy a position, that is, the
incumbent of a position, to approve on his/her behalf submissions to enter into contracts, to amend contracts or
to issue standing offers up to specified dollar limits. See contract signing authority. (2010-01-11) (pouvoir
d'approbation des contrats)
CONTRACT CLAIMS RESOLUTION BOARD (CCRB)

CCRB resolves claims resulting from contract disputes in a more economical, quicker and less formal process.
This Board takes a common sense alternative dispute resolution approach to problems and seeks to reach
settlements that are acceptable to all parties. A summary of the dispute resolution processes of the Contract
Settlement Board and the Contract Dispute Advisory Board is set forth in 8.145and 8.150respectively. (2010-
01-11) (Conseil de règlement des différends contractuels)
CONTRACT DATE
The effective date of the contract. (2010-01-11) (date du contrat)
contract dispute
Matter of dispute in respect of a contract that cannot be resolved between the contractor or its authorized
representative and the contracting officer designated in the said contract. (2010-01-11) (différend contractuel)
CONTRACT FOR SERVICE

1. A contract in which one party (the contractor) agrees to provide services to another with no day-to-day
supervision or control. It normally implies the accomplishment of a specified job or task to achieve a
prescribed objective.
2. An employer-employee relationship does not exist in contracts for services. (2010-01-11) (contrat de
services)
CONTRACT PRICE
1. General. The price or price formula stipulated in a contract of purchase or sale. It is also referred to as
firm price, target price, cost price, etc.
2. PWGSC contract. The amount expressed in the contract to be payable to the contractor for the work.
(2010-01-11) (prix contractuel)
CONTRACT SECURITY
A payment bond or a performance bond given on behalf of a person to Canada, to make good on any default by
that person under the contract by compensating Canada, or completing the performance of the contract to the
extent required by the terms and conditions of the payment bond or performance bond, or a security deposit
given by the person to Canada to secure the performance of the contract to the extent required by the terms and
conditions of the contract. (2010-01-11) (garantie contractuelle)
CONTRACT SIGNING AUTHORITY

The authority delegated by the minister of PWGSC to the person designated to occupy a position, that is, the
incumbent of a position, to sign on his/her behalf contract, contract amendment or standing offer documents
after ascertaining that the approval authority has been duly granted and ensuring that the terms and conditions
written in the documents reflect those approved by the contract approval authority. See contract approval
authority. (2010-01-11) (pouvoir de signature des contrats)
CONTRACTING AUTHORITY
1. The appropriate minister, as defined in paragraph (a) or (b) of the definition "appropriate Minister" in
section 2 of the Financial Administration Act.
2. A corporation named in Schedule II of the Financial Administration Act.
3. Defence Construction (1951) Limited, the National Capital Commission or the National Battlefields
Commission. See also contract approval authorityand appropriate minister.
4. The person authorized to enter into a contract on behalf of Canada. (2010-01-11) (autorité
contractante)
CONTRACTOR
1. General. This refers to any one of the parties to a contract.
2. One who contracts to perform work or furnish materiels in accordance with a contract. (2010-01-11)
(entrepreneur)
CONTROL
The process by which the activities of a project or organization conform to a desired plan of action. Examples of
control elements are: authority and capacity for its exercise, common understanding of purpose, objectives, plan
of organization and action, assumption of responsibility by organizational units, policies governing courses of
action, standards of performance appraisals and monitoring of performance, and ability to convert or modify
performance. (2010-01-11) (contrôle)
CONTROLLED GOODS
Controlled goods are defined under the schedule to the Defence Production Act. The goods listed in the
schedule to the Export Control List made under section 3 of the Export and Import Permits Act are controlled
goods. (2010-01-11) (marchandises contrôlées)
COPYRIGHT
1. An exclusive statutory right of those such as authors, publishers, composers, etc., to control the
publication/dispositions of their works of art, literature, music, films, pictures, etc., which is protected
by the Copyright Act of Canada. Under the Geneva Convention of 1952 to which Canada became a
party in 1962, international copyright is obtained without any formalities by placing on the work the
symbol 8, identifying the name of the copyright holder in the year of the first publication.
2. The exclusive right of printing or otherwise multiplying copies of information and data.
3. For a more comprehensive definition, see section 3 of the Copyright Act. (2010-01-11) (droit d'auteur)
CORCAN
CORCAN includes the Correctional Services Canada (CSC) Industries, and the Automated Document
Processing and Agribusiness programs. Purchases by PWGSC , on behalf of clients, from CSC will be
conducted through CORCAN. See 9.30. (2010-01-11) (CORCAN)
CORPORATION
An artificial person or legal entity created by or under the authority of the federal or provincial laws. The law
treats the corporation itself as a person, which can sue and be sued. The corporation is distinct from the
individuals who comprise it (shareholders). (2010-01-11) (société)
COST
1. General. The price paid for anything, outlay and expense. When a contract refers to actual cost, the term
means the amount, not including any profit, which was in fact paid out for materials and for labour.
2. PWGSC contract. Costs determined in accordance with Contract Cost Principles 1031-2.
3. Considered as total price in contract proposals for approval authority. (2010-01-11) (coût)
COST ACCOUNTING
The classification, recording, analysis, reporting and interpretation of expenditures associated with the
production and distribution of goods and services. (2010-01-11) (comptabilité du prix de revient)
COST ANALYSIS
1. An examination or review of cost data to determine if costs are charged in accordance with prescribed
criteria or regulations, for example the Contract Cost Principles 1031-2.
2. A study of cost data for the purpose of identifying the causes of inefficiency or the improvement
desirable in cost recording, supervision or management.
3. The estimation of production costs by the bidder.
4. The examination, before price negotiation, of the cost estimates presented by a potential supplier. Such
analysis is for the purpose of checking that only permitted types of cost are included, that no significant
cost category has been omitted, and that time, labour rates and other details are reasonable. (2010-01-
11) (analyse des coûts)
COST CENTRE
An administrative unit selected within an organization for the purpose of accumulating and controlling costs. It
usually consists of a natural grouping of machines, methods, processes or operations; is identified with single
management responsibility; and is made up of elements, which have common cost characteristics. (2010-01-11)
(centre de coûts)
COST CONTROL
Employment of management devices in the performance of any necessary operation so that pre-established
objectives of quality, quantity and time may be attained at the lowest possible outlay or cost for goods and
services. Such devices include a bill of material, instructions, performance standards, competent supervision,
cost limits on items and operations, and studies, interim reports and decisions based on these reports. (2010-01-
11) (contrôle des coûts)
COSTS INCURRED
Costs allowed under the Contract Cost Principles 1031-2applicable to a particular contract. See also cost. (2010-
01-11) (frais engagés)
COST OF GOODS
Stocked Item Supply. The price FOB supplier plus inbound transportation. (2010-01-11) (coût des biens)
COST OF SERVICE
Stocked Item Supply. This refers to all expenses (other than cost of goods) incurred by PWGSC in providing the
Stocked Item Supply service. (2010-01-11) (coût du service)
COST PLUS FIXED FEE

A basis of price in which the contractor is paid costs reasonably and properly incurred, as determined by audit
together with an agreed upon fixed fee (or a percentage of cost) by way of profit. (2010-01-11) (coût plus
honoraires fixes)
COST REIMBURSABLE CONTRACT

Contract where the contractor is reimbursed the applicable, allocable, reasonable direct and indirect costs
incurred by the contractor. There are five general types of cost reimbursable contract basis of payment as
follows: cost reimbursable with fixed time rate; cost reimbursable with incentive fee; cost reimbursable with
fixed fee; cost reimbursable with fee based on actual costs; and cost reimbursable with no fee. (2012-07-16)
(contrats à frais remboursables)
COUNTER OFFER
An offer to enter into a transaction on terms differing from those first proposed. A statement by the offeree
which has the legal effect of rejecting the offer and of proposing a new offer to the offeror. (2010-01-11)
(contre-offre)
COUNTRY OF ORIGIN
A country in which the product is mined, produced or manufactured. A product of domestic origin is a product
mined, produced, or manufactured in Canada. (2010-01-11) (pays d'origine)
CUSTOMS
Duties charged on commodities on their import into or export from a country by a governmental authority.
(2010-01-11) (douane)
CUSTOMS DUTY - DEFENCE

Tariff Code 9982.00.00 of the Schedule to the Customs Tariff provides for the remission of customs duty on all
defence supplies imported under contracts of $250,000 or more, by the Department of National Defence and
Public Works and Government Services Canada (PWGSC), as well as the private sector provided that the
person claiming remission provides certification by the minister of PWGSC that the goods supplied under the
contract are defence supplies. (2010-01-11) (droit de douane - défense)
CUSTOMS TARIFF
A schedule of charges assessed by the government on imported goods. (2010-01-11) (tarif des douanes)
DAMAGES
1. Compensation, usually in money, for injury to persons, or damage to goods or property.
2. General damages are such as the law will presume to be direct, natural and probable consequences of
the act in question.
3. Special damages are such as the law will presume to be exceptional in character.
4. See also liquidated damages. (2010-01-11) (dommages-intérêts)
DEFECT
1. General. A lack, want, deficiency or absence of something necessary for completeness, perfection or
adequacy in form or function.
2. An imperfection, fault or error in manufactured materiel and service.
3. Critical defect. A defect that judgment and experience indicate is likely to result in hazardous or unsafe
conditions for individuals depending on, using or maintaining the product.
4. Major defect. Other than critical defect that is likely to result in failure, or to reduce materially the
usability of the unit product for its intended purpose.
5. Minor defect. A defect that is not likely to reduce materially the usability of a unit product for its
intended purpose, or is a departure from established standards having little bearing on the effective use
or operation of the unit.
6. Latent defect. This refers to a hidden or concealed defect, one, which could not be discovered by
reasonable and customary inspection; one not apparent on the face of goods, product or a document.
(2010-01-11) (défaut)
DEFENCE CONTRACT
A contract or subcontract with Canada or an agent of Canada, or with an associated government, that in any
way relates to defence supplies or to defence projects or to the designing, manufacturing, producing,
constructing, finishing, assembling, transporting, repairing, maintaining or servicing, or storing of, or dealing in,
defence supplies or defence projects. (2010-01-11) (contrat de défense)
DEFENCE PRODUCTION ACT

An act that gives to the minister of PWGSC "exclusive authority to buy or otherwise acquire defence supplies".
The provisions of the Defence Production Act govern all PWGSC contracts for defence supplies or projects.
(2010-01-11) (Loi sur la production de défense)
DEFENCE PRODUCTION LOAN ACCOUNT

An account, which may be used to make loans or advances to aid in defence procurement, such as working
capital loans or advance payments on contracts and to make payment for such. See 9.25. (2010-01-11) (compte
de prêts de la production de défense)
DEFENCE PRODUCTION REVOLVING FUND

An account in the Consolidated Revenue Fund, which may be used by PWGSC to designate and operate the
DPRF for other than loan transactions. The DPRF provides PWGSC with a budgetary account to purchase
defence supplies, to make payment for such, and to get reimbursed out of an appropriation of a client (for
example, DND), or by an agent of Canada, or by an associated government. See 9.25.1. (2010-01-11) (Fonds
renouvelable de la production de défense)
DEFENCE PROJECTS
Buildings, aerodromes, airports, dockyards, roads, defence fortifications or other military works, or works
required for the production, maintenance or storage of defence supplies. (2010-01-11) (entreprises de défense)
DEFENCE SUPPLIES
This has the same meaning as in the Defence Production Act and covers:
1. Arms, ammunition, implements of war, vehicles, mechanical and other equipment, watercraft,
amphibious craft, aircraft, animals, articles, materials, substances and things required or used for the
purposes of the defence of Canada or for cooperative efforts for defence being carried on by Canada and
an associated government.
2. Ships of all kinds.
3. Articles, materials, substances and things of all kinds used for the production or supply of anything
mentioned in 1. or 2. above or for the construction of defence projects.
4. Requirements necessary or appropriate to promote national defence, which means programs for military
and atomic energy production or construction, military assistance and directly related activities. (2010-
01-11) (matériel de défense)
DELAYED BID
A bid delivered to the specified bid receiving area after the closing date and time but before the contract award
date may be considered, provided the delay can be proven to have been due solely to a delay in delivery that can
be attributed to the Canada Post Corporation (CPC) (or national equivalent of a foreign country) or to incorrect
handling by PWGSC . The only pieces of evidence relating to a delay in the CPC system that are acceptable are:
a CPC cancellation date stamp; a CPC Priority Courier Bill of Lading, and a CPC Xpresspost Label, which
clearly indicates that the bid was mailed before the bid closing date. (2010-01-11) (soumission retardée)
DELIVERY
1. Actual. The transfer of possessions.
2. Sale of goods. Delivery takes place when the goods are placed under the control of the person who has
to receive them. Alternatively, the presence of the goods at the seller's place of business, ready to be
delivered, and the purchaser notified, may be termed a delivery.
3. Shipping occurs when lading is surrendered and title to goods passes to the receiver or consignee.
(2010-01-11) (livraison)
DEPARTMENT
1. The same meaning as in the Financial Administration Act(FAA) and includes any of the departments
named in Schedule I and any corporation in Schedule II of the FAA, the staffs of the Senate, the House
of Commons, and the Library of Parliament. It includes further any division or branch of the public
service of Canada, including a commission appointed under the Inquiries Act, designated by the
Governor in Council as a department for the purposes of the FAA.
2. Department of Public Works and Government Services. (2010-01-11) (ministère)
DEPARTMENTAL INDIVIDUAL STANDING OFFER (DISO)

