Deleted (an archived version is available on the TBS website).
The objective of government procurement contracting is 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 the Crown and the Canadian people.
Government contracting shall be conducted in a manner that will:
This policy applies to all departments and agencies, including departmental corporations and branches designated as departments for purposes of the Financial Administration Act, except those included within the meaning of paragraph (c) of the definition of "department" found in section 2 of that Act. The following transactions are not covered in the policy:
Contracting authorities listed in the Schedule of the Government Contracts Regulations and Commissions created pursuant to the Inquiries Act are exempted from the requirements in this policy for approval by the Treasury Board.
The Minister of Public Works and Government Services Canada is exempted from the requirements in this policy for approval by the Treasury Board to enter into or amend a contract for a contracting authority listed in the Schedule of the Government Contracts Regulations or for the use of an organization that is not subject to Appendix C of this policy.
4.1.1 In support of the policy, the following must be observed in conjunction with the Definitions, the Government Contracts Regulations, the Treasury Board Contracts Directives, the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade, as well as those other Appendices and Sections which consist of both mandatory and optional requirements or a combination of both, as specified.
4.1.2 Work descriptions or specifications must be defined in terms of clear outputs or performance requirements that will encourage and accommodate the use of the competitive process and as required under the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade.
4.1.3 Whenever practical, an equal opportunity must be provided for all firms and individuals to compete, provided that they have, in the judgement of the contracting authority, the technical, financial and managerial competence to discharge the contract and meet, where appropriate, the objectives established by overall national policies or as required under the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade.
4.1.4 Where applicable, bid evaluation criteria must be established to address socio-economic factors in relation to the total cost of a contract before bids are solicited, and solicitation documents must give notice that socio-economic factors will be used to assess bids when they are received.
4.1.5 The Government Contracts Regulations as amended (refer to Appendix B), require that:
4.1.6 Treasury Board approval must be obtained prior to entering into contracts or contractual arrangements where the values or the contract costs (which include all applicable taxes including GST and HST) exceed the limits prescribed by the Treasury Board in the Treasury Board Contracts Directive (Appendix C).
4.1.7 Contracting authorities may enter into contracts in response to a pressing emergency in accordance with Part III of the Treasury Board Contracts Directive on condition that details of the use of this authority are reported to the Treasury Board Secretariat within 60 days of the authorization or beginning of the work.
4.1.8 Public servants who have been delegated authority to negotiate and conclude contractual arrangements on behalf of the Crown must exercise this authority with prudence and probity so that the contracting authority (the minister) is acting and is seen to be acting within the letter and the spirit of the Government Contracts Regulations, the Treasury Board Contracts Directive and the government's procurement policies, the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade.
4.1.9 With respect to contracting for services, contracting authorities must:
4.1.10 The Government Contracts Regulations as amended (refer to Appendix B) require that contracts for the performance of legal services may be entered into only by or under the authority of the Minister of Justice. Accordingly, while it is recognized that lawyers may be engaged for purposes other than the performance of legal services, the Department of Justice must be consulted in every case where a contract for services is entered into with a practising member of the bar, to determine whether the contract is for legal services and thus whether the approval of the Department of Justice is required. No contracting authority may enter into a contract for services with a practising member of the bar without first having obtained the approval of the Department of Justice, or having been advised by the Department of Justice that the contract does not involve legal services.
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.
4.2.1 There are a number of other government policies as well as administrative practices which must be observed in relation to the contracting policy requirements. Many of these administrative requirements follow from the applicability of other laws, policies, conventions and procedures which are of themselves outside of the policy on contracting for goods, services and construction. This article provides an overview of these other policies; the guidelines and appendices contain additional information.
4.2.2 Conviction under Sections 121, 124 and 418 of the Criminal Code denies the capacity to contract with the Crown, unless the Governor in Council under Section 748(3) has restored (in whole or in part) this capacity to the individual or the individual has been granted a pardon.
4.2.3 Public servants must not only act within the law at all times but also must act as though the Criminal Code of Canada were in force in all places where they engage in commercial transactions on behalf of the government. Accepting of bribes or other improper influence is specifically prohibited.
4.2.4 Where applicable, contracting authorities are to observe the provisions of the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade, as amended from time to time.
4.2.5 The Federal Contractors Program for Employment Equity stipulates certain conditions when contracting for goods and services worth $200,000 or more with a contractor employing 100 or more people (see Appendix D).
4.2.6 Pursuant to paragraph 221(1)(d) of the Income Tax Act, payments exceeding $500.00 made by departments and agencies under applicable service contracts, including contracts involving a mix of goods and services, must be reported on a T1204 supplementary slip. Refer to sections 16.14 and 16.15 for details associated with this requirement.
4.2.7 The Common Services Policy provides that departments and agencies must obtain goods and certain services from common service organizations only, unless exception is made by direction, through other Treasury Board policies, within specific departmental legislation, or in the provisions of the Common Services Policy.
4.2.8 Section 9 of the Department of Public Works and Government Services Act gives the Minister of Public Works and Government Services exclusive responsibility for the procurement of all goods as described in the Act. Other departments and agencies may only procure goods either when their own legislation specifically permits or when an appropriate delegation of authority has been made by the Minister of Public Works and Government Services.
4.2.9 Where applicable, contracting authorities are to observe the requirements of the Procurement Strategy for Aboriginal Business.
4.2.10 Contracting authorities are to observe the provisions of the government Security Policy.
4.2.11 All contracts must contain appropriate clauses to permit the payment of interest in accordance with the Policy on Payment Requisitioning and Payment on Due Date, as well as the applicable Goods and Services Tax and the Harmonized Sales Tax.
4.2.12 All contracts must contain appropriate clauses to reflect the requirements of the Conflict of Interest Act.
4.2.13 When a contractor defaults, any contract financial security shall be redeemed and applied to compensate the Crown to the limit permitted in the contract.
4.2.14 Contracting authorities cannot assume or acquire the powers or authority of any department, branch or agency of the Government of Canada to which they provide services such that they acquire greater powers and authority than those conferred by their own legislation or other applicable statutes or regulations.
4.2.15 Departments must ensure that adequate management controls are in place to protect the integrity of the bidding process. It is recognized that the bidding process may employ either traditional hard copy documents or electronic bid documents. In either situation, in order to stand the test of public scrutiny in matters of prudence and probity, Departments must have the ability to demonstrate that all bid materials are received on time and in the manner prescribed in the tender/solicitation documents. In the case of electronic bids, Departments must also ensure that the documents are not altered, forged, changed or corrupted either intentionally or by error. If a contracting authority suspects that collusion or bid rigging has taken place in the bidding process, it shall notify Industry Canada.
4.2.16 The Treasury Board Travel Directive applies to travel costs incurred by contractors when these costs are a specific element of the contract.
4.2.17 The Standard Federal Government Construction Contract should be used for all construction contracts that exceed $100,000. The basic policy governing the principles and expression of policy in the Standard Federal Government Construction Contract is the prerogative of the Treasury Board. However, the style and content of the form is the responsibility of the Department of Public Works and Government Services Canada.
4.2.19 When contracting for temporary help services (administrative support and other categories) contracting authorities should give consideration to obtaining these services directly from companies with which the Department of Public Works and Government Services has entered into temporary help standing offers. Contracting authorities have the option of acquiring temporary help through a standing offer established by Public Works and Government Services Canada, or by dealing directly, by means of a separate departmental standing offer or a contract with other suppliers. Further information on the existence of temporary help standing offers may be obtained from the Department of Public Works and Government Services.
4.2.20 When contracting for the services of former public servants in receipt of a pension paid pursuant to the Public Service Superannuation Act (PSSA), or in receipt of a lump sum payment, discretion is to be exercised to ensure that the public perception is not one of favouritism to these individuals. For this reason, all contracting authorities are to conform with the special operating procedures in article 16.8.
4.2.21 All contracts for public opinion research and advertising must be entered into according to the requirements set out at section 16.13 of the Contracting Policy.
4.2.22 Deleted (moved to section 4.3).
4.2.23 In all contractual situations, the ownership of intellectual property must be addressed (if relevant) in line with current policy prior to contract award. All relevant contracts must contain clauses indicating the ownership of intellectual property.
4.2.24 In the Province of Ontario, federal contracting authorities are required to observe the intent and follow the provisions of the Ontario legislation concerning the protection of jobs and the level of benefits of workers who work primarily at one specific site to provide building cleaning, food and security services. See Appendix E.
4.2.25 Contracting authorities may negotiate and approve employee takeover contracts up to $10 million for both competitive and non-competitive contracts. However, every contracting authority must submit its first case over $1 million to Treasury Board for approval, to ensure that the department has established an adequate process for handling employee takeovers, which meet government-wide standards. See Appendix C.
4.3.1 The Government of Canada has entered into Comprehensive Land Claims Agreements with aboriginal peoples. These agreements have the force of law and are protected in Canada's Constitution. Many agreements include provisions dealing with economic and social development benefits affecting contracting in land claim areas. Below are links to these agreements, park agreements and co-operation agreements that contain aboriginal participation requirements or other contracting requirements.
4.3.2 All Comprehensive Land Claim Agreements except the James Bay and Northern Quebec Agreement can be obtained at:
Publications and Public Enquiries Kiosk
Department of Indian Affairs and Northern Development,
Les Terrasses de La Chaudière,
10 Wellington Street,
Ottawa, Ontario K1A 0H4.
Telephone (819) 997-0380;
facsimile (819) 953-3017.
Copies of the James Bay and Northern Quebec Agreement can be purchased from the "Editeur Officiel du Québec" by sending a request by facsimile to: 1-800-561-3479.
4.3.3 Program managers and contracting officials should note that many contracting obligations start at the project planning stage, which should be documented on the contract file.
4.3.4 Program managers and contracting officers should note that the interpretation of how specific procurements contribute to achieving the spirit and intent of the agreements while complying with the principles of fairness, openness and transparency requires a detailed understanding of the agreements and contracting requirements.
4.3.5 Deputy heads are encouraged to seek legal advice before changing their procurement practices, policies or systems to ensure that the government's legal obligations will continue to be met.
4.3.6 Deputy heads should note that the North American Free Trade Agreement and the World Trade Agreement include provisions to allow procurements to be set aside for aboriginals, including contracts in land claim areas. Similar measures "adopted or maintained with respect to Aboriginal peoples" also allow exemptions from the Agreement on Internal Trade.
4.3.7 When applicable, contracting authorities are to implement the contract priority provisions of the James Bay and Northern Quebec Agreement (JBNQA) and the JBNQA Implementation Agreement (1990), referred to together as "the Agreement", in relation to all contracts awarded by the Crown in the Territory. The policy and implementation measures (prescribed in Appendix T) shall be carried out in a manner that recognizes the developing nature of the economy and labour force in the Territory. The policy, as expressed in the Agreement, applies to and is to take all reasonable measures to encourage Inuit participation in all contracts. The policy applies to all contracts that are created by projects initiated or conducted in the Territory, by the Crown or its agents, delegates, contractors or subcontractors.
4.3.8 Section 4. Inuit of Nunavut Land Claim Agreement - July 9, 1993
Contracting Authorities should refer to the Nunavut Settlement Agreement Article 2 for General Provisions, Article 8 for the establishment, operation or maintenance of park facilities, and Article 33 for contracts relating to archaeological work. This section of the policy reflects the Government contracting obligations addressed in Article 24 of the Agreement.
1.1.1 "Designated Inuit Organization" (DIO) means
8.4.8 Where Government intends to contract for the establishment, operation or maintenance of park facilities in the Nunavut Settlement Area, Government shall:
8.4.9 A DIO shall have the right of first refusal to operate all business opportunities and ventures that are contracted out with respect to Parks in the Nunavut Settlement Area. Upon request, Government shall make available to a DIO all reports and other materials in its possession relevant to the analysis of the economic feasibility of business opportunities and ventures in Parks in the Nunavut Settlement Area.
Part 1: Definitions
24.1.1 In this Article:
"Government" means the Government of Canada or the Territorial Government;
"government contract" means a contract, other than a contract for government employment as defined in Article 23 of the Agreement, between the Government and a party other than Government or any other government for procurement of goods or services, and includes
"Government of Canada" means all federal departments and departmental corporations listed in Schedules I and II, and parent Crown Corporations listed in Schedule III, Part I of the Financial Administration Act RSC 1985, Chapter F-11;
"Inuit firm" means an entity which complies with the legal requirements to carry on business in the Nunavut Settlement Area, and which is
"invite" means to call publicly for bids;
"representative level of employment" means a level of employment in the Nunavut Settlement Area that reflects the ratio of Inuit to the total population of the Nunavut Settlement Area;
"solicit" means to request bids from a limited number of businesses based on some form of pre qualification;
"Territorial Government" means all territorial government departments and all public agencies defined by the Financial Administration Act, S.N.W.T. 1987 (1), c.16, Part IX and Schedules A, B, C, but excluding the Northwest Territories Power Corporation.
Part 2: Objective
24.2.1 The Government of Canada and the Territorial Government shall provide reasonable support and assistance to Inuit firms in accordance with this Article to enable them to compete for government contracts.
Part 3: Procurement Policies
Government of Canada Policies
24.3.1 Consistent with this Article, the Government of Canada shall develop, implement or maintain procurement policies respecting Inuit firms for all Government of Canada contracts required in support of its activities in the Nunavut Settlement Area.
24.3.2 The Government of Canada shall develop or maintain its procurement policies in close consultation with the DIO, and shall implement the policies through legislative, regulatory or administrative measures.
24.3.3 The measures referred to in Section 24.3.2 shall be binding on the Government of Canada, and shall be given effect:
Adaptability Over Time
24.3.5 Procurement policies and implementing measures shall be carried out in a manner that responds to the developing nature of the Nunavut Settlement Area economy and labour force. In particular, the policies shall take into account the increased ability, over time, of Inuit firms to compete for and to successfully complete government contracts.
24.3.6 Procurement policies and implementing measures shall reflect, to the extent possible, the following objectives:
24.3.7 To support the objectives set out in Section 24.3.6, the Government of Canada and the Territorial Government shall develop and maintain policies and programs in close consultation with the DIO which are designed to achieve the following objectives:
Part 4: Bid Invitation
24.4.1 In co-operation with the DIO, the Government of Canada and the Territorial Government shall assist Inuit firms to become familiar with their bidding and contracting procedures, and encourage Inuit firms to bid for government contracts in the Nunavut Settlement Area.
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:
24.4.3 Where the Government of Canada or the Territorial Government intends to invite bids for government contracts to be performed in the Nunavut Settlement Area, it shall take all reasonable measures to inform Inuit firms of such bids, and provide Inuit firms with a fair and reasonable opportunity to submit bids.