Used by PWGSC as a method of supply to: analyze customer demand, determine quantities and quality,
standardize products used by government, manage complex requirements and satisfy requirements for data
collection for reports to Treasury Board and the Auditor General's Office. Only PWGSC may issue call-ups
against a DISO upon receipt of a funded requisition from a customer department. (2010-01-11) (offre à
commandes individuelle et ministérielle [OCIM])
DEPRECIATION
1. Decrease in value, particularly the deterioration or the loss in value arising from age and use of a
property.
2. The gradual exhaustion of the service capacity of fixed assets, which is not restored by maintenance
practices. It is the consequence of such factors as use, obsolescence, inadequacy and decay.
3. A proportionate charge as an expense for a period based on the cost or other recorded value of fixed
assets. (2010-01-11) (amortissement)
DESIGN AUTHORITY
The component of the client or its delegated agency responsible for determination of design parameters. (2010-
01-11) (responsable de la conception)
DESIGN CHANGE
A permanent change or modification to the governing technical data. (2010-01-11) (modification de
conception)
DESIGN DEVIATION
A temporary departure from governing technical data. (2010-01-11) (altération de conception)
DIRECT COST
Any item of cost, or the total of such items, which can be directly related to a particular product, service,
program, function or project; usually, but not necessarily limited to items of material and labour and direct
overhead. (2010-01-11) (coût direct)
DIRECT LABOUR
The labour applied to the material that will form an integral part of the final product in a manufacturing process.
(2010-01-11) (main-d'œuvre directe)
DIRECT LABOUR COSTS

The approved direct labour costs applicable to the estimated costs of a negotiated contract. Negotiated labour
costs for a lengthy contract may include predicted increases in labour rates. (2010-01-11) (frais de main-
d'œuvre directe)
DIRECT MATERIAL
The material that will form an integral part of the final product in a manufacturing process. (2010-01-11)
(matières directes)
DISCOUNT
1. A reduction from a list price or a stated amount offered by the seller to the buyer.
2. A cash discount is an allowance extended to encourage payment of invoice on or before a stated date,
which is earlier than the net date. The percent of discount allowed is agreed upon between buyer and
seller and is often established by industry or trade custom.
3. To compute the present value of a future sum. (2010-01-11) (escompte)
DISCRETIONARY AUDIT
1. Verification done on a discretionary basis by the government of profit on a contract or a series of
contracts.
2. Verification that Canada is not being charged in excess of the lowest price charged anyone else. This
verification is employed in conjunction with a price certification on negotiated firm price contracts.
(2010-01-11) (vérification discrétionnaire des comptes)
DISCRETIONARY VERIFICATION
An independent verification by Audit Services Bureau or other qualified personnel as approved by Acquisition
Program Integrity Secretariat, to supplement the checks and verifications carried out by the contracting officers
and/or cost analysts, to ensure the timeliness of payments by contractors to workmen, subcontractors and
suppliers. (2010-01-11) (vérification discrétionnaire)
DISPOSAL
The removal of materiel from a supply system by sale, trade-in or destruction. Within the federal government,
disposal is normally arranged through the PWGSC Crown Assets Distribution Directorate/Centre. (2010-01-11)
(aliénation)
DISTRIBUTOR
A supplier who acquires goods for resale to a wholesaler, retailer or ultimate consumer. A distributor may sell
goods from their own inventory, from a consignment inventory, or directly from the manufacturer's stock.
(2010-01-11) (distributeur)
DUTY
1. General. A tax levied by a government on the importation, exportation, or use and consumption of
goods.
2. Any duties or taxes levied on imported goods under the Customs Tariff, the Excise Tax Act, the Excise
Act, the Special Import Measures Act, or any other law relating to customs.
3. All applicable duties. All duties in effect on the contract date imposed and collected by the taxing
authority on the transaction or property covered by the contract. (2010-01-11) (droit)
ECONOMIC PRICE ADJUSTMENT

Price adjustments, both upward and downward, which are necessary either to protect Canada and the contractor
against significant economic fluctuations in labour and material costs, including services and supplies, or in the
event of changes in the contractor's established prices attributable to industry-wide economic factors. (2010-01-
11) (indexation des prix)
EFFECTIVENESS
1. Auditor General. The extent to which a program achieves its goals or other intended effects. For
example: to increase income in a particular area, a program might be devised to create jobs. The jobs
created would be program output. This contributes to the desired program effect of increased income,
which can be measured to assess program effectiveness. Of course, not all programs are equally
evaluated. Also, management procedures for measuring and reporting effectiveness will differ between
programs.
2. General. The measure of how well a group, person, function or program reaches its objectives or
achieves results. (2010-01-11) (efficacité)
EFFICIENCY
1. Auditor General. The relationship between goods or services produced, and resources used to produce
them. An efficient operation produces the maximum output for any given set of resource inputs, or it has
minimum inputs for any given quantity and quality of service provided.
2. General. A measure of how well a person, group, function or program uses its time and resources to
achieve certain results, that is, total resources consumed. (2010-01-11) (efficience)
ELECTRICAL EQUIPMENT
Any apparatus, appliance, device, instrument, fitting, fixture, machinery, material or thing used in or for, or
capable of being used in or for, the generation, transformation, transmission, distribution, supply or utilization
of electrical power or energy, and without restricting the generality of the foregoing, including any assemblage
or combination of materials or things, which are used or are capable of being used or adapted, to serve or
perform any particular purpose or function when connected to an electrical installation, notwithstanding that
any of such materials or things may be mechanical, metallic or non-electric in origin. (2010-01-11) (matériel
électrique)
ELECTRONIC BIDDING
A method of procurement that promotes suppliers' access to, and transparency in, the procurement process and
facilitates Canada's receipt of best value, by using:
1. public notice by means of an approved electronic information service of procurement opportunities

(e.g., Government Electronic Tendering Service [GETS]);
2. public notice by means of an electronic information service of proposed directed procurements by

means of an Advance Contract Award Notice;
3. such other procurement methods as may be approved by the Treasury Board. (2013-06-01) (invitation
électronique à soumissionner)
EMPLOYMENT EQUITY
A concept that encourages the removal of employment barriers; identifies and removes discriminatory policies
and practices; seeks the goal of fair representation for all Canadians, in particular women, Aboriginal people,
disabled persons and visible minorities; and promotes economic development through the full utilization of the
talents of all Canadians. (2010-01-11) (équité en matière d'emploi)
ENGINEERING CHANGE PROPOSAL

Design change procedure used in aircraft procurement. The ECP form provides the data concerning a proposed
change and, when signed by design and procurement authorities, becomes a change order. (2010-01-11)
(proposition de modification technique)
EQUIPMENT
Major items of materiel that are not expendable except through depreciation or wear and tear and which,
although they may be fixed or positioned in prescribed places, do not lose their identity or become integral parts
of other equipment and installations. Items in this category are normally susceptible to running maintenance.
Equipment items are usually procured, issued and replaced on the basis of planned departmental capital
acquisition programs, for example, aircraft vehicles, vessels, boats, workshop machinery, electronics systems.
(2010-01-11) (équipement)
ESCALATION
See economic price adjustmentor adjustment. (2010-01-11) (indexation)
ESTIMATED COST
The estimated cost to be used as the basis for the sourcing decision is that cost determined, through consultation
between PWGSC and the client, as being representative of all known work and expected unscheduled work,
arising out of the requirement, that is, the total estimated contract value. (2010-01-11) (coût estimatif)
EXCHANGE RATE ADJUSTMENT

The exchange rate adjustment is the adjustment amount, plus, minus or zero that will be shown as a line item on
each invoice for contracts with an exchange rate fluctuation provision and reflected in the total price payable for
the invoice. It is calculated in accordance with the contract provisions using form PWGSC-TPSGC 450 Claim
for Exchange Rate Adjustments (http://www.tpsgc-pwgsc.gc.ca/app-acq/forms/formulaires-forms-eng.html#f2) . (2013-11-06)
(rajustement de fluctuation du taux de change)
EXECUTORY COSTS
Costs related to the operation of the leased property (for example, insurance, maintenance cost and property
taxes). (2010-01-11) (coûts exécutoires)
EX GRATIA PAYMENT
A payment made pursuant to the Treasury Board Directive on Payments: “a benevolent payment made by the
Crown used only when there is no other statutory, regulatory or policy vehicle to make such a payment. The
payment is made in the public interest for loss or expenditure incurred where the Crown has no obligation of
any kind or has no legal liability, or where the claimant has no right of payment or is not entitled to relief in any
form.” (2017-08-17) (paiement à titre gracieux)
EXPORT PERMIT
A permit issued on application, by Industry Canada, to a resident of Canada for the export of certain goods
covered by the Export Permit Regulations. (2010-01-11) (permis d'exportation)
EXTRA PAYMENT CLAIM

Claims made by a contractor against Canada in respect of firm or ceiling price contracts where a legal liability
does not exist or where there is uncertainty that a legal liability exists under the contract. (2010-01-11)
(demande d'indemnisation)
EXTRACT FILE
A file created when a requisition is formally subdivided and involves procurement action by a contracting
officer other than the main file holder. (2010-01-11) (dossier d'extraits)
FACILITY
1. A physical plant or installation; for example, base, arsenal or building, used to make the performance of
a function easier.
2. The materiel resources needed to facilitate any action or operation. (2010-01-11) (installation)
FACILITY EVALUATION
A survey/examination of any or all of the capabilities of a supplier that pertain to competence as a source of
supply or recipient of aid. Pre-award surveys are made in cases of doubt regarding productive capability, quality
control or financial strength. (2010-01-11) (évaluation des installations)
FACILITY SECURITY CLEARANCE

A determination by the Canadian Industrial Security Directorate that, from a security viewpoint, an organization
is eligible for access to Canadian and foreign government information or assets, which are “classified” or
“protected” at the same level as the clearance being granted or to a lower level. (2010-01-11) (attestation de
sécurité d'installation)
FAIR MARKET VALUE

1. The price that would be agreed to in an open and unrestricted market between knowledgeable and
willing parties, dealing at arm's length, who are fully informed and not under any compulsion to
transact.
2. The word “fair” implies a concept of a market, which is not disturbed by unpredictable economic
factors; for example, boom or depression. (2010-01-11) (juste valeur marchande)
FAS FREE ALONGSIDE SHIP (...NAMED PORT OF SHIPMENT)
The book containing the International Chamber of Commerce (ICC) official rules for the interpretation of trade
terms is entitled " Incoterms 2000 (http://www.iccwbo.org/incoterms/id3040/index.html) " , and the location of a summary
for the description of FAS. The responsible obligations of the buyer and seller cannot be found on the ICC Web
site; that information may only be found in the Incoterms 2000 book. (2010-01-11) (FAS franco le long du
navire [...port d'embarquement convenu])
FCA FREE CARRIER (...NAMED PLACE)

The book containing the International Chamber of Commerce (ICC) official rules for the interpretation of trade
terms is entitled " Incoterms 2000 (http://www.iccwbo.org/incoterms/id3040/index.html) " , and the location of a summary
for the description of FCA. The responsible obligations of the buyer and seller cannot be found on the ICC Web
site that information may only be found in the Incoterms 2000 book. (2010-01-11) (FCA franco transporteur
[... lieu convenu])
FEDERAL SUPPLY CLASSIFICATION

PWGSC uses the U.S. Federal Supply Classification (FSC) system as the basis for assigning commodity
procurement responsibilities, and the Goods and Services Identification Number (GSIN) system permits the
definitive assignment of responsibilities for item groupings within FSC. (2010-01-11) (classification fédérale
des approvisionnements)
FINAL PAYMENT
Payment made in satisfaction of a final invoice. This refers to a payment, which completes the monetary
settlement in accordance with the conditions of the contract. (2010-01-11) (paiement final)
FINANCIAL ANALYSIS
The process of selecting relevant financial information about the supplier, developing significant relationships
(ratios), studying these relationships and interpreting the results. (2010-01-11) (analyse financière)
FIRM BASE PRICE OR FIRM BASE PRICE ELEMENTS