Part 5: Bid Solicitation
24.5.1 Where the Government of Canada or the Territorial Government solicits bids for government contracts to be performed in the Nunavut Settlement Area, it shall ensure that qualified Inuit firms are included in the list of those firms solicited to bid.
24.5.2 Where an Inuit firm has previously been awarded a government contract, and has successfully carried out the contract, that Inuit firm shall be included in the solicitation to bid for contracts of a similar nature.
24.5.3 In the absence of competitive bidding for government contracts, qualified Inuit firms will be given fair consideration.
Part 6: Bid Criteria
24.6.1 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:
24.6.2 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 Territorial Government for the awarding of its government contracts in the Nunavut Settlement Area:
Part 7: List of Inuit Firms
24.7.1 The DIO shall prepare and maintain a comprehensive list of Inuit firms, together with information on the goods and services which they would be in a position to furnish in relation to government contracts. This list shall be considered by the Government of Canada and the Territorial Government in meeting their obligations under this Article.
Part 8: Evaluation and Monitoring
24.8.1 The Government of Canada and the Territorial Government, in co-operation with the DIO, shall take the necessary measures to monitor and periodically evaluate the implementation of this Article.
Part 9: Implementation
24.9.1 The objectives of this Article shall be achieved throughout the allocation or re-allocation of government expenditures without imposing additional financial obligation on the Government of Canada or the Territorial Government.
24.9.2 The Territorial Government will carry out the terms of this Article through the application of Territorial Government preferential contracting policies, procedures and approaches intended to maximise local, regional and northern employment and business opportunities.
24.9.3 The Government of Canada, the Territorial Government and the DIO shall conduct a review of the effect of this Article within 20 years of its implementation. If the DIO and the Government of Canada or the Territorial Government, as the case may be, agree after the review that the objectives of this Article have been met, the obligations under this Article of the Government of Canada or the Territorial Government, as the case may be, shall cease within one year of the completion of the review. If the obligations of the Government of Canada or the Territorial Government under this Article remain in effect after the initial review, the Parties shall review the requirement to continue such provisions every five years or at such other times as they may agree.
Part 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 - February 2, 1996
33.6.1 Where any agency of the Government intends to contract for carrying out of archaeological work in the Nunavut Settlement Area, the agency shall:
33.6.2 Any archaeological programs in the Nunavut Settlement Area that are administered by Government shall conform, at a minimum, to the employment and training provisions set out in Article 23.
4.3.9 Links to some Comprehensive Land Claim Agreements that contain contracting obligations:
James Bay and Northern Quebec Agreement (particularly articles 28.10.3, 28.10.4, 28.10.11 and 29.0.31)
Agreement Respecting the Implementation of the James Bay and Northern Quebec Agreement (signed September 12, 1990), Annex A - Inuit Employment and Contract Priority.
Inuvialuit Final Agreement (particularly article 16)
Gwich'in Comprehensive Land Claim Agreement (particularly articles 10.1.4 and 25.1.10, as well as Appendix C, sections 9.7, 11.6, 13.6, and 17.2)
Inuit of Nunavut Land Claim Agreement (particularly articles 2 and 24)
Umbrella Final Agreement Between The Government Of Canada, The Council For Yukon Indians And The Government Of The Yukon(particularly articles 6.4, 22.214.171.124 and 22.5.0)
First Nation of Nacho Nyak Dun Final Agreement (particularly articles 6.4.0, 126.96.36.199 and 22.5.0)
Champagne and Aishihik First Nations Final Agreement (particularly articles 6.4.0, 188.8.131.52, 13.12.0 and 22.5)
Teslin Tlingit Council Final Agreement (particularly articles 6.4.0, 184.108.40.206 and 22.5.0)
Vuntut Gwitchin First Nation Final Agreement (particularly articles 9.6, 9.7 and 9.8 [Chapter 10, Schedule A], 6.4.0, 220.127.116.11, and 22.5.0)
Selkirk First Nation Final Agreement (particularly articles 5.1 and 5.2 [Chapter 13, Schedule A], 13.1, 15.7 and 17.14)
Little Salmon/Carmacks First Nation Final Agreement (particularly articles 13.1, 15.7 and 17.14)
Sahtu Dene and Metis Comprehensive Land Claim Agreement (particularly articles 12.2.1, 21.3 and 26.2.8)
Northeastern Quebec Agreement (amends JBNQA)
Note: if any of the above links do not work, the agreement may be accessible at:
5.1.1 It is the responsibility of departments and agencies to ensure that adequate control frameworks for due diligence and effective stewardship of public funds are in place and working. Treasury Board Secretariat works with departments and agencies to address management issues and compliance with Contracting Policies identified through its ongoing relationships with departments, management reviews, evaluations, internal audits and transactions.
5.1.2 All departments and agencies awarding contracts and/or amendments, are required to submit an annual report to the Treasury Board Secretariat on all contracting activities (see Appendix K for details).
5.1.3 Also, as part of the obligations of the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade, contracting authorities are required to report certain statistics. These statistics are collected from the contract coding information provided by contracting officers on each procurement. Thus, accurate coding of the applicable agreements, goods, services or construction code, tendering method, limited tendering reasons and contract award details is essential to demonstrate the federal government's compliance with the agreements to the other countries or provinces that are parties to the agreement.
5.1.4 The government monitors and reports on its contracting activities covered by all Comprehensive Land Claims Agreements (CLCAs). These agreements form part of the treaty rights that are protected in Section 35 of the Constitution Act, 1982.
18.104.22.168 Deputy heads must report to the deputy head of INAC on contracts entered into by their departments and contracts entered into by Public Works and Government Services Canada on behalf of their department in a form and manner designated by the Deputy Minister of INAC within 45 calendar days after the end of the quarter. These reports must include the following information for each contract and the summary:
22.214.171.124 Deputy heads must provide a statement to INAC quarterly to the effect that no contracting has occurred in a CLCA area if no contracting has occurred in that area.
126.96.36.199 The deputy head of INAC must prepare and disclose, on a public Government of Canada website, a quarterly report on contracts for each area covered by a CLCA within 90 calendar days after the end of the quarter. Each report must include the information described in sections 188.8.131.52 and 184.108.40.206 from each department and agency.
220.127.116.11 The deputy head of INAC must prepare and disclose, on a public Government of Canada website, an annual report on contracts for each area covered by a CLCA within 180 days after each fiscal year. The report must include the following information:
5.1.6 Deputy heads are required to publicly disclose quarterly, within one month after the close of each quarter, contracts entered into or amendments valued at over $10,000.
5.2.1 Where appropriate, contracting authorities should include a right-to-audit clause to ensure that verification of the amount paid is correct.
5.2.2 Contracting authorities are to ensure that contract files are properly documented.
6.1.1 In addition to the Financial Administration Act, the following acts, regulations and policies also apply specifically to contracting for goods and services, and construction by departments:
6.1.2 This policy is issued pursuant to paragraph 7(1)(a) and sub-section 41(1) of the Financial Administration Act, the Government Contracts Regulations as amended, the Treasury Board Delegation of Powers Order, SOR 86-1123, and the Treasury Board Contracts Directive.
6.1.3 This policy as well as the appendices contained in this volume are to be read in conjunction with the provisions of statutory law as well as evolving judicial decisions that establish precedence in the application of the law.
6.1.4 The present document contains the text of the Contracting Policy. It was last updated on June 9, 2003, and replaces the former document dated December 21,2001.
Please direct enquiries about this policy instrument to the organizational unit in your department responsible for this subject matter. For interpretation of this policy instrument, the responsible organizational unit should contact: TBS Public Enquiries.
8.1.1 The authority for departmental contracts is generally in the legislation constituting the department and conferring certain powers on the minister. This authority is reinforced by the Appropriation Acts passed by Parliament each year which, inter alia, provide funds to carry out the departmental mandate. Subsection 41(1) of the Financial Administration Act provides for the establishment of financial limits above which Governor in Council or Treasury Board approval is required.
8.1.2 The Government Contracts Regulations were approved by the Governor in Council on June 30, 1987, P.C. 1987-1355, on the recommendation of the Treasury Board, pursuant to subsection 41(1) of the Financial Administration Act. These Regulations have been subsequently amended on a number of occasions (see Appendix B for the current text).
8.1.3 The Treasury Board Contracts Directive, which prescribes the dollar levels above which Treasury Board authority is to be obtained, is contained in Appendix C.
8.1.4 All dollar levels in Appendix C are inclusive of all applicable taxes (including GST and HST).
8.2.1 Role of ministers. The minister is ultimately responsible to Parliament for all contracting activity. Each minister customarily delegates contracting authority to various levels within the department or agency. As stated in article 4.2, Related Requirements, officials delegated such authority are to exercise it with prudence and probity so that the responsible minister is acting and is seen to be acting within the letter and the spirit of the Government Contracts Regulations and the Treasury Board's contracting directives.
8.2.2 Common service organization (CSO). In some cases, the procurement of goods, which is the responsibility of the Minister of Public Works and Government Services, has been delegated to other ministers. In addition, the Treasury Board, pursuant to sub-section 7(1) of the Financial Administration Act, has directed that certain goods and services be procured through a CSO. (See the Treasury Board's policy on common services.)
8.2.3 Treasury Board Advisory Committee on Contracts (TBACC) considers matters involving the form and procedure of government contracts or the policy and guidelines on contracting that may be referred to it, or where the TBACC sees the need for change or clarification.
8.2.4 The work of TBACC, is undertaken by two subcommittees:
8.2.5 Specialized working groups may be established to investigate and advise in areas of special interest.
8.3.1 As stated in article 4.2, Related requirements, when contracting for goods and services worth $200,000 or more with a contractor employing 100 or more people, departments and agencies are to adhere to the conditions of the Federal Contractors' Program for Employment Equity set out in Appendix D.
8.4.1 Persons and companies in Canada are bound by economic sanctions imposed by Canada by regulations passed pursuant to the United Nations Act. As a result, the Government of Canada cannot accept delivery of goods or services that originate, either directly or indirectly, from the countries, entities or individuals subject to economic sanctions. Departments may obtain a list of sanctions from the Foreign Affairs and International Trade Canada site. Contracting authorities must ensure that all contracts entered into pursuant to the Government Contracts Regulations contain a condition that prohibits the contractor from supplying to the Government of Canada any goods or services subject to economic sanctions. During the performance of any contract, should there be an addition to the list of sanctioned countries, entities or individuals or an addition to the list of sanctioned goods or services that causes an impossibility of performance for the contractor, the situation will be treated as a force majeure. All contracts must also contain a provision that requires the contractor to inform Canada of the existence of such a situation. Contracting authorities are advised to consult with legal counsel to determine the appropriate course of action in the event of a force majeure situation.
8.5.1 As stated in article 6.1.1(a), the Official Languages Act and related policies and directives are to be observed in the contracting process. See Appendix F for details.
8.6.1 Canada has agreed to apply the provisions of NAFTA, which is a multilateral agreement to reduce trade barriers between Canada, the United States of America and the Federal Republic of Mexico. Chapter 10 of NAFTA aims to achieve greater competition and transparency in government procurement, and to eliminate both protection of domestic products or suppliers, and discrimination among foreign products or suppliers.
8.6.2 Preferential treatment policies may only be applied to procurement before the applicable thresholds or if the particular procurement is excluded, excepted, a derogation or a set-aside from the trade agreements.
8.7.1 The WTO-AGP is a multilateral agreement that aims to secure greater international competition for government procurement. The WTO-AGP came into effect on January 1, 1996. Member countries include Canada, the European Communities, the United States, Japan, Korea, Israel, Norway and Switzerland. The WTO-AGP replaces the General Agreement on Tariffs and Trade (GATT) Government Procurement Code by extending the previous coverage of goods to include services and construction. The national treatment and non-discrimination provisions and procurement procedures of the WTO-AGP are similar to those of NAFTA.
8.8 Agreement on Internal Trade (AIT)
8.8.1 The AIT is an agreement on Canadian internal trade, which aims to reduce barriers to trade within Canada. It was signed by the 10 provinces and2 territories and came into effect on July 1, 1995. Chapter 5 of AIT is intended to create a system that will allow fairness and equal access to government procurement for all Canadian suppliers in order to reduce cost, and develop a strong economy.
Role of common service organizations (CSOs) in government contracting.
A vital aspect in government contracting is the role played by CSOs and their relationships with client departments at all stages in the life-cycle management of goods and services. When the interests of the government can best be met by centralized acquisition, the policy on common services provides that procurement be carried out by the designated mandatory CSO unless the services are designated optional or an exception has been granted. The policy roles, responsibilities and relationships in the provision and receipt of common services respectively by CSOs and their clients are governed by the Treasury Board's policy on common services. This part addresses more detailed aspects of the CSO-client relationship.
8.9.1 Details of the CSO-client relationship will normally be covered in general memoranda of understanding (MOU) applicable to the CSO and its client departments. These may be adjusted to suit particular CSO-client agreements. Acquisitions of a special or significant nature may require specific MOUs and more detailed treatment such as that outlined in the policy on Major Crown Projects. Clients are generally responsible for determining what they want, where and when; the CSO is normally responsible for determining how services will be provided to meet the needs of clients.
8.9.2 In terms of life-cycle management, this means that:
This does not mean each party functions 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 CSO-client division of responsibilities.
8.10.1 The Treasury Board has authorized any contracting authority to enter into and amend a service contract to acquire energy services pursuant to the Federal Building Initiative Policy, which may include energy supply, energy efficiency improvements, management services, energy management monitoring and training, if the total under the contract, including any amendments does not exceed $25 million on condition that the their first energy management contract over $1 million is submitted to the Treasury Board for approval. See Appendix O.
8.11.1 Contractors who do business with the government must not retain lobbyists whom they pay on a contingency basis. This means that lobbyists must not be paid a fee or compensation related to the value of the contract. If lobbyists are retained in connection with a proposed or actual contract with the Crown, they should be paid on a fee for services or retainer basis. See Appendix M.
9.1.1 As stated in the policy, the objective of government procurement contracting is 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 the Crown and the Canadian people. Inherent in procuring best value is the consideration of all relevant costs over the useful life of the acquisition, not solely the initial or basic contractual cost.
9.1.2 The clear identification of the requirements associated with the decision to contract is of primary importance. There are acquisitions in which the requirements and specifications are clear, the records of likely suppliers are relatively uniform and discretionary judgement is at a minimum; price or cost is therefore the primary consideration. However, other procurements call for greater judgement and it is unwise to focus simply on price or lowest initial cost (in recognition of this fact, the higher competitive authorities may be used for service contracts in which the lowest or best value bidder is selected - see definition of competitive contract in Appendix A). Often, the goods or services offered by different suppliers are not identical. Assessments and trade-offs should be made between different performance characteristics, costs, dates of delivery, service, follow-on procurement and logistic support. Equally important are those cases in which a product or facility has been designed to meet specific government requirements. In such instances, detailed analysis of materials and components in terms of their function and price may be needed before the contracting process. This should clarify the requirement which should, in turn, result in best value.
9.1.3 The analysis necessary to achieve best value should not be confined to the actual procurement process; it should begin in the planning and appraisal of alternatives and continue through the definition of requirements which would include assessment and award criteria, evaluation of sources, selection of contractor, preparation, negotiation, execution and award of contract, contract administration and post-contract evaluation. Sophisticated evaluation techniques, such as cost/benefit analysis, may be needed to define the best combinations of quality, service and time considerations, at the lowest total cost over the useful life of the acquisition.
10.1.1 As required by Section 5 of the Government Contracts Regulations, the contracting authority is to solicit bids before any contract is entered into. The competitive approach in determining a contractor should therefore be the norm. Because it is not always possible, practical, or cost effective to seek bids for every proposed contract, Section 6 of the Government Contracts Regulations permits certain exceptions.
10.1.2 Departments and agencies should not accept bids from one another or from the provinces, municipalities, territories or Crown Corporations unless the department, agency or Crown Corporation bidding is authorized by policy or statute. Departments and agencies may, pursuant to section 3 of the Contracting Policy, arrange transactions that involve the transfer of goods, services or real property between departments, Crown Corporations, provinces, municipalities and the Territories.
10.2.1 Section 6 of the Government Contracts Regulations contains four exceptions that permit the contracting authority to set aside the requirement to solicit bids. These are:
10.2.2 In exception (a), a pressing emergency is a situation where delay in taking action would be injurious to the public interest. Emergencies are normally unavoidable and require immediate action which would preclude the solicitation of formal bids. An 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.
10.2.3 Exception (b) sets specific dollar limits below which a contracting authority may set aside the competitive process. However, contracting authorities are expected to call for bids whenever it is cost effective to do so. When the proposed contract is estimated to exceed the dollar limits, the contracting authority is to call for bids.
10.2.4 Exception (c) should normally be reserved for dealing with security considerations or to alleviate some significant socio-economic disparity. For example, the preservation of a certain source of supply may be necessary to ensure that future needs of government can be met. This exception should be invoked only with the approval of senior management as delegated by the contracting authority (the minister).
10.2.5 Exception (d) sets competitive bidding aside when only one person or firm can do the job. This exception is quite definitive and should be invoked only where patent or copyright requirements, or technical compatibility factors and technological expertise suggest that only one contractor exists. This exception should not be invoked simply because a proposed contractor is the only one known to management.
10.2.6 Any use of the four exceptions to the bidding requirement should be fully justified on the contract file or, where applicable, in submissions to the Treasury Board. Even if a proposed directed contract (see Appendix A) for goods and services qualifies under one of these four exceptions, the contracting authority is encouraged, whenever possible, to use the electronic bidding methodology to advertise the proposed award through an Advance Contract Award Notice (ACAN). If no statements of capabilities meeting the requirements set out in the ACAN are received within fifteen calendar days, the proposed contract is deemed to be competitive and may be awarded using the electronic bidding contracting authority.
Should the contracting authority have to seek the Treasury Board's approval to award such a contract, it should be noted that the Treasury Board cannot approve a directed contract which does not meet at least one of the four exceptions. In such cases, an exception to the Regulations by means of an Order In Council would be required.
10.2.7 As required by the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade, the contracting authority shall solicit bids before any contract over the respective agreements thresholds is entered into. Because it is not always possible to seek bids for every proposed contract, the following exceptions to bidding are permitted.
10.2.8 The North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade permit the contracting authority to set aside the requirement to solicit bids under the following conditions:
10.2.9 In addition to the preceding exemptions, the following are exemptions to bidding for procurement subject to WTO-AGP only:
10.2.10 In addition to the exemptions listed in 10.2.9, the following are exemptions to bidding for procurement subject to AIT only:
10.2.11 Under the AIT all services are covered except the following:
10.2.12 The following are excluded from the AIT:
10.3.1 As stated in Section 4, Policy requirements, Contracting authorities are to ensure that:
Assessment and award criteria must be spelled out in the solicitation document.
10.4.1 Best value is not confined to the contractual process; it is equally important at the requirements definition stage. For many acquisitions, especially for Major Crown Projects, 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, 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.
10.4.2 Best value may be promoted if performance specifications are stressed; this avoids over-defining the requirement from a technical point of view. The custom oft he trade, the effect of the competitive process and the different legal liabilities associated with them may affect the choice between defining a requirement in terms of detail or performance. A requirement defined in terms of detail (e.g., type and level, quality, material or method of workmanship) will often result in legal liability for defects shared with the contractor. On the other hand, a requirement defined in terms of performance normally results in the liability borne by the contractor alone for achieving the specified performance.
10.4.3 Departments and agencies should use nationally or internationally-recognized standards whenever possible and ensure that the requirements definition complies with applicable federal legislation, such as that relating to hazardous products and environmental protection. In the absence of an appropriate standard, it may be economical to use trade names or equivalents in defining requirements for minor or infrequent procurements. When this is done, departments and agencies should include all available trade names or equivalents in the requirements definition. The appropriate common service agency can be very helpful here.
10.5.1 Requirements should be defined and specifications and estimates established before bids are solicited and contracts let, so that all prospective contractors are treated equally. In acquiring complex capital equipment, construction or services, other procedures may help control time, cost and performance. Some of these are described below. The procurement method chosen should be indicated, with supporting justification, when contract approval is sought, whether within a department or agency or from the Treasury Board. Adequate specification details should be available to all interested or qualified firms.
10.5.1a Under the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement, technical specifications laying down the characteristics of the products or services to be procured, such as quality performance, safety and dimensions, symbols, terminology, packaging, marking and labelling, or the processes and methods for their production and requirements relating to conformity assessment procedures prescribed by the contracting authority, shall not be prepared, adopted or applied to create unnecessary obstacles to international trade. Technical specifications prescribed by contracting authorities shall, where appropriate:
10.5.1b Under NAFTA and WTO-AGP, there may be no requirement or reference to a particular trademark or trade name, patent, design or type, specific origin, producer or supplier, unless there is no sufficiently precise or intelligible way of describing the procurement requirements and provided that words such as "or equivalent" are included in the tender documentation.
10.5.1c As required by NAFTA and WTO-AGP, contracting authorities shall not seek or accept, in a manner which would have the effect of precluding competition, advice that may be used to prepare specifications for a procurement from a firm that may have a commercial interest in the procurement.
10.5.2 Traditional method. When a project is not complex and there is no significant interaction between the specification and the implementation phases, the design, specification, or requirement definition is completed separately, to the stage where the cost to implement can be accurately estimated. A contract may be awarded that involves only normal business risks. Departures from this traditional method may be justified if, for instance:
10.5.3 Developer proposal. Here a contractor agrees to carry out a project jointly with the government which may contribute certain financial or technical resources. The project benefits the contractor beyond the contract price paid. This approach is warranted when the requirement can be obtained at reduced cost to the taxpayer or when benefits connected with other government socio-economic objectives are greater.
10.5.4 The following should be evaluated before proceeding:
10.5.5 Design/build or total package procurement. Here a firm-price contract is awarded based on a performance specification and the contractor is expected to complete a design, construct a facility or manufacture a product or perform a service. This method is warranted for relatively simple technical requirements where the need could respond to routine solutions and no extraordinary risk is involved in working within a firm price. Economies of price or of government effort may be possible by transferring detail specifications or design responsibilities completely to the contractor.
10.5.6 The following should be evaluated before proceeding:
10.5.7 Phased contracting. Here the overall requirement may be satisfied in stages. For example, separate production, service or construction contracts may be awarded to implement specific phases or components of a requirement. Individually, the separate contracts may be straightforward and may be handled under the traditional method. However, coordinating the contracts may involve considerable complexity. For example, system engineering techniques may be needed to ensure the individual contracts mesh properly and meet overall system performance objectives. This approach is warranted when the time that is likely to be saved has a value beyond the potential cost of the risk of beginning work before all of the requirements specifications or designs are completed.
10.5.8 The following factors should be evaluated before proceeding:
10.5.9 Flexible price contracting. Sometimes because of unknown factors or postponed decisions, the requirements definition will remain flexible in its interpretations or details of the proposed work will be incomplete. A price basis may be formulated that caters to the unknown factors and/or the implications of the postponed decision, while ensuring that costs are controlled and value is received. Basis-of-price options are outlined in article 10.6. This method is warranted when early completion of the work or the state of the art do not permit firmer arrangements before contracting or when the phased contracting method would be impractical. This is typical of research and development, for instance, where the phases of the work are highly interdependent.
10.5.10 The following factors should be considered before proceeding:
10.5.11 Standing Offer. As defined in Appendix A, a standing offer is an offer from a potential supplier to supply goods, services or both, on the pricing basis and under the terms and conditions stated in the standing offer. Standing offers are established by competitive bidding or negotiation. A separate contract is entered into each time a call-up is made against a standing offer.
10.5.12 Because of the nature of a standing offer, quality specifications may be predetermined but it is usually not possible to give suppliers more than an estimate of the quantity that will ultimately be purchased under each call-up.
10.5.13 The standing offer method may be the best approach when there are many users ordering the same item or definable service across government and the goods or services are commercially available from local suppliers. The speedier procurement and the price advantages may be further enhanced by reduced administrative paperwork, and, in the case of materiel, the use of existing industry distribution facilities will eliminate the need to warehouse large inventories.
10.5.14 Standing offers are generally established by common service agencies for goods and services widely used by other government departments and agencies. However, all contracting authorities should consider the standing offer method to satisfy repetitive requirements.
10.6.1 The competitive process is the normal way to establish best value and price. However, it may be set aside and price established by other means.
10.6.2 The pricing of a requirement depends on how accurately it is defined. To demand an unduly firm price, in a situation where costs cannot be known accurately in advance, is to invite excess profit or loss to the contractor. Correspondingly, an unduly flexible price, for a requirement that may be defined accurately, removes some of the advantages of competition and could encourage inefficiency in contractors at government expense. It is equally important to good contract pricing:
10.6.3 The following methods all accommodate competition:
10.6.4 If it is other than a fixed lump sum, the price should clearly state whether a ceiling price is intended. Where applicable, the contract should state the limit beyond which the contractor must not spend without prior approval through a contract amendment. Ambiguity about whether a ceiling or a limitation of expenditure applies is a frequent cause of dispute.
10.6.5 If defining the requirement is so difficult that competition would not be meaningful, it may be necessary to use cost-plus-a-fixed-fee or cost-plus-a-percentage-of-cost as a basis of price. The latter should be avoided if at all possible and negotiation should continue until the contracting authority is sure that a satisfactory basis for contracting has been achieved.
10.6.6 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 proposals in the light of information about the position of other firms. The confidentiality of each firm's negotiating position is to be assured.
10.6.7 Occasionally, a contract may be awarded with the price to be negotiated later when certain requisite information becomes available. The information may comprise important elements of the requirements definition that cannot be completed in time, or the cost of the first part of the order is needed as a basis for negotiating a firm price for the balance. This form of contract should be considered as a substitute for a cost-plus-fixed-fee contract when there is a definite prospect that the price basis can be improved as the work proceeds.
10.6.8 The competitive process is usually a reliable method because a contractor will include in the bid elements representing costs, overhead, profit and contingencies. However, in some situations such as unstable market conditions, one or more elements may be subject to such extreme fluctuations in price that neither buyer nor seller would be confident in accepting a fixed price over an extended period of time. While some commodities are subject to continuing price fluctuations, contracting specialists usually know what these commodities are and have developed standard techniques to mitigate the risks.
10.6.9 If the price of normally stable commodities and services begin to fluctuate, the contracting authority should try to reduce the risk while minimizing the erosion of fixed prices by:
10.6.10 Multi year/phase contracts. All contracts should specify the rate(s) of payment or unit price(s) for the entire period and/or quantity required, including all phases and specified option periods or quantities. When this is not possible, as with some multi-phase, multi-year or renewable (option year) contracts, payments for each year or phase should be based on a pre-agreed rate or formula that is spelled out in the "terms of payment". In addition, measures should be included to ensure the contractor performs in accordance with the contract and to avoid disputes. Appropriate increases for time periods or quantities that cannot be established when the contract is signed should be defined in the terms of payment using a rate or formula that may depend on data that can be established only through audits, rate negotiations or limited escalation clauses based on appropriate indices.
10.6.11 Federal taxes. Contracts and requests for bids or proposals should require the bidder or contractor to include an allowance for all applicable taxes, permits and fees. It may also be wise to include a provision to cover tax rebates (i.e., where taxes, allowed in the price, were not paid, owing to the grant of a tax rebate).
10.6.12 The request for bids or proposals should provide for tax increases or decreases arising from changes in the appropriate legislation that are announced after a bid has been submitted. This will allow changes to the cost elements to be reflected in the actual contract. Tax increases or decreases which are announced and put into effect after the contract is awarded may be handled by an amendment to the contract.
10.6.13 Provincial and municipal taxes and fees. Agreements have been reached between the federal government and several provincial governments to implement a reciprocal taxation program. The Comptrollership volume of the Treasury Board Manual describes the relevant administrative procedures.
10.6.14 Foreign taxes. The circumstances surrounding the payment of foreign taxes are variable and complicated. Whenever this possibility arises, contracting authorities should seek the advice of the Department of Justice before a contract is signed in order to avoid difficulties later. Bidding documents, requests for proposal sand contracts should require the tenderer or contractor to include in the price an allowance for all applicable taxes, permits and fees.
10.6.15 Where applicable, bidders should make provision for appropriate travel and living expenses related to the proposed contract. These travel and living expenses should follow the contractor's established policy. However, as stated in article 4.2, Related requirements, under no circumstances may the amounts paid exceed the maximum permitted in the Treasury Board Travel Policy. Travel and living expenses are part of the total cost of the contract.
10.6.16 Contracting authorities shall not structure a procurement, select a valuation method, or divide procurement requirements in order to avoid the obligations of the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement and the Agreement on Internal Trade.
10.6.17 In determining the value of a contract under the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement and the Agreement on Internal Trade, the valuation shall take into account all forms of remuneration, including premiums, fees, commissions, taxes and interest receivable.