The otherwise firm price or firm price elements identified within the contract basis of payment from which
economic price adjustments will be made on the occurrence of certain specified contingencies. (2010-01-11)
(prix de base ferme ou éléments de prix de base ferme)
FIRM PRICE
A method of pricing in which the total amount payable is a fixed lump sum, or is an amount determinable in
accordance with fixed unit prices. (2010-01-11) (prix ferme)
FIRM PRICE CONTRACT

A contract that sets the total amount payable, or pursuant to which the total amount payable is the product
obtained, by multiplying the number of identical units of work performed or identical items delivered by a
predetermined fixed price for each unit or item. (2010-01-11) (contrat à prix ferme)
FIRST TIER SUBCONTRACTOR

(For purposes of the Integrity Regime.)
A subcontractor with whom a bidder, offeror or supplier or contractor plans to have or has a direct contractual
relationship to perform a portion of the work pursuant to a contract between the contractor and Canada
(meaning all the activities, services, goods, equipment, matters and things required to be done, delivered or
performed by the contractor under the contract), unless the subcontractor merely supplies commercial-off-the-
shelf goods to the contractor. (2016-04-04) (premier sous-traitant)
FIXED TIME RATE

A method of pricing in which the amount payable is determined in accordance with the combined cost of
labour, overhead and profit, as expressed by a fixed amount by time period. (2010-01-11) (taux fixe basé sur le
temps)
FIXED UNIT PRICE

A method of pricing in which the total amount payable is the product of the number of identical units of work
performed or identical items delivered, multiplied by a predetermined fixed price for each unit or item. (2010-
01-11) (prix unitaire fixe)
FOB (FREE ON BOARD)

A mercantile term used extensively in both domestic and international trade.
1. As a domestic trade term, used in both Canada and the United States, FOB ordinarily determines the
place where the seller effects delivery of the goods, where title and risk of loss will pass, and whether
the seller or the buyer is required to pay freight charges (for example, FOB New York), unless otherwise
specified in the contract. Specific application of the term FOB either with reference to transfer of title,
risk, or burden of freight charges, may vary according to applicable law, custom and usage or agreement
of the parties concerned.
2. As an Incoterm, FOB is defined by the International Chamber of Commerce and can only be used for
shipments by seagoing vessels. ( Note: There are 13 Incoterms 2000
(http://www.iccwbo.org/incoterms/id3040/index.html) , 6 of which can only be used for shipments by seagoing
vessel.)The contractual rights and obligations of this and similar mercantile terms are used in
international commerce. (2010-01-11) (FAB franco à bord)
FOREGROUND INFORMATION
All intellectual property first conceived, developed, produced or reduced to practice as part of the work under
the contract. (2010-01-11) (renseignements originaux)
FOREIGN CURRENCY COMPONENT (FCC)

The portion of the price or rate that will be directly affected by exchange rate fluctuations. The FCC will
typically include all related taxes, duties and other costs paid by the bidder and which are to be included in the
adjustment amount. It may also include entry fees, transportation costs or delivery charges, and any other
charges associated with being the importer of record which are paid in a foreign currency. (2013-11-06)
(montant en monnaie étrangère)
FOREIGN MILITARY SALES (FMS)

A Security Assistance Program, which is administered by the United States Department of Defence, and allows
eligible foreign governments and international agencies to purchase defence-related articles and services from
the United States Government. See 9.15. (2010-01-11) (ventes de matériel militaire à l'étranger [FMS])
FOREIGN OWNERSHIP, CONTROL OR INFLUENCE (FOCI)

Assessments are designed to ensure that no third party, individual, firm, or government is assumed to possess
dominance of, or authority over, a Canadian facility to such a degree that it could gain unauthorized access to
INFOSEC information. (2010-01-11) (participation, contrôle et influence étrangers [PCEI])
FORMAL AGREEMENT
An agreement executed under seal by the parties and signed by the Corporate Secretary, the person responsible
for affixing the seal for Canada. (2010-01-11) (accord officiel)
FORMER PUBLIC SERVANT

Any former member of a department as defined in the Financial Administration Act, former member of the
Canadian Armed Forces or former member of the Royal Canadian Mounted Police. (2011-05-16) (ancien
fonctionnaire)
GENERAL AND ADMINISTRATIVE RATE

Estimated general and administrative expenses are a percentage of material, labour and overhead costs. (2010-
01-11) (coefficient de dépenses générales et administratives)
GOODS AND SERVICES IDENTIFICATION NUMBER (GSIN)

A system of material and services categorization used within PWGSC . The system is used in conjunction with
the Federal Supply Classification (FSC) code. (2010-01-11) (numéro d'identification des biens et services
[NIBS])
GOODS CONTRACT
An agreement for the purchase of articles, commodities, equipment, goods, materials or supplies and includes:
printing or the reproduction of printed matter and the construction or repair of a vessel. (2010-01-11) (contrat
de biens)
GOVERNMENT ELECTRONIC TENDERING SERVICE (GETS)

The service used by the federal government to post notices (for example, Notices of Proposed Procurement,
Advance Contract Award Notices and Contract Award Notices) and to make available solicitation documents.
This service provided through Buyandsell.gc.ca/tenders becomes the official site for Canada to meet its trade
agreement obligations and is the authoritative and first source for Government of Canada tenders. For more
information about GETS, visit the Buyandsell.gc.ca Tenders minisite or contact the support line at 1-855-886-
3030.(2013-06-01) (Service électronique d'appels d'offres du gouvernement [SEAOG])
GOVERNMENT FURNISHED EQUIPMENT

Equipment supplied by Canada to be used in the production process; for example, tooling, jigs, dies, production
equipment. See special production tooling, special test equipment and production assets. (2010-01-11)
(équipement fourni par le gouvernement)
GOVERNMENT GUARANTEED BOND

A bond of the Government of Canada or a bond unconditionally guaranteed as to the principal and interest by
the Government of Canada that is:
1. Payable to the bearer.
2. Accompanied by a duly executed instrument of transfer of the bond to the Receiver General in the form
prescribed by the Domestic Bonds of Canada Regulations.
3. Registered in the name of the Receiver General. (2010-01-11) (obligation garantie par le
gouvernement)
GOVERNMENT ISSUE
1. Defence Production Act means machinery, machine tools, equipment or defence supplies furnished,
acquired or purchased by or on behalf of the government or associated government with funds provided
by the government or associated government.
2. PWGSC contracts. All materials, parts, components, equipment, specifications, articles and things,
which may be supplied to a contractor by the government for performance of the (contract) work.
(2010-01-11) (fournitures d'État)
GOVERNMENT PROPERTY
Anything supplied to the contractor by or on behalf of Canada for the purposes of performing the contract, and
anything acquired by the contractor in any manner in connection with the work, the cost of which is paid by
Canada under the contract. (2010-01-11) (biens de l'État)
GOVERNMENT QUALITY ASSURANCE (GQA) AT SOURCE

The activity of the inspection authority or the GQA authority in monitoring or observing at the contractor's
plant, before delivery, to verify whether a product, service and/or quality system complies with the technical
requirements stipulated in the contract. (2010-01-11) (assurance officielle de la qualité [AOQ] à la source)
GOVERNMENT-SUPPLIED MATERIEL (GSM)

Any item of materiel acquired by the government of Canada and provided on a "free issue" basis to contractors
for embodiment in materiel under production or for incorporation into Crown-owned equipment undergoing
modification, repair or overhaul. (2010-01-11) (matériel fourni par le gouvernement)
GRANT
An unconditional transfer payment made to a recipient, for which Canada will not receive any goods or
services. (2010-01-11) (subvention)
GREEN PROCUREMENT
The integration of environmental considerations, along with quality, performance, price and availability into the
procurement process, from planning to final disposal. Green procurement means that environmental impacts of
the goods we procure, which have been appropriately considered in value for money decisions. (2010-01-11)
(achat écologique)
HOLDBACK
This refers to an amount withheld under a contract, to ensure the performance of the contract, and also to avoid
overpayments in relation to progress of work. (2010-01-11) (retenue)
HYPOTHECATED BOND
To pledge as collateral, such as personal property, as security for a debt without transfer of possession. This is
used in relation to bid/security deposits and performance bonds. (2010-01-11) (obligation cautionnée)
IMPORTER
A contractor, subcontractor or a supplier who actually imported the goods or materiel. (2010-01-11)
(importateur)
IMPORTER OF RECORD
The consignee or importer shown on the import entry form and on the Canada Customs Invoice or commercial
invoices who is responsible for customs clearance and payment of the Goods and Services Tax or Harmonized
Sales Tax. (2010-01-11) (importateur officiel)
INBOUND LOGISTICS
The definition of “inbound logistic” is a matter of perspective. Shipments to Canadian Forces from repair and
overhaul facilities and shipments off new acquisitions are considered inbound. Inbound logistics does not have
an agreed-upon definition in the industry. A shipment is inbound to the receiver; conversely, shipments that are
sent out B, as a raw materiel supplier, manufacturer or vendor might do B, are outbound from the sender. For
inbound logistics planning, the focus of transportation management is on planning the receipt of the shipment.
The definition of inbound logistics is related not only to the controller of the shipment process, but also who
takes ownership of the goods shipped. (2010-01-11) (logistique interne)
INCOME
The return in money from one's business, labour or capital invested; gains, profits or private revenue. The
excess of revenues over expenses for a period is usually referred to as net income. (2010-01-11) (revenu)
INCOTERMS
Incoterms 2000 (http://www.iccwbo.org/incoterms/id3040/index.html) are standard trade definitions most commonly used
in international sales contracts. They are protected by the International Chamber of Commerce copyright. They
are part of the sales contract and not of the contract of carriage. (2010-08-16) (Incoterms)
INDEMNIFY
1. To compensate against loss or damage incurred by another; to reimburse another for such loss or
damage.
2. The word “indemnify” may mean either to prevent loss so that it does not occur, or to make
reimbursement or compensation after the loss has occurred. (2010-01-11) (indemniser)
INDIRECT COST
An item of cost that cannot be reasonably identified with a specific unit of product or with a specific operation
or other cost centre. An indirect cost is usually allocated to several cost objectives. (2010-01-11) (coût indirect)
INDUSTRIAL SECURITY
Covers all that relates to security requirements under the terms of a contract, subcontract, standing offer,
agreements, which will demand that identified private sector suppliers and their personnel be security screened
and, if required, that the physical premises of the proposed contractor be inspected and approved to safeguard,
produce or process “Protected” or “Classified” information, assets or data, prior to gaining access to such
information or assets. (2010-01-11) (sécurité industrielle)
INELIGIBILITY AND SUSPENSION LIST
A public list of companies that have been determined to be ineligible or suspended by PWGSC under the
Ineligibility and Suspension Policy. (2016-04-04) (Liste d'inadmissibilité et de suspension)
INFOSEC
All Communications-Electronic Security (COMSEC) information and material entrusted to or
developed/evaluated by or for the Communications Security Establishment. (2010-01-11) (INFOSEC)
INSOLVENCY
A condition where a supplier, although not bankrupt, is either unable to meet its obligations, as they generally
become due, or has ceased paying current obligations in the ordinary course of business, or whose assets have a
realizable value insufficient to pay all its obligations. (2010-01-11) (insolvabilité)
INSPECTION
1. General. A close scrutiny or an examination. The process of determining conformance of a product to
the applicable requirements.
2. 100 percent. The inspection of each unit of product or the whole material, as opposed to any form of
sampling inspection.
3. Final. The last of several inspections at successive stages of manufacture, repair, modification, etc.
4. Normal. The inspection that is used when there is no statistically significant evidence that the quality of
the product being submitted is higher or lower than the specified quality level.
5. Original. The first inspection of a particular quantity of product, as distinguished from inspection of a
product that is resubmitted after prior rejection.
6. Receiving. Inspection by a client of materials and manufactured products, as delivered.