10.6.18 Under the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement, if an individual requirement for a procurement results in the award of more than one contract or a contract awarded in separate parts, the basis of valuation shall be either:
10.6.19 Under NAFTA and WTO-AGP, in cases of contracts for lease, rental or hire purchase of products or services, or in the case of contracts that do not specify a total price, the basis for valuation shall be:
10.6.20 The value of the requisition including the Goods and Services Tax is to be used when determining whether or not a procurement is subject to a national or international trade agreement. For purposes of determining coverage, a procurement is considered to be one for goods, services, or construction, based on which represents more than 50 per cent of the estimated value of the requisition.
10.7.1 Equal opportunity for all contractors. In accordance with the policy statement to reflect fairness in spending public funds and the requirements under the trade agreements, the method of procurement used for a particular acquisition must, within the limits of practicality, give all qualified firms an equal opportunity for access to government business. For all procurements, especially those subject to the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade, all parties must be given an equal opportunity to access government business. Therefore, contracting authorities should ensure that potential contractors are identified. Whenever projects are advertised, the area of coverage should not be so narrow that it inhibits free competition. If fewer than three respondents are reached by established advertising practices, the advertising coverage or bid solicitation should be increased. Contracting authorities that keep source lists from which bids are invited, may find it in their interests to establish a regular way to inform industry of this practice. This might take the form of periodic briefings to industry associations accompanied by adequate publicity, departmental public information brochures adequately circulated, newspaper and trade journal advertisements, electronic media advertisements, etc. For example, a contracting authority can use, inter alia, the electronic bidding system, and may supplement this by direct solicitation in order to maximize the involvement of the most qualified suppliers of goods and services.
10.7.2 Contracting authorities should note that when a combination of solicitation processes is used together, it is essential that they
10.7.3 The following is a description of the various selection methods that may be used.
10.7.4 Advertisement in the public press. This method is appropriate:
10.7.5 Mailing lists. This method is appropriate:
10.7.6 Source lists. For procurements subject to the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement, source lists may be used for selective tendering. Contracting authorities may also establish source lists of competent suppliers that are representative of the suppliers of the required goods or services. When the source list contains many firms, they should be pre-selected in rotation through the list, from procurement to procurement, in an equitable manner. Electronic media may be used to advertise in order to develop an appropriate list of suppliers. In addition, rotational selection of qualified individuals or firms by computer may also be used.
10.7.6a Under the Agreement on Internal Trade, source lists shall:
10.7.7 Solicitation by electronic media. Electronic media may be used to solicit bids or to give public notice of (i) a call for bids in respect of a proposed contract or (ii) an intention to award a directed contract (using an Advance Contract Award Notice). The use of electronic media enables instantaneous notification of suppliers of the opportunity to bid and facilitates bid submission by those who are interested. This method is particularly suitable as an expeditious approach to competitive procurement. Depending on the circumstances, this sourcing method may be supplemented by the use of more traditional methods of calling for bids in newspapers or trade publications as well as source lists where, in the judgement of the contracting authority, they are necessary to ensure adequate competition.
10.7.8 Electronic Bidding. This methodology is appropriate:
10.7.9 For most contracting authorities, using electronic bidding methodology to solicit and invite bids for services means that both their contract entry and amending authorities are increased (refer to Appendix C for greater detail).
10.7.10 The approved national electronic bidding and information service is the Government Electronic Tendering System (GETS). GETS affords supplier subscribers access to government procurement opportunities. To advertise bid opportunities electronically, contracting authorities may give public notice by means of:
10.7.11 Electronic Bidding. The approved national electronic bidding and information service is the MERX system, provided by Cebra Inc. It is currently available through the Department of Public Works and Government Services, and is provided under contract to supplier subscribers, and affords them access to all government procurement opportunities.
10.7.12 Government Business Opportunities (GBO). GBO is currently available through the GETS. The GBO advertises domestic and international procurement opportunities.
10.7.13 Advance Contract Award Notice (ACAN). An Advance Contract Award Notice (ACAN) allows departments and agencies to post a notice, for no less than fifteen calendar days, indicating to the supplier that it intends to award a good, service or construction contract to a pre-identified contractor. This electronic bidding procedure can be advantageously used to fulfil the requirement of Section 5 of the Government Contracts Regulations to solicit bids and is appropriate:
10.7.14 While an ACAN is always published using an approved electronic procurement information service, contracting authorities may supplement the electronic notice in order to inform the public by the traditional approaches, such as mailing lists, notification in trade publications and the public press, etc.
10.7.15 An ACAN is to:
10.7.16. If no other supplier submits, during the fifteen calendar day posting period, a statement of capabilities that meets the requirements set out in the ACAN, the competitive requirements of the contracting policy have been met. Following the notification of suppliers not successful in demonstrating that their statement of capabilities meets the requirements set out in the ACAN, the contract may then be awarded using the Treasury Board's electronic bidding authorities.
10.7.17 If other potential suppliers submit statements of capabilities during the fifteen calendar day posting period, and meet the requirements set out in the ACAN, the department or agency must proceed to a full tendering process on either the government's electronic tendering service or through an traditional means, in order to award the contract.
Advance Contract Award Notices shall be posted for no less than fifteen calendar days on the government's electronic tendering system. Statement of capabilities must be submitted within the same fifteen calendar days. Where the ACAN is subject to NAFTA or the WTO-AGP, the fifteen calendar days shall commence on the date the ACAN is published in the Government Business Opportunities.
With respect to statements of capabilities that are not accepted, the decision to reject will be impartial and independent in that it will not be made by the same official(s) who originally decided to proceed through an ACAN process.
For further information consult the Guide for Managers - Best Practices for Using Advance Contract Award Notices (ACANs).
10.7.18 Pre-selecting bidders. This method is appropriate:
10.7.19 Pre-selection of bidders does not preclude a contracting authority from competitive contracting. In this situation, a contracting authority may implement the policy of competitive bidding by then seeking valid bids from the qualified bidders.
10.7.20 Pre-qualification of bidders. When the size or complexity of a project necessitates further special assurance of the contractor's ability, all necessary tests of the competence of prospective contractors may be made in advance. Bids are then invited only from the firms that have qualified. The possibility of disqualifying a firm after it has incurred a considerable expense in bidding on a large special project is thereby reduced or eliminated.
10.7.21 A version of this method, suitable for manufacturing certain items, is to pre-establish a list of qualified products which, through the testing of samples, have met the requisite standards of quality. A qualified products list is particularly suitable for selecting bidders for manufactured products when the quality requirements exceed the normal commercial standards.
10.7.22 Two-step proposal (including price competition). This method is used when, owing to the special nature of the requirement and the lack of a detailed definition of the specifications, the selection is to be based largely on the technical and managerial proposals submitted. Final selection among the firms that have submitted acceptable technical and managerial proposals is then made on the basis of price. One of the methods above may be used to choose firms to be invited. Pre-qualification is frequently the most appropriate in these circumstances.
10.7.23 Because of the infinite variety and complexity of contracting situations, it is difficult to dictate absolute norms. Each case should be examined on its own merit to determine whether price should play a dominant or secondary role in the selection process.
10.7.24 Proposal competition. Architectural, engineering, research, development and consulting services typify when a contractor should be selected for the level of performance offered rather than for price alone. Usually a very comprehensive proposal is requested to elicit all of the contractor information needed for an objective appraisal of the offers received.
10.7.25 The merits of each proposal should be compared using a weighted list of the criteria to be met. These criteria should identify accurately all the performance elements significant to the success of the project and should measure both the competence of the firm and the worth of its particular technical approach. Competence includes, for example, such factors as managerial structure, key personnel, prior industrial experience, facilities and financial strength. Technical worth includes the firm's proposed work breakdown structure, identification of key technical problems and outlines of solutions, proposed schedule of milestones, cost, quality and time control systems to be used, and the like, depending on the nature of the requirement. Any additional terms and conditions the bidder may demand should also be considered. Finally, the expected price could be weighted so that it carries the appropriate degree of importance relative to the other factors. Service contracts, where a best value selection is made based on the above, are subject to the higher competitive approval levels detailed in the Treasury Board Contracts Directive - see Appendix C. See also the definition of competitive service contracts in Appendix A.
10.7.26 If information on the economic life of the acquisition is obtainable, it is advantageous to include in the criteria a way of comparing operation, maintenance, installation and handling, consumable supplies and other in-use costs. This approach may permit an objective selection of the item most likely to be superior throughout its operating life.
10.7.27 Competing firms should be told the measurement criteria and the weighting assigned to them. Contracting authorities should be aware of successful legal challenges to the contractor selection process. The issue arises from the manner in which evaluation factors are to be used to determine the successful bid. The courts have ruled that the factors and their weighting must be established beforehand and adhered to strictly. They are to be recorded along with the requirements of the contract and included in the bid solicitation. The principle of applying bid criteria or requirements equally to all bidders is part of Canadian contract law and is applicable to both the public as well as the private sectors. Fairness to all prospective contractors and transparency in the award process are imperative.
10.7.28 Proposal competitions in which the price element is not included do not meet the definition of a valid bid. Consequently, the competitive authority dollar levels may not be used when the contract is awarded.
10.7.29 Design competition. For major public works, the architect and the design of the structure should be selected using a predetermined procedure. When the technical problems are within the state of the art, a design competition may be an appropriate preliminary step to selecting a contractor for a design/make or total package procurement.
10.7.30 Non-competitive contracts. When the contracting authority awards a contract under the provision of one or more of the exceptions to the requirement to solicit bids in Section 6 of the Government Contracts Regulations, this decision should be recorded, together with the justification.
10.7.31 In order to demonstrate the requirement for access and openness in government contracting, contracting authorities are encouraged to publish an Advance Contract Award Notice (ACAN) for contracts with pre-identified contractors using electronic bidding methodology. If no statements of capabilities meeting the requirements set out in the ACAN are received within fifteen calendar days, the contract is deemed to be competitive and the higher electronic bidding dollar levels apply.
10.7.32 If, as a consequence of a non-competitive contract award, the availability of specified commodities and services is inadequate or their price is deemed to be excessive, then competition needs to be stimulated. In this circumstance, contracting authorities should cultivate additional suppliers by ensuring that all likely firms have been made aware of and are adequately briefed on the extent and probability of continuing government requirements and given all possible help in the form of information and guidance on specifications, qualification approval, manufacturing technology, and the like. A useful technique is to inform the industry of an anticipated requirement and to request a statement of interest and capability through the use of electronic bidding methodology. If electronic bidding procedures are not feasible or if there is a need to supplement them, an expanded direct solicitation (such as an information letter mailed to a list of potential sources, advertisement of the opportunity in trade publications and the public press, etc.) could also be used.
10.7.33 Qualification of suppliers under the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement. Contracting authorities must ensure that there is no discrimination between foreign or between domestic suppliers when establishing the qualification criteria. The qualifications procedures shall be consistent with the following:
10.7.34 For procurements subject to the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement, contracting authorities shall
10.7.35 Contracting authorities can exclude suppliers on grounds such as bankruptcy or false declarations.
10.7.36 Invitation to participate under the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement. Contracting authorities shall publish an invitation to participate in the appropriate publication for all procurements. The invitation to participate shall take the form of a Notice of Proposed Procurement (NPP) that shall contain the following information:
10.7.37 For procurement subject to NAFTA and WTO-AGP, in the case of selective tendering procedures, a contracting authority that maintains a permanent list of qualified suppliers shall publish annually, in the appropriate publication, a notice containing the following information:
10.7.38 For procurements subject to NAFTA and WTO-AGP, after the publication of an invitation to participate, but before the time set for the opening or receipt of tenders as specified in the notices or the tender documentation, a contracting authority finds that it has become necessary to amend or reissue the notice or tender documentation, the contracting authority shall ensure that the amended or reissued notice or tender documentation is given the same circulation as the original. Any significant information given by a contracting authority to a supplier with respect to particular procurement shall be given simultaneously to all other interested suppliers and sufficiently in advance so as to provide all suppliers concerned adequate time to consider the information and to respond.
10.7.39 Under NAFTA and WTO-AGP, a contracting authority shall allow a supplier that requests to participate in a particular procurement to submit a tender and shall consider the tender. The number of additional suppliers permitted to participate shall be limited only by the efficient operation of the procurement system.
10.7.40 Under NAFTA and WTO-AGP, where a contracting authority does not invite or admit a supplier to tender, the contracting authority shall, on request of the supplier, promptly provide pertinent information concerning its reasons for not doing so.
10.7.41 Call for tenders under the Agreement on Internal Trade. A notice of a call for tenders shall contain at least the following information:
10.7.42 In evaluating tenders, subject to AIT, contracting authorities may take into account not only the submitted price but also quality, quantity, delivery, service, the capacity of the supplier to meet the requirements of the procurement and any other criteria directly related to the procurement. The tender documents shall clearly identify the requirements of the procurement, the criteria that will be used in evaluating bids and the methods of weighting and evaluating the criteria.
10.8.1 Departments must ensure that adequate management controls are in place to protect the integrity of the bidding process and that these management controls ensure receipt, custody, bid opening, and recording are addressed.
10.8.6 A bid or proposal is or non-responsive if it does not meet all the mandatory requirements listed in the Request for Proposal or other solicitation documents and will be rejected.
10.8.7 Bids or proposals that respond to the mandatory requirements but contain a minor aberration may be considered if, in the opinion of the contracting authority's management:
10.8.8 When the bid solicitation requires the submission of bid security, the amount should be determined by the contracting authority in advance. When the appropriate security has been submitted but the bidder subsequently increases the bid price before the stipulated closing date, the contracting authority may allow the bidder reasonable time to supply any additional security required. A reasonable period may also be given to a bidder to resubmit the security deposit in the appropriate instrument if it was not initially done. When a bidder has submitted less than the exact financial security stipulated, the bid will be considered as non-responsive unless, as stated in article 10.8.7 above, the deviation is negligible, or the circumstances in article 10.8.10 below prevail (see also article 12.11.9).
10.8.9 When only one of a number of bids received in response to a competitive bid solicitation is (considered) valid and the contracting authority determines that fair value to the Crown will be obtained, the contract may be awarded to the one valid bidder and considered competitive (See definitions in Appendix A). In determining the fairness of the single valid bid, the following apply:
10.8.10 When only one valid bid has been received, that bidder may also be asked to provide price substantiation. If the information provided is not acceptable to the contracting authority, then price negotiation should take place. If the single bidder does not appear to have the requisite financial stability, it may be in the public interest to require the bidder to submit an appropriate form of security before the bid is considered. Another alternative would be to invite new bids.