7. Reduced. Provision in a sampling procedure for switching to a less severe sampling plan when there is
evidence that the submitted quality level is higher than the specified quality level.
8. Source. The inspection of supplies or services at the point of manufacture or point of shipment.
9. Activities such as measuring, examining, testing, gauging one or more characteristics of a product or
service and comparing these with specified requirements to determine conformity.
10. The activity of monitoring or observing, before delivery, to verify whether a product, service and/or
quality system complies with the technical requirements stipulated in the contract. (2010-01-11)
(inspection)
INSPECTION AT SOURCE
Refer to Government Quality Assurance (GQA) at Source. (2010-01-11) (inspection à la source)
INSPECTION AUTHORITY
The person designated as such in the contract. This includes any person acting, on behalf of Canada or the
Minister, as the inspection authority in relation to the contract. For purposes of contracts for the Department of
National Defence, inspection authority includes quality assurance authority. (2010-01-11) (responsable de
l'inspection)
INSURANCE
A contract of indemnity whereby one party (the insurer) undertakes to indemnify the other (the insured) against
damage or loss, on a specified subject by specified perils in consideration of a payment received (a premium).
The instrument by which the contract is entered into is called the policy. (2010-01-11) (assurance)
INTELLECTUAL PROPERTY
Any information or knowledge of an industrial, scientific, technical, commercial, literary, dramatic, artistic or
otherwise creative nature relating to the work, whether oral or recorded in any form or medium and whether or
not subject to copyright; this includes but is not limited to any inventions, designs, methods, processes,
techniques, know-how, show-how, models, prototypes, patterns, samples, schematics, experimental or test data,
reports, drawings, plans, specifications, photographs, manuals and any other documents, software, and
firmware. (2010-01-11) (propriété intellectuelle)
INTEREST
The compensation allowed by law, or fixed by the parties, for the use or retention by one party of a sum of
money or other property belonging to another. It may take the form of a lump sum payment or periodical
payments at a rate percent. (2010-01-11) (intérêt)
INTEREST RATE IMPLICIT IN THE LEASE

The discount rate that, at the inception of the lease, causes the aggregate present value of: the minimum lease
payments, excluding that portion of the payments representing executory costs to be paid by the lessor, and any
profit on such costs, and the unguaranteed residual value accruing to the benefit of the lessor, to be equal to the
fair value of the leased property to the lessor at the inception of the lease. (2010-01-11) (taux d'intérêt
implicite du bail)
INTERIM STANDARD
A standard published to satisfy a clear and urgent need without passing through all the procedural and review
processes required for Canadian General Standards Board standards or National Standards of Canada. (2010-01-
11) (norme provisoire)
INTERNATIONAL CONTRACT
Canadian Commercial Corporation (CCC ). The contract between CCC and the foreign government, their
agencies or international organizations. (2010-01-11) (contrat international)
INVENTION
Patent law. The creation of something that did not exist before, by the exercise of a creative mind, possessing
elements of novelty and utility and measure different from anything that preceded the same. (2010-01-11)
(invention)
INVENTORY
This refers to an itemized list of goods, showing the number and usually the value of the goods. (2010-01-11)
(stock)
INVITATION FOR BIDS

See bid solicitation. (2010-01-11) (demande de soumissions)
INVITATION TO TENDER (ITT)

A bid solicitation document used by PWGSC when the estimated value of the requirement exceeds $25,000;
two or more sources are considered capable of supplying the requirement; the requirement is adequately defined
in all respects to permit the evaluation of tenders against clearly stated criteria; tenders can be submitted on a
common pricing basis; and it is intended to accept the lowest-priced responsive tender without negotiations.
(2010-01-11) (appel d'offres)
INVOICE
A billing document prepared by the seller setting out the details of goods sold or services rendered to the
purchaser including quantity, price, terms of payment, etc. (2010-01-11) (facture)
ITEM DESCRIPTION
The data necessary to establish the identity of an item of supply for materiel management purposes. (2010-01-
11) (description d'un article)
JOBBER
This refers to a middleman or dealer who purchases goods from manufacturers or importers for resale to
retailers. They are also called dealer or wholesale merchant. (2010-01-11) (revendeur)
JOINT VENTURE
Association of two or more parties who combine their money, property, knowledge, expertise or other resources
in a single joint business enterprise, sometimes referred as a consortium, to bid together on a requirement.
(2010-01-11) (coentreprise)
LAID-DOWN COST
The cost incurred by a supplier to acquire a specific product or service for resale to the government. This
includes the supplier's invoice price (less trade discounts), plus any applicable charges for incoming
transportation, foreign exchange, customs duty and brokerage, but excludes the Goods and Services Tax and the
Harmonized Sales Tax. (2010-01-11) (prix de revient)
LATE BID
A bid delivered to the specified bid receiving unit after the closing date and time stipulated in the bid
solicitation. (2010-01-11) (soumission en retard)
LEASE
1. Government Contracts Regulations. An agreement whereby Canada acquires a leasehold interest in real
property situated in or outside Canada and includes a tenancy agreement and a license in respect of real
property.
2. The Canadian Institute of Chartered Accountants (CICA). This refers to the conveyance, by a lessor to a
lessee, of the right to use a tangible asset, usually for a specified period of time in return for rent.
3. Capital lease. A lease that, from the point of view of the lessee, transfers substantially all the benefits
and risks incident to ownership of the property to the lessee.
4. Operating lease. This refers to a lease in which the lessor does not transfer substantially all the benefits
and risks incident to ownership of property. (2010-01-11) (bail)
LETTER OF INTENT
A commitment to award a contract to a designated contractor. It may be used to authorize commencement of the
work before the award of a contract, in those cases where the contract provisions require time-consuming
negotiations, and the timely delivery of goods or services would be jeopardized by waiting for the award of the
contract. A letter of intent is issued subsequent to approval of those terms and conditions, which have been
already agreed to between Canada and the contractor, but before obtaining approval of all the terms and
conditions of the proposed contract. (2010-01-11) (lettre d'intention)
LETTER OF INTEREST
A letter of interest or Request for Information is used when the buyer is interested in receiving feedback from
suppliers and may re-open or re-issue an opportunity as an open tender at a later day. (2010-01-11) (lettre
d'intérêt)
LEVEL 1 PROCUREMENT
Level 1 Procurement has the characteristics of clarity and completeness. The requirement is known and
identifiable, and evaluation methods are straightforward and do not require subjective judgement. The methods
for soliciting bids and contracting are pre-determined and set out. There is little need for analysis or speculation.
There is an absence of change with the procurement process. Contract administration is predictable and
established (2014-09-25) (achat de niveau 1)
LEVEL 2 PROCUREMENT
Level 2 Procurement has the characteristics of judgment, review, and assessment. The procurement is based on
the process of finding a solution to a requirement using existing technology and processes. Evaluation methods
have to be defined, require subjective judgement, and may use pre-established strategies. The procurement
process is established and understood though it can be complicated (many details or factors). Contract
administration is predictable and established. (2014-09-25) (achat de niveau 2)
LEVEL 3 PROCUREMENT
Level 3 Procurement has the characteristics of dealing with the unknown and requires creativity and ongoing
development using new, or a combination of new and existing technology and processes. It is based on
achieving a goal/target and driven by managing change/phases. Pre-established methods of supply may have to
be modified and procurement strategies and evaluation methodologies may have to be researched or developed.
The procurement may involve partnerships with clients, and control may be shared. Contract administration is
detailed and extensive and may be unpredictable. (2014-09-25) (achat de niveau 3)
LEVEL 4 PROCUREMENT
Level 4 Procurement involves enterprise-wide transformations (across the federal government). It has the
characteristics of dealing with the unknown and a high level of uncertainty and change. The procurement may
involve partnerships with clients and multiple stakeholders within various federal government departments,
where decision-making is shared. Contract administration is detailed and extensive and its success is
unpredictable. (2014-09-25) (achat de niveau 4)
LEVEL 5 PROCUREMENT
Level 5 Procurement involves public transformations affecting the public domain. It has the characteristics of
dealing with the unknown and a high level of uncertainty and change. The procurement may involve
partnerships with clients, multiple stakeholders (internal and external to the federal government) and elected
officials, to reshape public policy or introduce new public policies. Decision-making is shared. Its ultimate
success is determined by the public at large. (2014-09-25) (achat de niveau 5)
LIABILITY
1. A broad legal term. In general, a debt owed. The condition of being actually or potentially subject to an
obligation; a condition of being responsible for a possible or actual loss, penalty, evil, expense or
burden; a condition that creates a duty to perform an act immediately or in the future.
2. Primary liability. This refers to a liability for which a person is directly responsible.
3. Secondary liability. This refers to a liability of a contingent nature such as the liability of a guarantor. A
guarantor's liability does not arise until the principal debtor has failed to pay the creditor. (2010-01-11)
(responsabilité)
LICENSE
A grant of permission – a power or authority given to another to do some lawful act. (2010-01-11) (licence)
LICENSE AGREEMENT
A contract by which permission is given by the owner of a right to another, for the use of that right, free from
legal recourse. (2010-01-11) (contrat de licence)
LIEN
A claim, encumbrance, or charge on property for payment of some debt, obligation or duty. Qualified right of
property which a creditor (like a bank) has in or over specific property of his debtor, as security for the debt or
charge or for performance of some act. (2010-01-11) (privilège)
LIMITATION OF EXPENDITURE
In the context of a contract, with or without task authorizations, the limitation of expenditure is the maximum
amount of money that may be paid to a contractor for the prescribed work. The limitation of expenditure is
normally used in service requirements where the level of effort cannot be accurately estimated at the outset. At
the client’s request, the contracting authority will amend the contract to provide additional funds, or request the
contractor to complete the work to the extent that the allocated funding permits.
In the context of a standing offer, a limitation of expenditure is a financial limit on the total expenditures of
call-ups against a standing offer. The offeror must not perform any work or services or supply any goods in
response to call-ups which would cause the total cost to exceed the limitation of expenditure, unless an increase
to the limitation of expenditure is authorized by the standing offer authority. The inclusion of a limitation of
expenditure in a standing offer is optional. (2017-08-17) (limitation des dépenses)
LIQUIDATED DAMAGES
A specific sum of money expressly stipulated by the parties in a contract as the amount of damages to be
recovered by either party for a breach of the agreement by the other. It must be a genuine pre-estimate of the
loss that will be caused to one party if another party breaks the contract. It constitutes the amount, no more and
no less, that the plaintiff is entitled to recover in the event of breach without being required to prove actual
damages. (2010-01-11) (dommages-intérêts fixés en argent)
LISTING PROGRAM
The entire process by which a specific product/service/supplier is designated as conforming to the requirements
of standards or specifications, including those for quality assurance, and identified for subsequent procurement
on a qualified products list. See Qualified Products List, Certified Products List. (2010-01-11) (programme de
listage)
LOAN
Anything lent or given to another on condition that it be returned or repaid, either with or without interest.
(2010-01-11) (prêt)
LOAN AGREEMENT
An agreement pursuant to which some Department of National Defence equipment is loaned by PWGSC to a
contractor. (2010-01-11) (convention de prêt)
LOW DOLLAR VALUE
Requirements that are generally less complex and a low risk, with an estimated total value below $25,000,
including all applicable taxes. (2010-01-11) (faible valeur)
LUMP SUM PAYMENT

The price agreed upon between the vendor and the purchaser for a group of items without breakdown of
individual values; a lot price. (2010-01-11) (paiement forfaitaire)
MACHINE TOOL
This refers to a class of production tools basic to many manufacturing industries; power-driven, precision metal-
working machines, which remove metal in the form of chips by cutting or grinding, such as lathes, drill presses,
boring mills, planers, milling machines, shapers and grinders. (2010-01-11) (machine-outil)
MAINTENANCE
1. Materiel. All action to retain materiel in a serviceable condition or to restore it to serviceable conditions.
It includes inspection, testing, servicing, classification, as to serviceability, repairs, rebuilding and
reclamation.
2. The cost of keeping a property in efficient working condition. (2010-01-11) (maintenance)
MANDATORY STANDING OFFERS

If PWGSC has issued a standing offer that covers the client's specific requirement, departments must use that
standing offer for its acquisition. For a complete list of existing standing offers, consult the Standing Offer
Index . (2010-01-11) (offres à commandes obligatoires)
MANUFACTURING
The production of articles for use from raw or prepared materials by giving to these materials new form,
qualities and properties or combinations thereof whether by hand or machinery. (2010-01-11) (fabrication)
MARKET PRICE
1. The price at which a seller is ready and willing to sell and a buyer is ready and willing to buy in the
ordinary course of trade. It is the actual price at which a given commodity is currently sold or has
recently been sold in the open market, that is, not a forced sale. See fair market value and market value.
2. Accounting. The prevailing or last quoted price under conditions applicable in the circumstances. Net
realizable value. (2010-01-11) (prix du marché)
MARKET VALUE
The price, which a product or property might be expected to bring, if offered for sale in a fair market; that is, a
market that is not temporarily prone to fluctuations. It is the price that would be fixed by negotiation and mutual
agreement between a willing buyer and a supplier who is willing but not compelled to sell. (2010-01-11)
(valeur marchande)
MARK-UP
1. Defence Production Act. The amount added to cost in determining the selling price to cover overhead
and profit.
2. The difference between the contractor's laid-down cost for a product and its resale price to Canada,
Goods and Services Tax and/or the Harmonized Sales Tax excluded. Mark-up includes applicable
purchasing expense, internal handling and general and administrative expenses, plus profit.
3. The amount added to the cost of merchandise to arrive at the price at which it will be offered for sale.
This refers to an addition to a previously established selling price of goods for sale. (2010-01-11)
(majoration)
MATERIEL AND SERVICES TO MILITARY SPECIFICATIONS