10.8.11 In the context of article 10.8.9(b) above, the cost(s) of a work, product or service is the sum of the applicable direct and indirect costs which are, or are to be, reasonably and properly incurred and/or allocated, in the performance of the work or provision of the product or service, less any applicable credits. In ascertaining what constitutes costs, any generally accepted method of determining or estimating costs that is applied consistently and is equitable in the circumstances may be used, including standard costs properly adjusted for applicable variances.
10.8.12 A cost may be considered reasonable if, in nature and amount, it does not exceed that which would be incurred by a prudent person in the conduct of a competitive business. In determining whether a cost element is reasonable, consideration should be given to:
10.8.13 As stated in article 4.2, in assessing bids, the following apply:
10.8.14 Withdrawal of bids. Customarily the federal government allows bids to be modified or withdrawn before the closing time and date provided that the notification is in written form such as registered letter, telex, or facsimile transmissions. As stated in article 4.2, modifications are not acceptable under any circumstances after bid closing. However, if an offer is made in error or contains a significant and demonstrable error that is made known to the contracting authority, the bid may be withdrawn before acceptance. This reflects the principle of contract law that an offer is not binding if it is made in error or contains an error that is made known to the recipient. The government's model bid bond form contains provisions obligating bonding companies to compensate the Crown for higher costs caused by withdrawals after acceptance. Other types of bid security should provide the same protection.
10.8.15 As stated in article 4.2, the payment provision of a bid bond or other bid security will be invoked if the bidder refuses to execute the contract documents or to provide the specified contract security.
10.8.16 Bid protests. Contracting authorities should ensure that protests are resolved quickly and effectively so as not to delay the contracting process. When acting within the scope of its authority and existing statutes and regulations, the contracting authority's action to enter into a contract with a bidder involves the exercise of an administrative power that normally cannot be reviewed by the courts. Consequently, all bid protests, particularly those related to the impartiality of this process, should be referred to senior departmental management for resolution and the resulting decision should be communicated to the concerned or affected parties promptly. Where a bid protest is made pursuant to the provisions of the North American Free Trade Agreement, Agreement on Internal Trade and the World Trade Organization - Agreement on Government Procurement, the Canadian International Trade Tribunal Procurement Inquiry Regulations apply.
10.8.17 Identical bids. If identical low valid bids or proposals are received, 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 deemed appropriate by the contracting authority:
10.8.18 As stated in article 4.2, departments and agencies are to report to the Department of Industry any identical bids where collusion is suspected or any price so unreasonable that it may have been established to lessen competition or eliminate a competitor.
10.8.19 Change in scope of work. When there are changes in the job requirements or in the funds available that reduce the scope of the work, an attempt should be made to negotiate a new price with the successful bidder. If the change in the scope of the work is significant or negotiations cannot be concluded to the satisfaction of the contracting authority, new bids should be invited. For construction contracts, new bids are normally invited from the two lowest bidders on the original bid solicitation. When more than two bidders have bid in the same approximate amounts, consideration should be given to including these firms on the new bid solicitation. For goods and services, it is often the practice to solicit new bids without limiting the field of competition.
10.8.20 If the bidder limits the period of validity of the bid, this should be specified in the offer. When the contracting authority accepts a bid or proposal with some condition e.g., provision of financial security or obtaining security clearance, it may be necessary to establish and specify a period during which the acceptance of the bid remains valid.
10.8.21 Debriefings. Debriefings should be provided to unsuccessful bidders on request and should normally include an outline of the factors and criteria used in the evaluation, while respecting each bidder's right to the confidentiality of specific information.
10.8.22 Forwarding of Tender Documentation by the Entities under the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement. The respective agreements require that in open and selective procedures, contracting authorities shall forward the tender documentation at the request of any supplier participating in the procedure, and shall reply promptly to any reasonable request for explanations relating hereto.
10.8.23 For a procurement subject to NAFTA and WTO-AGP, contracting authorities shall reply promptly to any reasonable request for relevant information submitted by a supplier participating in the tendering procedure, as long as such information does not give that supplier an advantage over its competitors in the procedure for the award of the contract. The following procedures shall be followed in receiving tenders:
10.8.24 The federal government has a strong commitment to serve Canadians better by expanding access to information and services available electronically. It is government policy to establish and manage the use of public key cryptography as a component of the government's common information management and information technology infrastructure and to support electronic alternatives to the use of paper, thereby increasing efficiency and reducing government costs.
11.1.1 Contracting authorities are encouraged to establish and maintain a formal challenge mechanism for all contractual proposals, including those within departmental authority, those sent to the Department of Public Works and Government Services Canada, and those submitted to the Treasury Board. This mechanism could range from a formal central review board to divisional or regional advisory groups, depending on the departmental organization and magnitude of contracting. Decisions made by these review units should be recorded and available for subsequent internal audits and for the periodic audits or evaluations conducted by the Auditor General or by the Treasury Board Secretariat. Departmental officials appointed to review contracts should include the appropriate senior financial officer as the chairperson in all cases. Others should be from disparate program areas to ensure balance. The appropriate senior departmental personnel officer should be included in the review of contracts for the services of individuals, and the appropriate senior materiel officer when materiel or materiel-related services are reviewed. Those in a possible conflict of interest situation are to declare themselves and be replaced. Summaries of the contract review proceedings should be provided regularly to deputy heads so that they can determine whether their delegated signing powers are being properly administered.
11.1.2 The review methodology should address such basics as:
The review mechanism should also be able to determine if the proposed work is actually required. It is possible that other centres of responsibility within a department or some other government agency has already carried out work that will satisfy the requirement. The review should look at more general considerations, depending on the circumstances such as whether the responsibility centre is the appropriate one to handle the work proposed.
11.2.1 Treasury Board approval. The establishment of dollar limits above which Treasury Board authority is required is based on the premise that, at some level of size or complexity, the collective judgement of ministers should be brought to bear upon a decision to award a contract. The Financial Administration Act envisages prescribed ceilings (see sub-section 41(1)) to provide a central mechanism that ensures that appropriated money is spent effectively.
11.2.2 The powers of the Governor in Council to establish contract ceilings have been delegated to the Treasury Board under P.C. 1986-2746, Dec. 4,1986.
11.2.3 The Treasury Board has established and periodically revises the contract dollar levels. These levels reflect the desire to permit contracting authorities to carry out their responsibilities while taking contracting risks and the overall interests of the government into account. Appendix C contains the Treasury Board Contracts Directive which specifies the approved levels above which Treasury Board authority is required before entering into a contract. See Appendix H for how to prepare requests for contract approvals, including submissions to the Treasury Board and applications to internal departmental authorities. For the inclusion in submissions of foreseeable amendments to contracts, see article 12.9.3. The total value of any contract should include all related costs e.g., profit, overhead, administration, travel, taxes, etc.
11.2.4 The Treasury Board Contracts Directive distinguishes between competitive and non-competitive contracts for determining the contract approval levels delegated to contracting authorities. It also differentiates between the traditional and electronic bidding processes for competitive procurement of goods (where authority has been delegated by the Minister of Public Works and Government Services) and services. By using electronic bidding methodology, a contracting authority increases its authority to enter into and amend a contract. For contracts that do not fall within the definition of competitive contracts, the non-competitive dollar levels of authority apply.
11.2.5 In many cases, prior approval of the program and related funding is sufficient for departments to proceed to contract. However, program approval does not carry with it implicit authority to enter into contract and, when significant risks and issues are involved, specific review and approval by Treasury Board should be obtained, even though the value of the contract is below the established limit. Treasury Board approval may also be requested for contracts that involve a substantial expenditure or unusual circumstances of general public interest. In addition, Treasury Board participation may be advisable in certain situations where interdepartmental responsibilities are being co-ordinated, when large follow-on contracts may be required, or where other national policies and objectives are related.
11.2.6 Most contracts handled by the common service agencies and departments with major contracting activities are recognized in the Treasury Board Contracts Directive by the higher levels of authority granted. The various dollar levels are reviewed periodically and adjusted to serve the best interests of the government. Special dollar levels may be prescribed by the Treasury Board for specific projects or programs for unique operational needs. The performance of contracting authorities in the above situations will influence decisions on levels of authority.
11.2.7 Contract splitting. Contracting authorities must not split contracts or contract amendments in order to avoid obtaining either the approval required by statute, the Treasury Board Contracts Directive or appropriate management approval within the department or agency.
11.2.8 Requirements for specific Treasury Board approval. As specified in Section 4.1.6, Treasury Board approval is required prior to entering into a contract or an amendment with a dollar value that exceeds the limits prescribed in the Treasury Board Contracts Directive. Other situations where prior Treasury Board approval should be sought includes, but is not limited to:
11.2.9 Emergency contracting. Contracting authorities may enter into contracts in response to a pressing emergency situation, as provided for in Part III of the Treasury Board Contracts Directive (see Appendix C). In circumstances deemed as a pressing emergency as defined in Appendix A, contract proposals that would normally require prior Treasury Board approval may be awarded and amended without the approval of the Treasury Board up to a total value (including any amendments) of $1,000,000. The amending authority offers contracting authorities the possibility of entering immediately into lower dollar value contracts to address the emergency situation and then amending them if necessary, once the scope of work involved is better defined. If time permits, the authorization of the Treasury Board should always be sought if the proposed contract expenditure exceeds the approved contracting authority level.
As suggested in paragraph 11.2.10, exercise of emergency contract authority should be limited to the most senior delegated official available.
As stated in the Policy requirements, use of the emergency contracting authority is to be explained in a report to the Treasury Board Secretariat within60 days of the work being authorized or initiated. This report should detail the circumstances, the type and value of the contract awarded, whether it was possible to seek bids, and the delegation level at which the use of the emergency authority was approved. Contracting authorities should institute appropriate internal guidelines to ensure that the emergency authority is not abused.
11.2.10 Delegation of contracting authority. Contracting authorities should establish some differentiation of authority levels within the internal delegation of authority. Higher expenditures, complex situations, or very sensitive contracts should receive approval by a more senior level.
11.2.11 Once the contract proposal is approved by the appropriate authority, the actual contract documents may be executed.
11.2.12 Ratification of contracts. It is recognized that a contracting authority may have inadvertently entered into a contract without previously having obtained the required authority from the Treasury Board as a result of
In either of the preceding circumstances, if a contracting authority enters into a contract without obtaining the authority of the Treasury Board when such authority should have been obtained, a submission seeking ratification by the Treasury Board of the contracting or administrative action is to be made as soon as possible (preferably within 60 days of the work being authorized or initiated by the contracting authority). This submission for ratification of the contracting action should
As stipulated in article 4.2, Related requirements, the government Security Policy is to be applied equally to procurement contracts as it is to internal operations. Where contracts or the bid solicitation process require access to Designated or Classified information by the contractor or where such contracts or bidding process involve the storage and/or processing of designated or classified information on the contractors premises, when it is the user department itself which is the contracting authority, consideration should be given to seeking guidance and/or assistance from common service organizations or contracting through a common service organization that has the resources to ensure compliance with the security policy and standards.
11.4.1 Departments and agencies may, pursuant to section 3 of the Contracting Policy, arrange transactions that involve the transfer of goods, services or real property between departments, Crown Corporations, provinces, municipalities and the Territories. Transactions between the federal contracting authorities and provincial or municipal entities are not contracts pursuant to the Government Contracts Regulations or the Contracting Policy. These kinds of arrangements are usually covered in joint agreements.
12.1.1 Contracting authorities should manage and administer their contracts in a manner that ensures that they are successfully executed in accordance with the agreed terms of time, cost and performance.
12.1.2 Contract Documentation The terms and conditions of any contract issued pursuant to the Government Contracts Regulations and this Contracting Policy should be formulated in writing. This includes but is not limited to hard copy documents, facsimile copies or other electronic means.
12.1.3 Sanctions. If the contracting policy is ignored or if contracting practices or contract administration are not acceptable, the Treasury Board may direct that sanctions be imposed either on the contracting authority (the institution) or on the officials responsible. Sanctions may include any or all of the following:
Officials responsible for the management of contracts should be made aware of possible institutional or personal sanctions.
12.1.4 Canadian International Trade Tribunal. NAFTA, WTO-AGP and AIT require that members to the agreements maintain an independent bid challenge authority. The Canadian International Trade Tribunal (CITT) has been designated as the bid challenge authority for Canada for all three agreements. A potential supplier may file a complaint concerning a procurement practice to the CITT if the supplier is concerned that any part of the procurement process was unfair or discriminatory under the three trade agreements. In dealing with a complaint, the Tribunal must determine whether the government department or agency responsible for the procurement under review has complied with the requirements of NAFTA, WTO-AGP and AIT and such other procedural requirements, as prescribed in the Canadian International Trade Tribunal Procurement Inquiry Regulations. Information on the CITT and its complaint and inquiry process, are contained in the CITT publication Procurement Review Process - A Descriptive Guide. The CITT has the statutory authority to award the complainant reasonable costs associated with responding to the solicitation and filing the complaint. In addition, the CITT is authorized to:
12.2.1 The Financial Administration Act. Sections 32, 33 and 34 of the Financial Administration Act prescribes various financial controls in contract expenditures. Usually the financial aspects of contract administration are the responsibility of financial managers, but contract administrators should have a basic knowledge of the law and the financial management policies of the government. Much of this information is set out in the Comptrollership volume of the Treasury Board Manual issued by the Treasury Board Secretariat.
12.2.2 Advance Payments. Section 8 of the Government Contracts Regulations permits advance payments. If advance payment clauses are to be included in contracts, they must adhere to the principles of parliamentary control, the requirements of the Financial Administration Act(paragraph 33(3)(a)), and the provisions of the appropriation Acts themselves. Where contract approval is within departmental authority, advance payments can be approved by the department. However, as required by the Regulations, where contract approval is beyond departmental authority, advance payments require Treasury Board approval.
12.2.3 Preconditions For Using Advance Payments. Advance payments should be considered only in extraordinary circumstances, that is, when they are considered essential to program objectives. Contractors are expected to finance their work from their reserves or through commercial financing based on the anticipated payments from the contracting authority for full or partial completion of the work. Contracting authorities should consider the financing and interest costs to the Crown, as well as the method of recovery, when negotiating advance payments and should evaluate these costs when comparing other alternatives.
12.2.4 Further to the preceding, contracting authorities should consider including advance or progress payments in a contract only if:
Advance payments are not necessarily warranted even if the preceding preconditions are met. While progress payments may be more common, advance payments are normally very much the exception.
12.2.5 Timing and Amount of Advance Payments. Except in extraordinary circumstances, in accordance with the principles of annual appropriations and the basis on which funds are appropriated by Parliament,
12.2.6 Payments. As required by article 4.2, Related requirements, work performed or goods received under a contract are to be paid for in accordance with the government's payment on due date policy on the payment of accounts (see the Comptrollership policies) as follows:
Payments are scheduled so that they are made as close as possible to, but no later than, the due date. Except where statutes, contracts or fee schedules approved by federal regulatory agencies provide otherwise:
12.2.7 The terms of the contract, where applicable, should state the dates when interim and progress payments are due. Progress payments should normally be made within the due date except where other terms are agreed to in the contract.
12.2.8 Interest is computed by multiplying the amount due by the applicable rate (see article 12.2.9 below) and the time period expressed as a fraction of a year in days, i.e., the number of days in the period for which interest is payable over a denominator of 365.
12.2.9 The rate of interest payable is the average daily Bank of Canada rate for the month preceding the current month plus 3%.
12.2.10 Exceptions. When it is more advantageous to the government, because of factors such as discounts, to pay accounts earlier, or when the terms and conditions for payment and interest under a contract are different from the 30-day standard, the standard payment period may be set aside.
12.2.11 Interest is not paid on an interim basis, on interest charges, or on advance payments that are late.
12.2.12 When goods or services are not considered to be in accordance with the contract, certification under Section 34 of the Financial Administration Act cannot be given. As required by the payment on due date policy, departments must notify suppliers within 15 days if the contract performance is disputed. The30 day payment period begins upon receipt of the replacement goods or services or the revised invoice or additional information.
12.3.1 Procurement files shall be established and structured to facilitate management oversight with a complete audit trail that contains contracting details related to relevant communications and decisions including the identification of involved officials and contracting approval authorities.
12.3.2 Under the North American Free Trade Organization, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade, Contracting authorities shall guarantee that complete documentation and records, including a signed and dated record of all communications with suppliers, are maintained to allow verification by the Canadian International Trade Tribunal that the procurement process was carried out in accordance with the agreements.
12.4.1 All contract documents should contain conditions and clauses that reflect the requirements of the work to be produced or supplied under the contract. In addition, certain clauses are applicable for all contracts. As stated in article 4.2, Related requirements, other necessary clauses will include: a provision for paying interest when the Crown causes a delay in paying the contractor; a clause to permit the Crown to pay the Goods and Services Tax or the Harmonized Sales Tax; a clause covering possible conflict of interest situations; and, if relevant, a clause addressing intellectual property issues, including the ownership of intellectual property. An appropriate termination clause is especially important so that the contracting authority may end the contract if, for example, there is a change in the government's priorities or a cutback in funding. The Department of Justice representative in each department or agency should be consulted about contract terms.
12.4.2 As stated in article 4.2, the Standard Government Construction Contract has been prescribed for all construction contracts that exceed $100,000. The basic policy governing the principles and expression of the Standard Government Construction Contract is the prerogative of the Treasury Board. However, the style and content are the responsibility of the Public Works and Government Services Canada.
12.4.3 When the Crown or the contracting authority is referred to in a contract, the proper designation is "Her Majesty the Queen in right of Canada, referred to in the contract as "Her Majesty," represented by the Minister of (the legal name of the contracting authority) referred to in the contract as the "Minister". "The applied titles of departments or agencies should not be used. Legal and applied titles for departments and agencies are set out in "Titles of Organizations", Federal Identity Program, issued by Treasury Board.
12.5.1 The Criminal Code of Canada, Section 748, Sub-Section 3 prohibits anyone who has been convicted of an offence under:
from holding public office, contracting with the government or receiving a benefit from a government contract, unless the Governor in Council has restored (in whole or in part) these capabilities to the individual or the individual has received a pardon.
12.5.2 As stated in article 4.2, Related requirements, contracts are subject to the screening requirements of the Security Policy of the Government of Canada. The contracting authority is responsible for ensuring compliance. Contract administrators, therefore, must ensure that any necessary security clearances and/or reliability checks are carried out so that contractors and their employees, where applicable, are acceptable under the policy (see the Security Policy of the Government of Canada issued by Treasury Board).
12.5.3 As required by the Prime Minister's Conflict of Interest and Post Employment Code for Public Office Holders, September 1985, contracting authorities are to ensure that all requirements are met. These include inserting clauses, approved by Treasury Board, into every contract entered into by the Crown. They are contained in Appendix G.
12.5.4 Section 80 of the Financial Administration Act makes it an indictable offence if any regulations under the Act, including the Government Contracts Regulations, are violated. This section also applies to officers or employees who know of violations and neglect to report them. Section 81 makes the offering of bribes to influence the decisions of officials an indictable offence.
12.5.5 As required by the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade, contracting authorities must ensure that all requirements are met. Failure to comply with the agreements can result in an challenge under the Canadian International Trade Tribunal.
12.6.1 The management and administration of contracts involves many activities to ensure the fulfillment of a contract. This also covers those activities or events that can alter or disrupt the performance of a contract e.g., default of a contractor, disputes and contract amendments. This policy applies equally well to those other activities associated with the management and administration of contracts.
12.6.2 Whenever the satisfactory fulfillment of a contract is jeopardized, contracting authorities should take the necessary steps to serve and protect the interests of the Crown in meeting the terms of the contract, and then to protect (where appropriate) the interests of other parties involved in the contract. Contract disputes should be dealt with fairly and as promptly as possible. Contract amendments should be made with the same care that went into the original contract.
12.7.1 In every case of the impending or actual bankruptcy of a contractor, the contracting authority should contact the departmental legal adviser and ensure that any proposed action will not prejudice the Crown's legal position. When the bankrupt contractor is a company resident outside Canada, action should be taken in accordance with the bankruptcy law of the country concerned. Legal advice should be obtained locally, if necessary.
12.7.2 As stated in article 4.2, Related requirements, where a contractor has provided contract financial security in the form of a bill of exchange, a government-guaranteed bond, or a letter of credit, the contracting authority is to redeem these securities to satisfy the requirements of the contract. Any excess amounts are returned to the contractor after all federal claims have been satisfied.
12.7.3 When a defaulting contractor has provided financial security in the form of a surety performance bond or a surety payment bond, the bonding company becomes liable, up to the amount of and in accordance with the terms and conditions of the bond. In the case of a performance bond, the bonding company's liability is only to the Crown; under a payment bond, claims may be made on the bonding company by all those who have a direct contract with the principal contractor or a sub-contractor for the supply of labour, material or services.
12.7.4 Claims by Sub-subcontractors. During the course of a construction contract or when it is completed, a second-tier claimant, either a sub-subcontractor or a third level supplier, may make a claim against the prime contractor. When one or more such claims are made against the prime contractor, the posting of a claimant's payment bond by the prime contractor will permit regular payments under the contract while the disputes are being settled between the various parties.
12.7.5 When the contract of a defaulting contractor is secured by surety bonds, the bonding company:
12.7.6 In case of bankruptcy, the claims of the Trustee in Bankruptcy for any amounts due and payable by the contracting authority to the contractor at the date of its bankruptcy are subject to the above conditions.
12.7.7 As required in article 4.2.1 recognition is to be given to miscellaneous, indirect contractual obligations of a contractor and its sub-contractors (including suppliers) that arise from assessments by agencies of the government (e.g., Employment Insurance, Canada Pension Plan contributions, wages due the employees or by agencies of other governments in cases where a precedent of mutual cooperation has been established (e.g., workers' compensation acts)).
12.7.8 Authorities concerned should follow closely any bankruptcy proceedings involving contractors with whom they are involved, promptly submit any claims to the trustee and ensure these are acknowledged.
12.7.9 If the contractor must be removed from the job on account of bankruptcy or other default, action should be taken under the appropriate terms of the contract. If the contract is secured by surety bonds, the contract itself should not be terminated because this would also terminate the existing contractual relationship with the bonding company.
12.7.10 As stated in article 4.2, contracting authorities are reminded of their duty to pursue the rights of the Crown as a creditor under the Bankruptcy Act:
12.7.11 Contracting authorities should obtain a fair reduction in the contract price for less-than-specified performance.
12.8.1 The key factor when disputes arise is the expeditious handling of the disagreement. This is particularly important because prolonged disputes can delay performance as defined in the contract and payment to the contractor. As such, the Minister of Justice has committed to working with client departments to introduce Dispute Resolution (DR) clauses into the various contracts to which the Government is a party. To this end, the Directive Concerning the Use of Dispute Resolution Clauses in Contracts (the Directive) has been issued by the Department of Justice. The Directive states that, in advising client departments and in preparing contracts for client departments, Justice legal practitioners must make every effort to insert dispute resolution clauses into contracts, where appropriate. Dispute resolution clauses may range from provisions for resolution of disputes as they arise, by way of structured negotiations, to other alternatives such as mediation and arbitration. Any inquiries regarding the Directive Concerning Dispute Resolution policy or the appropriate clauses should be made to your departmental legal services unit of the Department of Justice.
12.8.2 In a contract dispute, the decisions of the contracting authority made after the contract has been awarded, are challengeable in court. Under North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, the Agreement on Internal Trade, the bidding process can be challenged at the Canadian International Trade Tribunal. It is important, therefore, that legal advisers be consulted and that the actions of a contracting authority and its decisions on a contractor's claim be defensible in court.
12.8.3 Negotiations. Efforts should be made to resolve disputes as they arise, first by negotiating with the contractor. This can be through discussion between representatives of the contractor and the contracting authority or by a more formal review established by the department or agency. Contracting authorities should develop systems that ensure:
12.8.4 Mediation. When a dispute has not been resolved by negotiation, mediation by a third party may be used when it is acceptable to both sides. Mediation should conform to the following principles:
12.8.5 Arbitration. Arbitration that is binding on both parties is an alternative to litigation, provided that both the contractor and the contracting authority agree to it. The agreement to allow for its use may be inserted in a contract at the outset, or it may be negotiated between the parties at the time a dispute arises. If allowance is to be made for, or there is the prospect of arbitration, the contracting authorities should first discuss the details of it with their legal advisor. This advisor has guidelines from the Senior Assistant Deputy Minister, Legal Services, Commercial and Property Law, Department of Justice, covering the format (including procedures) and contents of an arbitration agreement and of any arbitration clause to be included in a contract.
12.8.6 Contracting authorities, with the advice of their legal advisor, may refer all questions of fact and certain questions of law to arbitration without the formal concurrence of the Department of Justice. Treasury Board approval is not required to use arbitration. Some of the questions of law which can now be the subject of arbitration include:
12.8.9 Legal Process. When dispute resolution is pursued through arbitration, the parties appear before an Arbitration Tribunal, which takes the place of a court and makes an "award." While an arbitration tribunal has no authority to enforce its award, the Commercial Arbitration Code (Chapter VIII, Article 35) provides that such an award will be recognized as binding, and upon application in writing to a competent Canadian court will be enforced by a judgment of that court. Because the Crown Liability and Proceedings Act (Sections 29 and 30) prevents such a judgment from being executed against the Crown, in these cases the court also issues a Certificate of Judgment against the Crown, which obligates the Minister of Finance to authorize the payment out of the Consolidated Revenue Fund of any money awarded by the judgment.
12.8.10 Costs and Disbursements. In preparing for arbitration, any expenses incurred by the contracting authority are a charge to a departmental appropriation, whether the eventual decision is rendered for or against the contracting authority.
12.8.11 When the Minister of Finance receives a Certificate of Judgment against the Crown and authorizes the payment out of the Consolidated Revenue Fund of any money awarded by a court judgment, this payment will incorporate any costs determined and levied by the arbitration tribunal and included in its award. In this context, contracting authorities should note that the cost associated with the actual conduct of arbitration is normally shared equally by the contracting authority and the contractor. Contracting authorities should also understand that the money paid on their behalf from the Consolidated Revenue Fund will eventually be accounted for, either by transferring funds from a departmental appropriation or by seeking supplementary funding. Any payment of an award to a contractor by the contracting authority as a result of an arbitration decision is to be reported annually in the Public Accounts; this will ensure both visibility and accountability.
12.8.12 Where a contracting authority terminates arbitration proceedings and agrees to pay a contractor without the necessity of an arbitral award, the money for such a payment will have to be taken from a departmental appropriation. In some instances, particularly where the interpretation of a contract is involved, this is accomplished by simply amending the amount allotted for the contract. It is the responsibility of the contracting authority to ensure that any such payment is within its amending authority for contracts as set out in Schedules 1 through 4 of Appendix C, otherwise the contracting authority is required to obtain Treasury Board approval for any such payments in excess of this amending authority.
12.8.13 Revenues. The contracting authority should collect or enforce payment of an award to the Crown consequent to the arbitration decision in accordance with the "Comptrollership" volume of the Treasury Board Manual. The money collected, including any insurance proceeds, should be deposited to the credit of the particular project, a departmental appropriation or the Consolidated Revenue Fund, as appropriate. The Standard Federal Government Construction Contract form describes how to deal with insurance proceeds arising from construction contracts.
12.8.14 Litigation. An alternative to arbitration is, of course, litigation. By convention, matters referred to arbitration are not then subject to litigation unless the arbitration was defective in form or content. Where the contractor or contracting authority decides that litigation should take place, the Department of Justice assumes responsibility for subsequent action in accordance with the Department of Justice Act.
12.9.1 Even though the Contracts Directive allows for amendments, contracts should not be amended unless such amendments are in the best interest of the government, because they save dollars or time, or because they facilitate the attainment of the primary objective of the contract. Work definitions should be carefully developed. Contracts should then be properly administered to avoid unanticipated amendments except to change the scope of the work. Amendments to existing contracts often call for more administrative work and little can be done through competition to encourage the contractor to do additional work or respond to changes at the lowest possible cost.
12.9.2 Every effort should be made to avoid:
12.9.3 Many contract amendments are, in fact, prudent. Often contract amendments or probable amendments can be foreseen when the initial contract is contemplated. In such cases, the proposal section of the approval document should indicate the likelihood of such amendments, including a maximum cost limit. Where Treasury Board or managerial approval is required and the original contract proposal to the Treasury Board or departmental management has been approved, subsequent amendments do not require the same level of approval as long as they are within the original intent of the proposal and applicable amendment authorities.
12.9.4 Extra costs. Departments and agencies are advised to include clauses for cost overruns in contracts. In situations where, the Crown has received no additional or apparent benefit and there is uncertainty whether a legal liability exists under the terms of the contract. Legal advice should be obtained as to whether the extra costs may be considered as an amendment to the contract. Additional payments should, in any event, cover only the additional reasonable costs incurred by the contractor and should be considered only if the circumstances were beyond the contractor's control and the contractor was without fault or negligence and could not reasonably have foreseen the actual circumstances at the time the contract was entered into. Each case will be treated on its own merits with payments allowed within delegated authorities and appropriate approvals sought in the event that the changes exceed authorities.