1. Includes all materiel and services, including repair and overhaul, as well as research and development,
for which a military or other Department of National Defence (DND) specification or requirement is
included in procurement documentation. Also included in this category are materiel and services that are
not covered by DND or military specifications, but are of a significant concern to DND as to the
allocation of responsibilities annotated under this heading.
2. Includes the range of items covered by commercial or the Canadian General Standards Board standards
and specifications. It also includes those items or services, which are not specifically identified by
DND, in its procurement documentation, as requiring special military or other DND specifications or
requirements. (2010-01-11) (matériel et services assujettis aux spécifications militaires)
MATERIAL AND SERVICES TO NON-MILITARY SPECIFICATIONS

Includes the range of items covered by commercial or Canadian General Standards Board standards and
specifications. It also includes those items or services, which are not specifically identified by Department of
National Defence (DND), in its procurement documentation, as requiring special military or other DND
specifications or requirements. (2010-01-11) (matériel et services assujettis aux spécifications non
militaires)
MILESTONE PAYMENT
A method of making a progress payment, which relates to a measurable and/or defined item or work package
for which a price can be assigned with a good probability that such assigned price will turn out to be within
reasonable limits of predictive accuracy for the value of the work. (2010-01-11) (paiement d'étape)
MINISTER
The Minister of Public Works and Government Services. (2010-01-11) (Ministre)
MISREPRESENTATION
Any manifestation by words or other conduct by one person to another that, under the circumstances, amounts
to an assertion not in accordance with the facts. An untrue statement of fact, an incorrect or false representation.
It can be either fraudulent or innocent. It is fraudulent when it is made knowing that the same is false or without
belief in its truth. A party induced by fraudulent misrepresentation to enter into a contract may repudiate the
contract. Where a misrepresentation is an innocent one, it may be a ground for refusing specific performance to
the party who made the misrepresentation and may also be a ground for rescission of the contract. The
misrepresentation should, however, be a material one on which the other party relied. (2010-01-11) (fausse
déclaration)
MOBILE REPAIR PARTY

An individual or group of individuals who perform repair work away from a contractor's plant, generally at
client locations. (2010-01-11) (service mobile de réparation)
MODIFICATION
Equipment. An engineered alteration to an item of supply, which changes the design characteristics or
capabilities of the end item, major or subassembly component part, or accessory. Normally a modification is
made after an item of equipment is delivered, whereas a design change is made, before delivery during
production. (2010-01-11) (modification)
MONOPOLY
The ownership or control of so large a part of the market supply or output of a given commodity as to unduly
prevent or lessen competition in that commodity. (2010-01-11) (monopole)
MUTUAL CONSENT
A meeting of the minds on a specific subject, and a manifestation of intent of the parties to do or refrain from
doing some specific act or acts. (2010-01-11) (consentement mutuel)
NATIONAL INDIVIDUAL STANDING OFFER (NISO)

A standing offer issued for the use of a specific department or agency throughout Canada. NISOs are arranged
by PWGSC on receipt of a funded requisition. (2010-01-11) (offre à commandes individuelle et nationale
[OCIN])
NATIONAL MASTER STANDING OFFER (NMSO)

A standing offer issued for the use of many departments or agencies throughout Canada. NMSOs are arranged
by PWGSC without any requisitions from customer departments or agencies. (2010-01-11) (offre à
commandes principale et nationale [OCPN])
NATO STOCK NUMBER (NSN)

A 13-digit number; for example, 5305-21-111-3333 broken down as follows:
1. Digits 1-4; for example, 5305, the NATO supply classification, consisting of Group 53, which covers all
items of hardware, followed by the class within the group 05 (screws), 06 (bolts), etc., the whole being
known as the supply class.
2. Digits 5-6; for example, -21-, the NATO code for the National Codification Bureau that assigned the
stock number; for example, 00 U.S.A., 21 Canada, 14 France, 99 U.K., etc.
3. Digits 7-13; for example, 111-3333, the National Item Identification Number; non-significant, but
sequentially assigned by each National Codification Bureau to a unique item of supply.
4. Digits 5-13; for example, 21-111-3333, the NATO Item Identification Number, including both the
NATO code of the National Codification Bureau and its item identification number. The last 9 digits of
the number remain with the item throughout its life, even though the NATO supply classification may
change as a result of reclassification and consequent conversion of stock numbers; for example, 5305-
21- 111-2222converted to 2805-21-111-2222. (2010-01-11) (numéro de nomenclature de l'OTAN)
NEED-TO-KNOW
The need for someone to access and know information in order to perform his/her duties. (2010-01-11) (besoin
de connaître)
NEGOTIATION
The process of reaching agreement between two or more parties on the terms and conditions of a contract.
(2010-01-11) (négociation)
NON-COMPLIANCE
Failure to comply with a requirement. (2010-01-11) (non-conformité)
NO SUBSTITUTE
Description of a product by brand name or model number or by using a restrictive specification, with the
provision that a substitute product is not acceptable. (2010-01-11) (aucun produit de remplacement)
NON-RESIDENT CONTRACTOR
An individual not engaged in regular and continuous employment in Canada and who does not maintain a
permanent residence or office in Canada. This also refers to a partnership or a corporation not maintaining a
permanent office in Canada. (2010-01-11) (entrepreneur non résident)
NOTICE OF PROPOSED PROCUREMENT

A notice of an opportunity to participate in procurement. The NPP is published on the Government Electronic
Tendering Service (see the Buyandsell.gc.ca Tenders minisite) and includes general information, such as a
description of the requirement, and how solicitation documents can be obtained. (2013-06-01) (avis de projet
de marché [APM])
OFFER
A proposal made by one party to another to do something, usually accompanied by an expected acceptance,
counter-offer, return promise or act. The offer creates a power of acceptance permitting the offeree by accepting
the offer to transform the offeror's promise into a contractual obligation. An offer is an essential ingredient for
the formation of a contract. (2010-01-11) (offre)
OFFEROR
The party that makes the offer. (2010-01-11) (offrant)
OFFICE OF GREENING GOVERNMENT OPERATIONS (OGGO)

The Office of Greening Government Operations (OGGO) was created in April 2005, within Public Works and
Government Services Canada (PWGSC). OGGO's mandate is to accelerate the greening of the government's
operations by working closely with other federal departments, particularly Treasury Board Secretariat
(http://www.tbs-sct.gc.ca/index_e.asp) and Environment Canada (http://www.ec.gc.ca/default.asp?lang=En&n=FD9B0E51-1) .
(2010-01-11) (Bureau de l'écologisation des opérations gouvernementales {BEOG})
OFFICE OF SMALL AND MEDIUM ENTERPRISES (OSME)

As part of the government of Canada, supports the government agenda to provide best value for Canadians by:
1. encouraging and assisting small and medium enterprises to participate in the federal government
procurement process;
2. improving the links between supply and demand and influencing changes in government acquisitions;
and
3. conducting economic analysis of Government of Canada procurement and the private sector. (2010-01-
11) (Bureau des petites et moyennes enterprises [BPME])
OPERATING COST
The cost of operating, maintaining and repairing a product throughout its useful life, less its estimated residual
value at the time of retirement. (2010-01-11) (coût d'exploitation)
OPERATING LEASE
A lease in which the lessor does not transfer substantially all the benefits and risks incident to ownership of
property. (2010-01-11) (bail d'exploitation)
ORDER
Defence Production Act. A general or specific order, requirement, direction or prescription in writing made or
issued under this Act or a Regulation. (2010-01-11) (arrêté)
ORDER-IN-COUNCIL
A decision, instruction, order, proclamation, etc. issued under the authority of the Governor in Council. (2010-
01-11) (décret)
ORGANIZATION
From a security perspective, an organization is any institution, other than a Canadian government department,
agency or crown corporation, holding or referring to a security clearance. The majority are commercial
corporations, but other institutions are also included, such as university faculties, partnerships, consultants, and
other levels of government and their agencies. (2010-01-11) (organisation)
OVERCLAIM
A claim by the supplier for costs and profits in excess of the audited final amount, as determined by Audit and
Services Canada and/or sector/region verification. (2010-01-11) (réclamation en trop)
OVERHEAD COSTS
1. Indirect expenses or burden; one of many terms given to expenses, which are incurred in the production
of a commodity or the rendering of a service, but which cannot conveniently be measured by unit of
production or service. These expenses are sometimes classified as manufacturing overhead, selling and
distributive overhead, and general and administrative overhead.
2. Service contracts. Indirect costs associated with the operation of the contractor's business and includes,
unless otherwise stated, in a percentage factor that is applied to payroll cost. Salary bonuses may be
included as overhead costs, unless they are paid under profit-sharing schemes, in which case they will
be treated as a distribution of profit. (2010-01-11) (frais généraux)
OVERPAYMENT
A payment by Canada in excess of the audited final amount as determined by Audit Services Canada and/or
sector/region verification. (2010-01-11) (paiement en trop)
OVERTIME
Time worked by a contractor's employee in excess of the employee's normal working day or working week.
(2010-01-11) (heures supplémentaires)
OVERTIME PREMIUM
The difference between the employee's regular rate of pay and the higher rate paid for overtime. (2010-01-11)
(prime d'heures supplémentaires)
OVERTIME PREMIUM COSTS

The amount of overtime premium and any profit thereon. (2010-01-11) (frais de rémunération des heures
supplémentaires)
PART FILE
A main or extract file is subdivided into part files when more than one solicitation is issued, resulting in
separate contracts. Each part file may only have one active solicitation in progress. Part files must be created
when more than one solicitation is required under a main or extract file. (2010-01-11) (dossier partiel)
PATENT
A grant of right to exclude others from making, using or selling one's invention and includes the right to license
others to make, use or sell it. A grant from the government conveying and securing for an inventor the exclusive
right to make, use and sell an invention for a specific number of years. (2010-01-11) (brevet)
PAYMENT BOND
1. A bond given by a contractor to guarantee the payment for labour to be provided or materials to be
supplied in connection with a contract awarded to that contractor.
2. A bond given to ensure that the subcontractor, providing labour or supplying materials to a contractor,
will be paid their proper charges up to the value of the bond.
3. A type of surety bond. (2010-01-11) (cautionnement de paiement)
PAYROLL COSTS
Direct salaries paid plus costs associated with direct salaries; for example, provision for statutory holidays,
vacations with pay, the contractor's contribution for unemployment insurance and workmen's compensation,
health and medical insurance, group life insurance and pension. (2010-01-11) (coût de rémunération)
PER DIEM RATES

1. A latin phrase meaning “by the day”.
2. Service contracts. A time rate whereby the contractor is paid a fixed rate inclusive of payroll and
overhead costs and profit, for each normal working day as defined in the contract. (2010-01-11)
(honoraires quotidiens)
PERFORMANCE BOND
Bond given to guarantee the performance or completion of a contract in accordance with its terms and
conditions. (2010-01-11) (cautionnement d'exécution)
PERFORMANCE (IN THE CONTEXT OF A CONTRACT)

The fulfillment or accomplishment of that which is required by a contract or under a condition. (2010-01-11)
(exécution [dans le cadre d'un contrat])
PERFORMANCE (IN THE CONTEXT OF ADVANCE PAYMENTS)

The funds received will be used solely for the purpose of the contract;
1. The amount of the payment is ascertained or ascertainable under the contract;
2. The contractor is not in default of its obligations under the contract; and
3. The payment is related to an identifiable part of the contractual undertakings. (2010-01-11) (exécution
[dans le cadre de paiements anticipés])
PERFORMANCE (IN THE CONTEXT OF PROGRESS PAYMENTS)

1. All authorizations required under the contract have been obtained; the claim is consistent with the
progress of the work and is in accordance with the contract.
2. Indirect costs have been paid for or accrued in the accounts.
3. Direct materials and work under subcontract have been received, accepted and either paid for or accrued
in the accounts, following receipt of invoice from the contractor/subcontractor, and have been or will be
used exclusively for the purpose of the contract.
4. All direct labour costs have been paid for or accrued in the accounts and all such costs were incurred
exclusively for the purpose of the contract.
5. All other direct costs have been paid for or accrued in the accounts, following receipt of applicable
invoice or expense voucher and that all such costs were incurred exclusively for the purpose of the
contract.
6. No liens, encumbrances, charges or other claims exist against the work, except those which may arise
by operation of law, such as a lien in the nature of an unpaid contractor's lien and in respect of which an
progress payment and/or advance payment has been or will be made by Canada. (2010-01-11)
(exécution [dans le cadre de paiements progressifs])
PERSONNEL SECURITY CLEARANCE

The security screening of persons who are likely to have access, on a need-to-know basis, to classified
information, assets or controlled areas in order to provide a clearance for undertaking the work. (2010-01-11)
(attestation de sécurité)
PERSONNEL SECURITY SCREENING

The administrative process used to examine a personnel security screening, that has been granted by another
government organization, in order to determine its applicability and acceptance for the purpose of approval by
the Canadian Industrial Security Directorate, for access to classified and/or protected information and assets
provided to or produced by private organizations under contract to the Government of Canada. (2010-01-11)
(enquête de sécurité sur le personnel)
PHYSICAL SECURITY
The use of physical safeguards to prevent and delay unauthorized access to assets, detect attempted and actual
unauthorized access and activate appropriate responses. (2010-01-11) (sécurité physique)
POINT RATING
An evaluation procedure using values assigned to criteria to rate suppliers. (2010-01-11) (cotation numérique)
POLICY ON GREEN PROCUREMENT

A policy designed to ensure that the government cost effectively procures, operates and disposes of its assets in
a manner that protects the environment and supports sustainable development objectives. (2010-01-11)
(Politique d'achats écologiques)
PRICE
1. The consideration given in exchange or sale of anything.
2. Defence Production Act. Includes rate or charge for any service. (2010-01-11) (prix)
PRICE AND AVAILABILITY (P&A) ENQUIRY

A request to the trade for information, which is needed by PWGSC or a client for program planning or
budgetary purposes. P&A enquiries must clearly indicate that the request is not a bid solicitation. (2010-01-11)
(demande de prix et disponibilité)
PROCUREMENT
The process of obtaining goods and services that includes the determination of requirements and acquisition
from a supply system or by purchase from the trade. The procurement process has four phases:
a. Pre-contractual phase.Includes activities related to requirement definition and procurement planning.
b. Contracting phase. Includes all activities from bid solicitation to contract award.
c. Contract administration phase. Includes activities such as progress monitoring, delivery follow-up,
payment action, etc.
d. Post-contractual phase includes file final action (for example, client satisfaction, contractor agreement to
final claim, final contract amendment, completion of financial audits, proof of delivery, return of
performance bonds) and close out (for example, completeness and accuracy of file documentation and
adherence to file presentation standards). (2010-01-11) (approvisionnement)
PROCUREMENT BUSINESS NUMBER (PBN)

A unique identifier that is assigned to each supplier when they register in the Supplier Registration Information
service, on the Buying and Selling Web site. It is based on the nine-digit Business Number that Canada Revenue
Agency assigns to a supplier for tax matters related to business in Canada. (2010- 08-16) (numéro d'entreprise –
approvisionnement [NEA])
PROCUREMENT OMBUDSMAN
An independent organization with a government-wide mandate, which is defined in the Federal Accountability
Act (http://www.faa-lfi.gc.ca/index-eng.asp) . Its overall objective is to ensure the fairness, openness and transparency
of government procurement. (2010-01-11) (ombudsman de l'approvisionnement)
PROCUREMENT REVIEW COMMITTEE (PRC)

The PRC carries out a detailed review of procurements strategies for goods and services valued between
$2,000,000 and $100,000,000 for potential socio-economic benefits. The reviews are conducted within
parameters that are fully consistent with the Treasury Board Policy on procurement review and subject to
Canada's national commitments under the Agreement on Internal Trade and the Canadian Free Trade
Agreement, plus the international commitments under the World Trade Organization Agreement on Government
Procurement, Canada-European Union Comprehensive Economic and Trade Agreement and the North
American Free Trade Agreement, and other international trade rights and obligations. While the membership
may vary slightly, there is core representation from the client department, the contracting authority, Treasury
Board Secretariat, National Research Council, Industry Canada, Atlantic Canada Opportunities Agency,
Western Economic Diversification Canada, Canada Economic Development (for Quebec Regions), Department
of Indian and Northern Affairs, Environment Canada, Department of National Defence, International Trade
Canada, and Transport Canada. (2017-09-21) (Comité d'examen des acquisitions [CEA])
PROCUREMENT STRATEGY FOR ABORIGINAL BUSINESS (PSAB)

Consists of measures intended to increase the number of Aboriginal firms competing for and winning federal
contracts. Particularly, if it includes measures to better inform Aboriginal businesses about government
procurement needs and to better inform government procurement officers about the capacity of Aboriginal
businesses. The strategy is consistent with the government's general policy on procurement, which emphasizes
competition and value for money. (2010-01-11) (Stratégie d'approvisionnement auprès des entreprises
autochtones [SAEA])
PRODUCT QUALITY MANAGEMENT

Process applied to ensure the required quality of goods and services. The product quality management (PQM)
refers to all considerations, which are undertaken within the procurement process, to provide clients with
quality goods and services that conform to the stated requirements. Inherent to PQM are such actions as proper
requirements definition; judicious sourcing, as applicable; thorough supplier evaluation; and the inclusion of
proper quality related bid solicitation and contract clauses. The concept of PQM embodies quality assurance,
quality control and inspection. See quality assurance, quality control, inspection, and quality. (2010-01-11)
(gestion de la qualité du produit)
PRODUCTION
See manufacturing. (2010-01-11) (production)
PRODUCTION ASSETS
Covers special production tooling, special test equipment, Department of National Defence-loaned equipment,
United States government property, and any other government property for which Public Works and
Government Services Canada has been specifically or directly charged with assets management responsibility.
(2010-01-11) (biens de production)
PRODUCTIVITY
The ratio of some output to some input. A measure of how well resources are combined and utilized to achieve
a particular desirable result. Productivity ratios may be measured in one of the following three ways:
a. Total Output. Total Input.
b. Total Results Achieved. Total Resources Consumed.
c. Effectiveness. Efficiency.
The concept of productivity recognizes the interplay between various factors in the workplace. The output or
results achieved may be related to different inputs or resources in the form of various productivity ratios; for
example, output per labour hour, output per unit of material (as in kilometers driven per liter of gas) or output
per unit of capital. Each of these productivity ratios may be influenced by a combination of factors, such as
quality and availability of materials, scale of operations, rate of capacity utilization, availability and throughput
capacity of capital equipment, attitude and skill level of the work force, motivation and effectiveness of the
management. The manner in which these factors interrelate will have a bearing on the resulting productivity
ratio. Productivity improvements or gains are generally realized in terms of increased revenue or profit, better
quality or performance, or lower prices. (2010-01-11) (productivité)
PRODUCT, RESOURCE, OPERATING AND CONTINGENCY (PROC)

The cost factors associated with the total product life cycle:
1. Product costs. Costs paid for the supply of goods to a specified delivery point.
2. Resource costs. The total government resource cost of acquiring, distributing and accounting for the
goods.
3. Operating costs. The costs of operating, maintaining and repairing the goods and the depreciation
incurred.
4. Contingency costs. Those costs incurred by not having the goods available when they are required.
PROC analysis is used when best value for the money spent on the acquisition over its useful life is
required. (2010-01-11) (coût du PREI [produit, des ressources, d'exploitation et des imprévus])
PROFIT
1. Generaly the benefit or advantage in money or in money's worth.
2. Income tax law. The surplus in the taxation period by which the receipts from a trade or business exceed
the expenditures necessary for the purpose of earning those receipts.
3. A general term for the excess of revenue, proceeds or selling price over related costs.
4. Net income. (2010-01-11) (profit)
PROGRESS PAYMENT
A payment made by or on behalf of Canada under the contract after the performance of the part of the contract
in respect of which the payment is made but before the performance of the whole contract. (2010-01-11)
(paiement progressif)
PROPOSAL
An offer, submitted in response to a request from a contracting authority, which constitutes a solution to the
problem, requirement or objective in the request. (2010-01-11) (proposition)
PROPRIETARY
1. Noun: a proprietor or owner, one who has the exclusive title to a thing; one who possesses or holds the
title to a thing in his own right.
2. Adjective: belonging to ownership; owned by a particular person; belonging or pertaining to a

proprietor; relating to a certain owner or proprietor. (2010-01-11) (propriétaire)
PROTECTED INFORMATION
Information related to other than the national interest that may qualify for an exemption or exclusion under the
Access to Information Actor Privacy Act. (2010-01-11) (renseignements de nature protégée)
PROTOTYPE
Includes any item designated as such in the contract, including models, patterns and samples. (2010-01-11)
(prototype)
PUBLIC NOTICE
An announcement on an approved electronic information service, in one or more newspapers, or by means of
some other accepted media. (2010-01-11) (avis public)
PUBLIC PROPERTY
Financial Administration Act. All property, other than money, belonging to Her Majesty in right of Canada.
(2010-01-11) (biens publics)
PURCHASE DESCRIPTION
A statement of requirements to identify and describe a particular product or service, but which may be less
detailed than a specification. The description includes sufficient data to enable the supply and evaluation of the
item either by means of reference to a specification or standard, or by the inclusion of critical performance data.
(2010-01-11) (description d'achat)
PURCHASE ORDER
A purchaser's written offer to a supplier, formally stating all terms and conditions of a proposed transaction.
(2010-01-11) (bon de commande)
PURCHASING
The buying process within the procurement cycle. (2010-01-11) (achat)
QUALIFICATION PROGRAM
The entire process by which products are obtained from suppliers, examined and tested and then identified on a
qualified products list. The qualification process includes an evaluation of the manufacturer's facilities and
capabilities to meet requirements on a continuing basis. (2010-01-11) (programme d'homologation)
QUALIFIED PRODUCT
A product manufactured under controlled and substantially unchanged conditions, meeting the requirements and
procedures to enable that product to be listed in the applicable qualified products list. (2010-01-11) (produit
homologué)
QUALIFIED PRODUCTS LIST (QPL)

A listing of products qualified as conforming to the requirements of standards or specifications by the
appropriate panel. A QPL identifies the qualifying authority and includes the appropriate product identification
and reference data together with the name of the supplier of the qualified product. (2010-01-11) (liste des
produits homologués [LPH])
QUALIFYING AUTHORITY
The agency or organization responsible for the maintenance of a listing program, including the development and
implementation of policies and procedures, and is responsible for the accuracy and integrity of listings. (2010-
01-11) (autorité d'homologation)
QUALITY
The totality of features and characteristics of a product or service that bear on its ability to satisfy a given need.
(2010-01-11) (qualité)
QUALITY ASSURANCE
A system of activities whose purpose is to provide assurance that the quality control is in fact being done
effectively. For a specific product or service, this involves verification, audits and the evaluation of the quality
factors that affect the specification, production, inspection and distribution. See government quality assurance.
(2010-01-11) (assurance de la qualité)
QUALITY AUDIT
The monitoring of quality levels at any stage to provide information for management. (2010-01-11)
(vérification de la qualité)
QUALITY CONTROL
This refers to a range of activities, to ensure and verify that the specific quality of the product or service has
been met. (2010-01-11) (contrôle de la qualité)
QUALITY OF DESIGN
The value inherent in the design; a measure of the excellence of the design in relation to the client's
requirements. (2010-01-11) (qualité technique)
QUOTATION
A bid submitted in response to a Request for Quotation from a contracting authority. (2010-01-11)
(présentation de prix)
REASONABLE
What is fair, just, suitable and proper in the given circumstances of a case, that which is fit and appropriate to
the end in view, and that which is according to reason, not immoderate or excessive. (2010-01-11)
(raisonnable)
RECEIVER MANAGER
See trustee in bankruptcy. (2010-01-11) (séquestre-gérant)
RECEIVERSHIP
Legal or equitable proceeding in which a receiver is appointed for an insolvent corporation, partnership or
individual. The state or condition of a corporation, partnership or individual over whom a receiver has been
appointed for protection of its assets and for ultimate sale and distribution to creditors. (2010-01-11) (mise sous
séquestre)
REGIONAL INDIVIDUAL STANDING OFFER (RISO)
A standing offer issued for the use of a specific department or agency within a specific geographic area. RISOs
are arranged by PWGSC on receipt of a funded requisition. (2010-01-11) (offre à commandes individuelle et
régionale [OCIR])
REGIONAL MASTER STANDING OFFER (RMSO)