12.10.1 Subsection 41(2) of the Financial Administration Act states that the Government Contracts Regulations do not apply to federal or provincial Crown corporations unless the legislation of the Crown corporation specifically requires that it be subject to Subsection 41(1) of the Act. Consequently, the Treasury Board Contracts Directive and relevant policies do not apply to Crown corporations. Arrangements between departments and Crown corporations cannot be contracts in a strictly legal sense (the Crown cannot contract with itself).
12.10.3 Agency status. When a department or agency has been designated as an "agent" of a Crown corporation, the contracting procedures and authority limits of the contracting authority continue to apply. As stated in article 4.2, Related requirements, the contracting authority cannot assume the powers of a Crown Corporation even when undertaking work on its behalf. In practice, the department or the Crown corporation will seek Treasury Board authority when a proposed contract exceeds the limits prescribed in the Contracts Directive.
12.10.4 Contractual arrangements with other governments. There are situations where contracting authorities obtain goods and services from other government entities such as provinces, municipalities and provincial Crown corporations. There are also times when the federal government co-operates with a provincial or municipal body to carry out a project. Usually, these arrangements are embodied in federal-provincial agreements, normally governed by legislation or related to the overall mandate of the federal authority. When this formal federal-provincial relationship is not applicable, a contractual relationship between the federal contracting authority and the other government entity may be appropriate. As called for by article 4.2, all contracting policies, including the dollar limits for contracting (Appendix C),apply to the federal organization.
12.11.1 General. Part II of the Government Contracts Regulations deals with securing the due performance of contracts. The contracting authority is to determine the need for and amount of financial security, subject to the Regulations, policies and Related requirements.
12.11.2 The following is the policy on financial security and the use of insurance in contracting. For more details, see Appendix R which contains the Policy on the Use of Standby Letters of Credit as an Alternative to Bid or Contract Security for Federal Government Contracts.
12.11.3 Financial security. The various forms of financial security exist to ensure that the contractor's obligations under the contract are carried out, to protect the interests of subcontractors, sub-subcontractors and suppliers, and to protect the Crown against loss should a low bidder fail to enter into a contract. The principal traditional techniques are holdbacks, security deposits and surety bonds. When security is obtained, contracting authorities will apply the procedures for the handling of bonds and security deposits set out in the Government Contracts Regulations.
12.11.4 Form and amount of security. The bidder or contractor has the option to submit a security deposit in the form he or she wishes to provide, however, the following criteria can be used as a guide to determine the form and amount of security:
As specified in the definitions in the Government Contracts Regulations, a security deposit may be a bill of exchange payable to the Receiver General and certified by an approved financial institution on itself, a government guaranteed bond which is convertible to cash, or any other form of security acceptable to the contracting authority and approved by the Treasury Board. The only other forms of security that have been approved for general use are bid and contract surety bonds and claimant's payment bonds issued by acceptable bonding companies and irrevocable standby letters of credit which have been issued by a financial institution which is a member of the Canadian Payments Association.
Contracting Authorities should not specify in the request for proposals or tender call the type of security to be submitted.
12.11.5 Holdbacks. Holdbacks serve two purposes:
Negotiated holdbacks should be large enough and last long enough to ensure that all contractual requirements can be met. This can be determined by assessing the firm's financial capability, performance record, payment record, markets or industry volatility and the degree of risk inherent in the work.
12.11.6 Security deposits. The contracting authority determines the amount of the deposit required and ensures that the actual deposit is acceptable under the Government Contracts Regulations (see Part II of the Regulations, sections 10 to 17, concerning the procedures governing these instruments. See also the Comptrollership policies. When cash, certified cheques, other bills of exchange, letters of credit, or government-guaranteed bonds are submitted as contract security, the contracting authority usually specifies a minimum of 10% of the value of the contract. Surety bonds are usually required to have a total value of 100% of the value of the contract. In construction contracts, the amount of security provided by surety bonds is usually 50% of the total value of the contract in a performance bond, 50% of the total value of the contract in a labour and material payment bond, and the total value of the claims in a claimant's payment bond. When government guaranteed bonds a resubmitted as security, their value should be current value, not necessarily face value.
12.11.7 Surety bonds. If surety bonds are proposed by the bidder or contractor and are acceptable to the contracting authority, the appropriate model bond form should be used for consistency and uniformity. Model forms for bid bonds, performance bonds and payment bonds have been approved by Treasury Board for use in construction contracting and are shown in Appendix S. A list of insurance companies whose bonds (regardless of purpose) are accepted by the government is contained in Appendix L, which is revised as required.
12.11.8 Bid security. The amount required as bid security is also determined by the contracting authority as guided by the traditions or customs generally followed in the type of contracting being undertaken. For construction contracts the following bid and contract security is usually requested by the contracting authority:
12.11.9 Normally, neither a bid bond nor a security deposit protects against the withdrawal of an offer before its acceptance, unless the offer is made under seal. The model bid bond form contains a provision obligating the bonding company to compensate the Crown for higher costs in case of withdrawal, but does not provide a basis for legally enforcing entry into the contract. Where use of the model form is not appropriate or where contracting authorities judge it to be in the public interest to require the additional protection of offers made under seal, assistance of legal officers should be sought in preparing bidding documents. (The seal concept does not apply in Quebec, but the bidder who undertakes to keep an offer open for a specified period of time cannot withdraw the offer without becoming exposed to a damage claim.) If a security deposit is made, withdrawal of an unsealed tender before acceptance entitles the tenderer to the return of the deposit.
12.11.10 Provision for damages or penalty payments. A clause referring to provisions for damages or penalties, where applicable, should be included in contracts. Legal advice should be sought concerning the types of damages or penalties which could be included and wording of the clause.
12.12.1 Contractors are responsible for ensuring that they manage and have relevant financial protection against the risks to which they are exposed, especially those over which they have control. Consequently, the general policy of the government is not to indemnify contractors against such risks. Normally, therefore, a general condition of every contract is that the contractors indemnify and save the Crown harmless from all manner of claims and damages. As commercial insurance is one option available to and frequently used by responsible contractors for this purpose, it should always be understood that, in the first instance, insurance is for the protection of contractors in support of their potential liability to indemnify the Crown and others, and only ultimately for the protection of the Crown.
12.12.2 Because the cost of insurance is normally included in prices and failure to carry adequate insurance could jeopardize performance, contracting authorities should satisfy themselves that contractors make prudent use of insurance. Contractors should not procure insurance on risks that are the responsibility of the government unless the respective responsibilities are so commingled that they are indistinguishable. However, when the Crown has acknowledged, or elected to assume the risk on a predetermined or case-by-case basis, especially when the risks are under the control of the government, e.g., contractors' property in the care, custody and control of the Crown, such risks may be self-underwritten by the government.
12.12.3 Contracting authorities should obtain an opinion on liability from their legal advisers and refer to the appropriate Treasury Board directives on risk management when contracts or amendments are contemplated.
13.1.1 This section sets out Treasury Board policy for construction contracts.
13.1.2 Bidding. Section 7 of the Government Contracts Regulations does not specify how bids for construction contracts should be obtained. However, departments should give public notice for construction contract bids over $60,000.
13.2.1 The standard federal construction contract form should be used for all construction contracts over $100,000 except those which, in the judgment of the contracting authority, must be modified to meet special circumstances. The principles and policies expressed in the Standard Construction contract are the prerogative of the Treasury Board. However, the style and content of the Standard Construction contract are the responsibility of the Department of Public Works and Government Services Canada.
13.3.1 This part sets out mediation guidelines.
13.3.2 The mediator's role is to make recommendations on the degree of liability and the amount of any damages. Since the Crown's liability, if any, under the contract is a legal question, departments should consult their legal services before deciding to go to mediation.
13.3.3 A single mediator, rather than a panel, should be appointed wherever possible because it generally results in a more expeditious and economical mediation service. The mediator should be acceptable to both the contracting department and the contractor. Mediators who have knowledge of construction practices and contracts, as well as experience in claims analysis, should be considered.
13.3.4 The "Mediation Agreement" should give the mediator authority to form opinions, make findings, and prepare recommendations about the matter(s) in dispute. The process should not be subject to judicial procedures such as rules of evidence, and the mediator should be allowed reasonable access to information and to employees of both the Crown and the contractor.
13.3.5 The "Mediation Agreement" should make provision for the mediator to:
13.3.6 The mediator may hold hearings at times and places acceptable to the parties and the mediator. If the parties cannot agree, the mediator may, in the interest of due diligence, set any necessary times and locations.
13.3.7 The parties should not be represented by legal counsel at any hearings held by a mediator. If either party wishes to be represented by legal counsel, litigation or arbitration should then be considered.
13.3.8 If either party retains independent experts, the mediator may hear these experts in the presence of the parties and should allow a rebuttal.
13.3.9 Submissions should be made to the mediator in accordance with the following provisions:
13.3.10 The mediator's fees are to be agreed upon before appointment. Any agreement should provide for reimbursement of travel expenses in accordance with the Treasury Board Travel Policy, and of other reasonable costs incurred during mediation. Provision may also be made for the mediator to obtain expert assistance with the approval of the parties to the contract.
13.3.11 If a party elects to obtain independent expert assistance, that party bears the full costs.
13.3.12 All fees and costs incurred by the mediator are to be shared equally by the parties.
14.1.1 This section sets out the Treasury Board policy for goods contracts.
14.1.2 Bidding. Section 7 of the Government Contracts Regulations permits the contracting authority to determine the appropriate bidding methodology. This may include giving public notice, for example, by means of electronic bidding methodology or solicitation of bids from suppliers on a list representative of the suppliers of the required goods. All requirements for goods that are subject to the provisions of the North American Free Trade Agreement and the World Trade Organisation - Agreement on Government Procurement must be advertised in the Government Business Opportunities publication and using electronic bidding. All requirements for goods that are subject to the provisions of the Agreement on Internal Trade must be published on the electronic bidding system.
14.1.3 Authority to enter into goods contracts. The Department of Public Works and Government Services Act, Statutes of Canada, 1996, Chapter 16,Section 6, gives the Minister of Public Works and Government Services exclusive authority to acquire materiel or goods.
14.2.1 According to Section 8 of the Department of Public Works and Government Services Act, the Minister of Public Works and Government Services may delegate "... any of the Minister's powers, duties or functions under this Act to an appropriate minister for any period and under any terms and conditions that the Minister considers suitable."
14.2.4 The dollar limits in the Treasury Board Contracts Directive, as well as all policies and guidelines concerning the acquisition of materiel, apply only after a contracting authority has received appropriate procurement authority from the Minister of Public Works and Government Services.
14.2.5 The management of materiel is the responsibility of user departments. Policies governing materiel management, including EDP materiel, are contained in the appropriate Treasury Board policies.
15.1.1 With the coming into force of the Federal Real Property Act and Regulations and the consequent related amendment to the Government Contracts Regulations, both leases as well as contracts for the fit-up of an office or residential accommodation, where such contracts are part of a transaction done under the Federal Real Property Act or its Regulations, are excluded from the ambit of the Government Contracts Regulations and the government's Contracting Policy.
15.1.2 All enquiries and questions concerning real property management, including leases and other matters covered by the Federal Real Property Act and its Regulations, may be directed to the Real Property Management Division, Comptrollership Branch, Treasury Board Secretariat.
16.1.1 This section sets out the Treasury Board policy for service contracts.
16.1.2 Statement of work. The statement of work or requirements description should clearly describe the work to be carried out, the objectives to be attained and the time frame. It should be:
16.1.3 The statement of work should identify the specific stages of the work, their sequence, their relationship to the overall work in general and to each other in particular. The type, magnitude and complexity of the work will determine the degree of detail required.
The following elements may be included as applicable:
16.1.4 Bidding. Section 5 of the Government Contracts Regulations requires that bids be solicited before contracts are awarded. This may include giving public notice, for example by means of the electronic bidding methodology, public notice in advertisements in trade publications and newspapers, or solicitation of bids from suppliers on a list representative of the suppliers of the required services. Section 6 of the Regulations describes when the bidding requirement may be set aside. Paragraphs 6(b)(ii) and (iii) apply specifically to service contracts. Although provision is made for non-competitive procurement of services, an exception to the general government policy and practice of competitive solicitation should not be necessary in these situations. Contracting authorities may use an Advance Contract Award Notice (ACAN) to satisfy the requirement for competition, which will then allow the use of the higher competitive contracting authority levels if there are no valid challenges to the notice.
16.1.5 Contracting for services has traditionally been accepted as an effective way to meet unexpected fluctuations in workload, to acquire special expertise not available in the Public Service, or to fill in for public servants during temporary absences in certain circumstances. At the same time, excessive or improper contracting for services can result in circumvention of government legislation, regulations and policies covering such matters as the merit principle and bilingualism. As stipulated in article 4.2, Related requirements, contracting authorities are to avoid any contracting situation that would be contrary to or conflict with the Public Service Employment Act and common law principles dealing with master-servant relationships.
16.1.6 As stated in clause 4.2, Related requirements, contracts for the services of former government officials are to bear the closest public scrutiny and reflect fairness in the spending of public funds. Contracting authorities are expected to exercise extreme discretion when contracting with former government officials to ensure that the public interest will not suffer and the Crown will not be criticized. While contracts with former employees may be cost effective, the public perception that these individuals have priority over individuals who are not former public servants should be corrected. Because of its transparency, electronic bidding is an excellent vehicle by which contracting authorities can obtain bids or announce proposed directed contract awards with former public servants.
16.1.7 Categories of service contracts. Distinction has heretofore been made between "consulting" and "non-consulting" service contracts. This differentiation has lost its effectiveness and has been changed so that there is only one category, "service contract." The contracting authority levels have subsequently been adjusted and the generally higher levels for the former non-consulting service contracts now apply to all service contracts (refer to Appendix C for greater detail).
16.2.1 The goal of this policy is to explain the difference between contracting for the services of individuals and Public Service employment. It outlines how to avoid entering into contracts of services with the Crown which create an employer-employee relationship, and how to avoid conflicting with staffing legislation. A contract of service results in the establishment of employee-related benefits, which include, for example, health and dental care, long-term disability coverage, government pensions, Employment Insurance, Canada Pension Plan and income tax source deductions. Factors that may create an employer-employee relationship include the degree of supervision; provision of working space and equipment; type of work (i.e. is the contractor doing the same work as employees); and basis of payment and benefits.