A standing offer issued for the use of many departments or agencies within a specific geographic area. RMSOs
are arranged by PWGSC without any requisitions from customer departments or agencies. (2010-01-11) (offre
à commandes principale et régionale [OCPR])
REGISTERED QUALITY SYSTEMS LIST

Listing of suppliers that have had their quality system audited by an approved auditor, against the appropriate
quality standard, are found to meet all of the criteria of the standard and are registered by the applicable
certifying agency. (2010-01-11) (liste des systèmes d'assurance de la qualité inscrits)
RELIABILITY
The measures expressed of the ability of a product to function successfully when required, for the period
required, in the specified environment. (2010-01-11) (fiabilité)
RELIABILITY STATUS
Indicates successful completion of a reliability check; allows regular access to government assets and, with a
need-to-know, to protected information. (2009-12-15) (cote de fiabilité)
REMEDY
A right given to a party by law or by contract which that may exercise upon a default by the other contracting
party, or upon the commission of a wrong by another party. It means any remedial right to which an aggrieved
party is entitled with or without resort to a tribunal. (2010-01-11) (recours)
REMISSION
1. Exemption from payment of customs duties and excise taxes, which are ordinarily payable on goods or
materiel imported into Canada.
2. A partial or total refund or the non-payment of taxes, which otherwise would be payable and authorized
by order-in-council. (2010-01-11) (remise)
RENEGOTIATION
A re-determination of agreed contract or pricing terms, due to changed requirements or conditions, or in
accordance with a previous agreement. Some contracts provide for renegotiation at a stated time or under stated
conditions. (2010-01-11) (révision du contrat)
REPAIR
To restore (something damaged or broken) to good condition or working order. (2010-01-11) (réparation)
REPAIR AND OVERHAUL

The repair of an item of equipment to return it to serviceable condition; overhaul may or may not be coincident
with repair. Repair normally involves the correction of specific defects only, whereas overhaul will entail
replacement of either worn and damaged parts, or parts for which service life has expired. Overhaul is normally
affected only after expiry of service life due to hours of use or elapsed time. (2010-01-11) (réparation et
révision)
REPRESENTATION
1. General. A statement made expressly or by implication such as by conduct.
2. Contract. In the law of contracts, it is a statement made by one of the parties of the contract to the other,
before or at the time of entering into the contract, or of some matter relating to the contract. (2010-01-
11) (présentation)
REQUEST FOR INFORMATION (RFI)

An RFI or Letter of Interest is not open for bidding. The buyer is interested in receiving feedback from suppliers
and may re-open or re-issue an opportunity as an open tender at a later day. RFIs may include attached
documents. (2010-01-11) (demande de renseignements)
REQUEST FOR PROPOSAL (RFP)

A form of bid solicitation used where the selection of a supplier cannot be made solely on the basis of the
lowest price. An RFP is used to procure the most cost-effective solution based upon evaluation criteria
identified in the RFP. See 4.10.15. (2014-09-25) (demande de propositions)
REQUEST FOR QUOTATION (RFQ)

Solicitation document used to solicit bids for low dollar value requirements below $25,000.00, including all
applicable taxes, from one or more suppliers. It is a request to bidders, which is evaluated with the objective of
accepting the lowest-priced responsive quotation. See 4.10.1. (2010-01-11) (demande de prix)
REQUEST FOR STANDING OFFER (RFSO)

A solicitation document used to solicit standing offers. It must clearly state the requirement, the evaluation
method and selection criteria, the call-up procedures, the ranking methodologies, whenever applicable, to be
used for making call-ups against the authorized standing offer(s), and all terms and conditions applicable to the
contract that is brought into effect, as a result of any call-up. (2010-01-11) (demande d'offres à commandes
[DOC])
REQUEST FOR SUPPLY ARRANGEMENT (RFSA)

A procurement tool established by PWGSC for use by clients that allows buyers to solicit bids from a pool of
pre-qualified suppliers for specific requirements. The intent is to establish a framework to permit expeditious
processing of individual bid solicitations which result in legally binding contracts for the goods and services
described in those bid solicitations. (2013-04-25) (demande d’arrangement en matière d’approvisionnement
[DAMA])
REQUISITION
A request to obtain materiel or services and authority to commit funds to cover the purchase. (2010-01-11)
(demande)
RESCISSION
Contract. To abrogate, annul, void or cancel a contract. The right of rescission is the right to cancel (rescind) a
contract upon the occurrence of certain kinds of default by the other contracting party (like misrepresentation,
duress, undue influence). To declare a contract void in its inception and to put an end to it as though it never
were. It is limited to contracts where it is possible to rescind the contract and substantially to restore all parties
to their respective positions before the contract was entered into. (2010-01-11) (annulation)
RESPONSIBILITY
The state of being answerable for an obligation and includes judgment, skill, ability and capacity. The
obligation to answer for an act done, and to repair or otherwise make restitution for any injury it may have
caused. (2010-01-11) (responsabilité)
RESPONSIVE BID
1. A bid, tender, proposal or quotation that meets all the mandatory requirements stipulated in the
solicitation document.
2. Synonymous with valid bid. (2010-01-11) (soumission recevable)
ROYALTIES
Usage-based payments made by one party (the licensee) to another (the licensor) for ongoing use of an asset, for
example an intellectual property right. (2010-01-11) (redevances)
SALE
1. A transfer of a property from one person to another for a price in money. A sale of goods is different
from an exchange or barter where no funds are involved. In order to determine at what point property in
the goods sold rests in the purchaser, the terms of the contract have to be considered to ascertain in
whom the property is vested. The property may pass at once or at a future time contingent on the
fulfillment of some condition.
2. Includes consignment or other disposition of materials and the supplying of any service. (2010-01-11)
(vente)
SALVAGE
Accounting. That portion of the residual value of an asset representing the value of parts reclaimed for future
use after retirement of the asset. (2010-01-11) (récupération)
SAMPLE
1. General. A relatively small quantity of material, or an individual object, where the quantity of the mass,
group, bulk, etc. that it represents, may be inferred. A small quantity presented or sold to buyers as a
specimen of goods offered for sale.
2. When goods are sold by sample, three conditions are implied in the sale:
a. the bulk must correspond with the sample in quality;
b. the buyer must have a reasonable opportunity of comparing the bulk with the sample;
c. the goods must be free from any defect rendering them unmerchantable, which would not be
apparent on reasonable examination of the sample. (2010-01-11) (échantillon)
SCHEDULED OVERTIME
Overtime experienced by a contractor through their usual business operations. Any resulting overtime premium
costs are usually included in the contractor's overhead account. (2010-01-11) (heures supplémentaires
prévues)
SEAL
See under seal. (2010-01-11) (sceau)
SECRET
The level of classification that applies to information or assets when compromise could reasonably be expected
to cause serious injury to the national interest. (2010-01-11) (secret)
SECURITY DEPOSIT
The deposit by the bidder/contractor of securities, including government guaranteed bonds, bills of exchange
and irrevocable standby letters of credit, which the contracting authority may convert to complete the
bidder's/contractor's obligations. (2010-01-11) (dépôt de garantie)
SECURITY REQUIREMENTS CHECKLIST (SRCL)

A form used to identify security requirements associated with a contract, which contains protected or classified
security requirements. (2010-01-11) (Liste de vérification des exigences relatives à la sécurité [LVERS])
SELECT
A procurement tool used to identify qualified firms and individuals for low dollar value construction,
maintenance and real property consulting (architectural and engineering services). (2010-01-11) (SELECT)
SELLING PRICE
This is the net selling price to the buyer after all discounts. It includes all applicable provincial sales taxes,
Goods and Services Tax/Harmonized Sales Tax, excise taxes and tariffs. (2010-01-11) (prix de vente)
SET-ASIDE PROGRAM FOR ABORIGINAL BUSINESS

Establishes two types of set-asides: mandatory and voluntary. Mandatory set-asides apply to procurements over
$5,000 for which Aboriginal populations are the primary recipients of the goods, services, or construction to be
contracted. Voluntary set-asides apply to all other procurements designated by client departments as reserved for
Aboriginal business. (2010-01-11) (Programme des marchés réservés aux entreprises autochtones)
SITE VISIT
A meeting held on site and conducted by either PWGSC or the client to provide suppliers with an opportunity to
view and assess aspects of the work that cannot be adequately described in performance specifications or the
statement of work. (2010-01-11) (visite des lieux)
SOLE SOURCE
The supply of a good or service that is available from only one supplier. A sole source contract implies that
there is only one supplier that can fulfill the requirement and that any attempt to obtain bids would only result in
one supplier being able to meet the need. (2010-01-11) (fournisseur unique)
SPECIAL PRODUCTION TOOLING

Tools such as jigs, dies, fixtures, moulds, patterns, taps, gauges and other like items, which are of such a
specialized nature that, without substantial modification or alteration, their use is peculiar to the production of
supplies or the parts thereof, which are required by Canada. (2010-01-11) (outillage spécial de production)
SPECIAL TEST EQUIPMENT
Either single or multipurpose integrated test units engineered, designed, fabricated or modified to meet the test
requirements of the specifications peculiar to the end items of equipment, which are required by Canada. Also
included are associated computer software programs. The term "Special Test Equipment" does not include:
special production tooling; buildings and non-severable structures (except foundations and similar
improvements necessary for the installation of special test equipment); and test equipment loaned from a client's
inventory. (2010-01-11) (matériel spécial d'essai)
SPECIFICATION
A statement of requirements to be satisfied for materiel, a product or service, including the identification of test
methods, or the procedures that will determine whether the requirements have been met. (2010-01-11)
(spécification)
SPLIT CONTRACT
The practice of unnecessarily dividing an aggregate requirement into a number of smaller contracts, to avoid
controls or contract approval authorities. (2010-01-11) (fractionnement d'un contrat)
STANDARD
1. A formal specification, for recurring major interests, utilizing the consensus process, and published by a
recognized standards-issuing agency. In particular, a Canadian General Standards Board (CGSB)
standard is one developed in accordance with the procedures set out in the CGSB manual, Policy and
Procedures Preparation of Standards.
2. A formal statement of requirements established by authority, custom or general consent of those

affected, and intended for general recurrent use. Normally, a standard is developed through a consensus
process by a committee widely representative of major interests and is published by an accredited
standards-writing agency, as determined by the Standards Council of Canada or recognized standards-
issuing agency. (2010-01-11) (norme)
STANDARD PROCUREMENT
A standard procurement has the characteristics of judgment, review, and assessment. The procurement is based
on the process of finding a solution to a requirement using existing technology and knowledge. Evaluation
methods have to be defined, and may use pre-established strategies. The procurement process is established and
understood though it can be complicated (many details or factors). Control is within the department’s domain of
authority. Contract administration is predictable and established. There may be a medium level of risk. (2011-
10-04) (approvisionnement normalisé)
STANDING OFFER
An offer from a supplier to provide goods and/or services to clients at prearranged prices or pricing basis and
under set terms and conditions for a specified period on an as-and-when requested basis. A separate contract is
entered into each time a call-up is made against a standing offer. When a call-up is made, the terms and
conditions are already in place and acceptance by Canada if the supplier's offer is unconditional. Canada's
liability is limited to the actual value of the call-ups made within the period specified in the standing offer.
(2010-01-11) (offre à commandes)
STANDING OFFER AND CALL-UP AUTHORITY (SOCA)

A document issued by the standing offer authority that serves two primary purposes:
a. notification to the offeror, that authority to call-up against a standing offer has been given to specific
authorized users in respect of its standing offer; and
b. notification to clients, that, in respect to a specific standing offer, authority to call-up against the said
standing offer has been granted to them as provided in the standing offer. (2010-01-11) (autorisation de
passer des commandes subséquentes à une offre à commandes [APCSOC])
STANDING OFFER AUTHORITY

Means the person designated as such in the standing offer, or by notice to the offeror, to act as the representative
of Canada in the management of the standing offer. The Standing Offer Authority will issue a document called
"Standing Offer and Call-up Authority" to authorize identified users to make call-ups against the standing offer
and to notify the offeror that authority to make call-ups against the standing offer has been given to identified
users. (2010-01-11) (responsable de l'offre à commandes)
STORAGE
A function of warehousing which involves the receipt of an item, putting it away for safekeeping and
subsequent retrieval, when required for use, sale or disposal. (2010-01-11) (entreposage)
SUBCONTRACTOR
One who takes portion of a contract from principal contractor or another subcontractor. One who takes from the
principal or prime contractor a specific part of the work undertaken by the principal or prime contractor. (2010-
01-11) (sous-traitant)
SUPPLY
The operations normally involved in furnishing, providing, affording or distributing items of supply to a user to
satisfy stated requirements. The function includes all actions from the initial determination of requirements, as
to kind and quality through testing, standardization, adoption, modification, procurement, acceptance, receipt,
storage, issue, maintenance, distribution, salvage, reissue, disposal, accountability, responsibility and stock
control. (2010-01-11) (approvisionnement)
SUPPLY ARRANGEMENT
A non-binding agreement between PWGSC and a supplier who is pre-qualified to provide goods or services to
the Government of Canada. (2010-01-11) (arrangement en matière d'approvisionnement)
SUPPLY ARRANGEMENT AUTHORITY

Person designated as such in the supply arrangement, or by notice to the supplier, to act as the representative of
Canada in the management of the supply arrangement. (2010-01-11) (responsable de l'arrangement en
matière d'approvisionnement)
SUPPLY TRANSFER ORDER

A document, which is used when goods and services are to be provided by a provincial government. (2010-01-
11) (demande de transfert de biens et de services)
SURETY BOND
A contractual arrangement between the surety, the principal (contractor) and the obligee (Canada) whereby the
surety agrees to protect the obligee if the principal defaults in performing the principal's contractual obligations.
The bond is the instrument that binds the surety. (2010-01-11) (cautionnement)
SURPLUS MATERIAL
1. Materials, including raw materials, parts and equipment, purchased or manufactured by a contractor
specifically for a contract, but which remain unused after completion of the contract.
2. Materials purchased or manufactured by the contractor specifically for a Crown contract, but not used
and left over after completion of the contract. (2010-01-11) (matériel excédentaire)
TAKE-OUT RATE
The negotiated rate applied to laid-down cost for the recovery of overhead costs applicable to resale business,
when the resale business does not account for all functions of the particular cost centre. The resulting rate will
be somewhat less than that, which applies to other work, using the cost centre facilities. A take-out rate is
normally used only as an expedient, when the contractor does not have sufficient resale business to warrant a
separate burden or cost centre. (2010-01-11) (taux de recouvrement)
TARGET INCENTIVE FEE

Contract. A contract where a bonus is paid on the basis of agreed sharing of savings relative to the target price.
This may also provide for reduction in profits where target cost is exceeded. (2010-01-11) (tarif cible avec
prime d'encouragement)
TARGET PRICE
Fixed fee and incentive fee formula. A method of pricing in which the contractor is paid costs reasonably and
properly incurred, as determined by audit, together with an agreed upon fixed fee, as profit supplemented by an
incentive fee, which will be paid to the contractor on any savings achieved between a prescribed target cost and
the actual cost, as established by audit. A target price contract may also include a provision for a ceiling price.
(2010-01-11) (prix visé)
TARIFF
A published schedule showing the rates, charges, classification, rules, regulations and other provisions
applicable to transportation and incidental services. (2010-01-11) (tarif)
TASK AUTHORIZATION
A task authorization (TA) is a structured administrative tool that enables PWGSC or a client to authorize work
by a contractor on an "as and when requested" basis in accordance with the conditions of the contract. TAs are
not individual contracts. (2010-12-15) (autorisation de tâches)
TASK AUTHORIZATION CONTRACTS

A contract with task authorizations is a method of supply for services under which all of the work or a portion
of the work will be performed on an “as and when requested basis” through predetermined conditions including
an administrative process involving task authorizations. Contracts with TAs are used in service contracting
situations when there is a defined need by a client to rapidly have access to one or more categories of service(s)
that are expected to be needed on a repetitive basis during the period of the contract. (2010-12-15) (contrats
avec autorisation de tâches)
TECHNICAL AUTHORITY
The individual responsible for providing information, guidance and advice on the technical aspect of a product.
(2010-01-11) (responsable technique)
TELEPHONE BUY
A purchase whereby the telephone is used to solicit bids for requirements valued up to $25,000, including all
applicable taxes, and whereby a contract is entered into over the telephone and confirmed in writing. (2010-01-
11) (achat par téléphone)
TEMPORARY HELP SERVICES

Services provided under contract to the government for assignments in which employees of a supplier work
under the direction of public servants. (2010-01-11) (services d'aide temporaire)
TENDER
A proposal, bid or offer that is submitted in response to an Invitation to Tender, Request for Proposal, or
Request for Quotation from a contracting authority. (2010-01-11) (offre)
TERM
1. Contract. Word, phrase or condition in a contract which relates to a particular matter.
2. A fixed and definite period, a prescribed duration. (2010-01-11) (condition)
TERMINATION FOR DEFAULT

Termination of a contract or part of a contract as a result of a breach of an obligation. (2010-01-11) (résiliation
pour manquement)
TESTING
An element of inspection. Generally denotes the determination by technical means of the properties or elements
of supplies or components thereof, and involves the application of established scientific principles and
procedures. (2010-01-11) (essai)
TEST METHODS
Detailed technical descriptions of procedures, according to which conformance to the requirements stated in
specifications and standards, is determined. (2010-01-11) (méthodes d'essai)
THIRD PARTY LIABILITY

Insurance. That type of insurance protection that indemnifies one from liability to third persons, as opposed to
insurance coverage for losses sustained by the insured. (2010-01-11) (responsabilité civile)
TIME PAYMENT
1. A method of making progress payments that provides for specified payments to become due at the times
specified in the contract, subject to certification by the inspection and contracting authorities that
progress of the work conforms to schedule.
2. The method of making progress payments based on physical progress of the work on a monthly basis, as
determined by the inspection and contracting authorities without any set monthly goals. (2010-01-11)
(paiement à terme)
TITLE
The formal right of ownership of property, including right of possession. (2010-01-11) (titre)
TOP SECRET
The level of classification that applies to information or assets when compromise could reasonably be expected
to cause exceptionally grave injury to the national interest. (2010-01-11) (très secret)
TRADEMARK
A distinctive mark of authenticity, through which the products of a particular manufacturer may be
distinguished from those of others. A distinctive mark, motto, device, or emblem which a manufacturer stamps,
prints, or otherwise affixes to the goods he produces, so that they may be identified in the market, and their
origin be vouched for. (2010-01-11) (marque déposée)
TRANSFER PRICE
The price charged to a seller to Canada by another division, subsidiary or affiliate of the seller under common
ownership control, or otherwise not dealing at arm's length with the seller to Canada. (2010-01-11) (prix de
transfert)
TRUSTEE IN BANKRUPTCY
A person licensed under the terms of the Bankruptcy Act appointed by court to take possession of the assets of a
bankrupt debtor. A trustee becomes in effect a temporary manager of a business who may carry on the business,
or alternatively sell the assets. In managing the business, a trustee may be referred to as the receiver manager.
(2010-01-11) (syndic de faillite)
UNDER SEAL
Authenticated by a seal; executed by the affixing of a seal. (2010-01-11) (scellé)
UNSCHEDULED OVERTIME
Any unexpected additional overtime experienced on Crown contracts. Payment for unscheduled overtime
requires an amendment to the contract, as it is not included in the overhead rate, but is usually directly charged
after the contract has been signed. (2010-01-11) (heures supplémentaires imprévues)
U.S. DEFENCE PRIORITIES AND ALLOCATIONS SYSTEM (DPAS)

A system in existence in the United States to ensure the timely flow of goods, materials and services and the
prompt delivery of defence and defence-related needs. (2010-01-11) (Système américain régissant les
priorités et les attributions en matière de défense [DPAS])
V
VALUE FOR DUTY

1. Customs. The price in Canadian currency on which the appropriate rate of customs duty is applicable
for goods imported into Canada.
2. Customs Act. The value of the article, as it would be determined for the purpose of calculating an ad
valorem duty upon the importation of such article into Canada, under the laws relating to the customs
and the customs tariff, whether such article is in fact subject to ad valorem or other duty or not. (2010-
01-11) (valeur imposable)
VERIFICATION OF TIME FOR ACCEPTABILITY

An examination of the contractor's records to: determine the actual time charged for carrying out the work in
accordance with the terms of the contract; ensure that the amount of time thus determined was required in the
performance of the work under the contract; and ascertain that the time charged reflects the performance of the
work under the contract in an efficient and economical manner. (2010-01-11) (contrôle du temps en vue de
l'acceptation)
WAREHOUSING
The performance of those physical and administrative functions incidental to and required in the conduct of the
storage activity, that is, receipt, sorting, identification, inspection, preservation, putting away, safekeeping,
retrieval for issue and preparation for shipment of materiel. (2010-01-11) (entreposage)
WARRANTY
1. A statement or representation made by seller of goods as part of a contract of sale, having reference to
character, quality, or title of goods, and by which seller promises or undertakes to insure that certain
facts are as he represents them.
2. Express warranty. The seller has made an express warranty when making some specific statement
concerning the nature, quality, character, use or purpose of the goods, which induces the buyer to make
its purchase of them, and the seller intends to the buyer to rely on its statement.
3. Implied warranty. A promise arising by operation of law that something that is sold will be
merchantable, and fit for the purpose for which the seller knows that it is required. A contract to do
certain work, such as a building contract, contains within itself an implied warranty that the work shall
be done in a workman-like manner.
4. Breach of warranty. The consequences that flow from a breach of warranty entitle the innocent party to
damages, while a breach of a condition may entitle the innocent party to rescind the contract.
5. Full warranty. A warranty, which covers full performance, generally both labour and materials. Under a
full warranty, the warrantor must remedy the product within a reasonable time, and without charge, after
notice of a defect or malfunction.
6. Limited warranty. A written warranty, which fails to meet one or more of the minimum standards for a
full warranty. (2010-01-11) (garantie)
WHOLESALER
This is a merchant middleman who sells chiefly to retailers or industrial, institutional and commercial buyers
for their resale or business use. (2010-01-11) (grossiste)

Supply Manual Version 2017-5

Transféré par

Informations du document

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Supply Manual Version 2017-5

Transféré par

Droits d'auteur :

Formats disponibles

2/19/2018 Supply Manual version 2017-5 - Procurement Information on Buyandsell.gc.

Information: Publiservice Disclaimer

1.40.1 Use of Judgment and Knowledge

2.30.10 Allocation of Work by Complexity

3.21 Managing Urgent Acquisitions

3.175 United States Defense Related Procurement

4.10.10 Invitation to Tender

4.30.45.20 Intellectual Property

4.70.30.10 Types of Method of Payment

4.75.35 Contacting Suppliers Directly During the Solicitation Period

5.20 Use of Subject Matter Experts/Specialists

6.1 Approvals and authorities - General information

6.30 Procurement Process Initiated by Client

7.35 Notification to Unsuccessful Bidders/Offerors/Suppliers

8.70 Contract Administration Considerations

8.140.1 Contract dispute resolution

9.20.10 Establishment and Renewal of a Stock Level Case (FMSO I)

9.40.2 Obtaining Advice on the Procurement Strategy for Aboriginal Business

Annex A to Memorandum of Understanding 9.6.1: Responsibility Matrix

1 Chapter 1 - Public Procurement

1.1 Overview or public procurement

1.5 About the Supply Manual

f. Canadian government procurement is carried out in a decentralized manner. Individual departments

1.5.1 Organization of the Manual

1.5.5 Supply Manual Format

1.10 PWGSC Procurement Process

PWGSC procurement processes will be open, fair and honest.

1.10.5 Guiding Principles

1.10.10 Procurement best practices

b. Get Involved Early

c. Consult with Peers

d. Liaise with the Client

i. Select the Appropriate Contracting Method

k. Life Cycle Management of Assets

m. Use Standard Documents

1.15 The Legal Framework of Contracting

The legal framework is comprised of:

a. statutes and regulations;

c. policies, directives, procedures and guidelines; and,

1.20 Statutes and Regulations

i. Department of Public Works and Government Services Act;

1.20.1 Department of Public Works and Government Services Act

i. constitutes the Department;

ii. acquisition and provision of services for departments;

f. Section 16 empowers the "Minister to do anything for or on behalf of:

i. any department, board or agency of the Government of Canada or Crown Corporation, or

1.20.5 Financial Administration Act and the Government Contracts Regulations

1.20.10 Defence Production Act

1.20.15 Federal Accountability Act

1.20.20 Other Acts

a. Conflict of Interest Act;

b. Access to Information Act;

d. Official Languages Act;

h. Department of Justice Act;

i. Bankruptcy and Insolvency Act.

1.25.1 International and National Trade Agreements

World Trade Organization Agreement on Government Procurement (WTO-AGP)

Canada - Chile Free Trade Agreement (CCFTA);

d. Coverage Under Multiple Agreements

1.25.5 North American Free Trade Agreement (NAFTA)

d. For purposes of determining coverage, a requisition is considered to be one for:

e. To determine if a procurement is subject to NAFTA, refer to the following:

iv. Determine the coverage by type of requirement:

A. goods – See Annex 1001.1b-1 Goods; or