16.2.2 The Public Service consists of the positions in departments and other government entities that are listed in Schedule I of the Public Service Staff Relations Act. Part I of the Schedule, which lists those positions for which the Treasury Board is employer, represents the vast majority of Public Service employees. Part II of the Schedule lists "separate employers," that is, entities that establish their own terms and conditions of employment.
16.2.3 Employment in the Public Service is generally determined according to a statutory regime. In particular, employment in that part of the Public Service for which the Treasury Board is employer is governed by three statutes:
16.2.4 The Supreme Court of Canada has ruled that, for labour relations purposes (i.e. whether an individual is an employee for collective bargaining purposes), a person can be employed in that part of the Public Service for which the Treasury Board is employer only if
Only a duly appointed employee of the Public Service can enjoy the benefits of a public servant under the Public Service Employment Act (employee rights) and the Public Service Staff Relations Act (right to collective bargaining).
16.2.5 While the Public Service Commission's appointment authority can be delegated to departments and agencies, contracting authorities cannot employ persons in the Public Service without complying with the Public Service Employment Act. Appointments to positions in the Public Service must be made under the statutory regime established by that Act and not under contract. Contracting authorities, therefore, do not have the legislative authority to create employer-employee relationships by way of contract, however an improperly construed contract for services may evolve into an employer-employee relationship at common law.
16.2.6 There are exceptions to these rules. For example, Cabinet directly appoints a number of high ranking officials in the Public Service and ministers can hire members of their own offices. In addition, while many of these rules apply to employment by "separate employers," each separate employer has a distinctive employment regime.
16.2.7 Contracting authorities cannot use contracts for services to circumvent the requirements of the statutory employment regime established by the Public Service Employment Act. In other words, contracting authorities cannot sign contracts with individuals that would, in the absence of the Public Service employment regime, create employer-employee relationships according to the rules of the common law.
16.2.8 Contracting authorities who circumvent the requirements of the Public Service Employment Act, by signing contracts that create employer-employee relationships at common law risk incurring liability under the following statutes the Canada Pension Plan, the Canadian Human Rights Act, the Crown Liability Act, the Government Employees Compensation Act, the Income Tax Act, the Official Languages Act and the Employment Insurance Act. Under those statutes, the Crown may incur liability for persons having the attributes of employees, or "servants," at common law. For example, the Minister of National Revenue may assess a department for source deductions pursuant to the Employment Insurance Act.
16.2.9 On the other hand, contracting authorities may be able to respond to challenges, especially to challenges or liabilities related to employee-related benefits, by using the rationale of the "trilogy" of statutes argument cited in paragraph 16.2.3 (above).
16.3.1 Outside the Public Service, the existence of employer-employee relationships is determined according to a number of tests established by the common law (droit coutumier). It is virtually impossible to lay down general rules on the meaning of employment at common law that apply uniformly and without exception; each relationship is assessed individually. That said, an employee (or "servant") at common law is a person who works for salary and wages and is under the supervision and direction of his or her employer; an independent contractor, in contrast, is his or her own master.
16.3.2 As provided in paragraph 4.1, Contract Policy Requirements, contracting authorities are to ensure that an employer-employee relationship will not result from a contract for services. A contract for services that is initially sound should not develop over a period of time into a work situation that would constitute an employer-employee relationship according either to the Public Service Employment Act or the common law. Therefore there should be appropriate safeguards in contracting procedures to avoid such relationships.
16.3.3 Appointment under the Public Service Employment Act. In order to be appointed to a position under the Public Service Employment Act, (i.e. to be employed in the Public Service), there must be evidence of:
16.3.4 For guidance in assessing an employer-employee relationship:
16.4.1 Research and development services and related scientific activities may be obtained from the private sector.
16.4.2 Research and development service contracts may be entered into when:
16.5.1 Market rates. Normally, the use of the competitive process will result in the establishment of appropriate market rates under a contract. Remuneration, including fees that are not established by price competition, should be negotiated on the basis of usual market rates for the type of work required. Market rates are comparable to those the contractor has charged for similar work under the same conditions in the same geographical area. Market rate may therefore be considered the same as going rate.
16.5.2 In all cases, the fees or remuneration should be in line with the contractor's established market rate.
16.5.3 When the work contains a number of related phases, separate fee arrangements may be necessary for each phase.
16.5.4 Fees for consulting and professional services. Remuneration for consulting and professional services depends on the type of service provided, its complexity and the conditions under which it is performed. The competitive process should be the norm for establishing appropriate fees. In most cases, remuneration is in two parts: the fee for the services rendered and expenses for overhead, administration, and profits. Fees may be determined on the basis of time and rates, as an agreed lump sum (firm price or ceiling price) or, in the case of architectural or engineering contracts, as a percentage of the estimated or contract cost of the work. Expenses, on the other hand, are authorized direct out-of-pocket costs incurred by the contractor in providing the required services.
16.5.5 The various standard methods for calculating fees, definitions of costs, and the more common bases of payment for consulting and professional services contracts are shown in Appendix J.
16.5.6 Fee schedules of associations. In determining the market rate of an individual or firm, fee schedules issued by professional associations may be used only as a guide. The fees suggested by professional associations may, in fact, be paid by the contracting authority only when the fee reflects the market or going rate of the individuals.
16.5.7 In rare cases, when the work requirement is unique and no comparable fee can be determined, pay scales for positions in the public service requiring similar qualifications may be used as a guide in negotiating an appropriate fee.
16.5.8 Fee thresholds. As long as the proposed contract amount is within the approval authority of the department or agency, there are no threshold restrictions on per diem or other time-rate fees in contracts for consulting and professional services selected competitively except for certain authority levels in contracts for the services of former public servants in receipt of a pension (see article 16.8.12).
16.5.9 The equivalent ceiling in time rates should be established by the contracting authority, based on the definition of a normal working day appropriate to the particular requirement.
16.5.10 Per diem rates are payable for a minimum of 6 hours' work in a 24-hour period. Less than this should result in prorating of the per diem rate.
16.5.11 As discussed in article 10.6.10, a multi-year or time-phased contract should clearly indicate in the "Terms of Payment" the cost for each phase. If this is not feasible, the contract should provide for adjustments to the contract price on the basis of an agreed rate or formula set out in the same section. Single contracts with multiple phases and established costs for each phase are preferable to separate consecutive contracts that give the previous contractor a competitive advantage. When it is impossible to establish rates for future years and/or contract phases at the time the contract is awarded, a formula should be developed that relates current prices to appropriate published data such as the price indices published by Statistics Canada. This formula should be used for negotiating any future price changes.
16.5.12 Consistent with section 12.11.10, contracts should include an appropriate penalty clause where the deliverable involves reports or studies.
16.5.13 Prospective contractors are expected to divulge whether they have previously undertaken similar or related studies at federal expense. Contracting authorities should follow up affirmative responses to ascertain whether earlier studies will satisfy all or part of the current need.
16.5.14 Honorarium payments. An honorarium payment is not one made under a contractual arrangement; rather, it is a gratuitous payment as distinguished from compensation for service or hire, and the recipient, if not paid, cannot sue in a Court of Law. Accordingly, the Contracting policy does not govern honoraria.
16.6.1 The total value of any service contract includes the basic remuneration or fee, all overhead, administration, profit, travel and living expenses and all applicable taxes, including GST and HST.
16.7.1 As stated in article 4.2, Related requirements, contracts for service are to reflect current federal policies on international relations. Where it is not possible to satisfy the requirement with Canadian contractors, foreign firms or individuals may be awarded contracts. Where it is proposed that a foreign contractor carryout the work within Canada, the requirements of federal immigration and health policies are to be observed. The contractor is responsible for satisfying these requirements.
16.8.1 As stated in article 4.2, Related requirements, contracts for the services of former public servants in receipt of a pension or of a lump sum payment (the definition of "former public servant" can be found in Appendix A) are to bear the closest public scrutiny and reflect fairness in spending public funds. Contracting authorities should exercise extreme discretion when contracting with former employees in receipt of a pension or of a lump sum payment. These contracts should be subject to the usual review and approval procedures required by the Contracts Directive and departmental policy. When negotiating the rate for the services of any former employee in receipt of a pension or of a lump sum payment, contracting authorities are expected to obtain the lowest or most cost effective rate. No contract for the services of a former public servant in receipt of a pension or of a lump sum payment may be entered into unless it is in the public interest to do so. There must be no suggestion of special favouritism or privilege.
18.104.22.168 For the 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 for public servants whose employment would be terminated because of the down-sizing expected to result from various initiatives required to adjust government spending. The lump sum payment period does not include the period of severance pay, which is measured in a like manner. The lump sum payment period represents a transition period to secure and adjust to employment outside the public sector. If the former public servant returns to public service employment during this transition period, the balance of the lump sum payment has to be returned in the form of forfeited salary, as provided in the Work Force Adjustment Directive (WFAD).
For employees who have left the public service pursuant to one of the existing or any future early departure incentives, which involve the payment of a lump sum of money based on a number of weeks, commonly known as a "lump sum payment period", the fee limit that may be paid under any contract with such an individual, continues to be$5,000 during the lump sum payment period. This restriction applies in both competitive and non-competitive contracts. After the lump sum payment period is completed, then the one year fee abatement period begins for any non-competitive contract with an individual.
16.8.2 Electronic bidding is very effective in addressing the aforementioned sensitivity of contracting with former public servants. Because of its transparency, electronic bidding demonstrates the fairness of the contracting process, contracting authorities are encouraged to use this procedure to obtain bids or to announce, via an ACAN, proposed contract awards involving these individuals. It is also recommended in these situations that contracting authorities consider using electronic bidding even if the contract's value is below the $25,000 threshold normally associated with the use of this methodology.
16.8.3 Contracts with former public servants in receipt of a pension paid pursuant to the Public Service Superannuation Act (PSSA) as indexed by the Supplementary Retirement Benefits Act. Contracts with a former employee receiving a government pension may prompt accusations that public funds are being abused or that influence was improperly exerted in the contract award, particularly if those involved occupied more senior positions or took early retirement. Contracting authorities should therefore recognize the delicate balance between the desire to respect individuals' rights to use their knowledge and abilities for economic gain and personal development on the one hand, and, on the other, to protect the public's right to reasonable assurance that the public interest will not suffer in the process. If the contract work is substantially like that performed by the pensioner before retirement, contracting authorities should ensure that they can justify why the work is not being done by a successor.
Contracts for the services of individuals who have been retired for less than one year and who are in receipt of a pension, must include a contract fee that is abated in accordance with the formula outlined below, regardless of fee or contract value.
16.8.4 Consequential to article 4.2, the following procedures are to be followed for any contract for the services of former public servants in receipt of a pension:
16.8.5 A contract with a former public servant in receipt of a pension may be considered competitive when one of the following conditions is met:
16.8.6 A description of the contracting limits with former public servants, which complements those for construction, goods, and service contracts, is also provided in Schedule V of Appendix C.
16.8.7 Amendments. When it is necessary to amend either a competitive or non-competitive contract entered into pursuant to (a) or (b) of paragraph 16.8.4,the authority to make the amendment is based primarily on the total value of the contract.
16.8.8 For a non-competitive contract with a former public servant in receipt of a pension:
16.8.9 Notwithstanding the preceding authority to amend these contracts, it is essential that departmental officials carefully review the award of non-competitive contracts with former public servants.
16.8.10 For a competitive contract (using the traditional or electronic bidding methodologies) with a former public servant:
16.8.12 Abatement formula. The following procedure applies in the determination of the maximum fee for the services of a former public servant in receipt of a pension. The former maximum salary is updated to the current level, or the estimated salary for having the work done by a public servant (if a qualified public servant were available), whichever is less,
30 per cent (representing a fringe
the total annual (gross) pension in pay,
a figure that is divided by 260
(representing the number of working
days in a year),
the maximum daily rate that can be negotiated.
If a rate lower than the above formula yields is negotiated and agreed to, the negotiated rate should be used. The contract amount should be adjusted appropriately where the fee is a fixed price based on a number of days of work or where the fee is paid on the basis of hourly, weekly, monthly or annual rates. The number of hours that will constitute a work day should be based on the usually accepted norm for the profession, trade or function being contracted and should be specified in the contract document.
16.8.13 A "pension" in the context of the formula is 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 paid pursuant to the Canada Pension Plan Act.
16.9.1 There is no prohibition against contracting with full or part-time public servants. However, any contracts with employees should reflect the provisions of Paragraph 6(b) of the Conflict of Interest and Post-Employment Code for the Public Service which states, "employees have an obligation to act in a manner that will bear the closest public scrutiny, an obligation that is not fully discharged by simply acting within the law".
16.9.2 There are rare occasions where it is cost efficient and effective to enter into a contract with an employee of the Government of Canada to provide some unique service outside the scope of the employee's usual duties. Contracts for services should not be used to acquire overtime services that would normally be an extension of the employee's regular duties. A contract with a public servant is subject to the same conditions that govern all contracts. The competitive approach should be followed and if a contract is awarded to a public servant it should not give rise to any suggestion of favouritism or special privilege to the contractor.
16.9.3 Before any public servant accepts a contract from the Crown, Section 121(1)(c) of the Criminal Code requires that the "consent in writing of the head of the branch... be obtained by the employee". Contracting authorities should make prospective employee/contractors aware of this requirement of the law.
16.10.1 Contracts with consultants or professionals may be entered into for specialized services when:
Section 16.10 does not apply to the following:
16.10.2 The requirements in section 16.10should be used with discretion on contracts valued at $25,000 or less.
16.10.3 Competition for consultants or professionals. Procedures and source lists should be designed to ensure that qualified individuals or firms are not omitted from consideration and that there is a fair opportunity for those qualified to obtain a share of the available work. Repeat commissioning of a firm or individual without competition should not become a practice, even if the value of the contract is under the mandatory threshold for the calling of bids.
16.10.4 Inventories and source lists. Representative and up-to-date inventories or source lists of firms that provide consulting and professional services and wish to do business with the federal government should be maintained for consistency, economy, effectiveness and fairness in selecting and procuring best value. These inventories should be consulted before inviting bids or proposals or recommending a non-competitive selection.
16.10.5 Contracting authorities who frequently engage the services of consultants or professionals should establish and maintain at least one inventory containing a representative number of firms and individuals from which consulting and professional services can be obtained. These inventories should be established initially by recording those firms and individuals who have provided consulting and professional services to the department or have expressed an interest in doing so. Contracting authorities may solicit expressions of interest by inviting firms and individuals to complete a questionnaire providing standard information such as that shown in Appendix J. To avoid duplication of effort, contracting authorities should cooperate in exchanging lists and data held in their respective inventories. Inventories should contain the following data:
16.11.1 Contracts for consulting and professional services may result in additional administrative or management provisions.
16.11.2 As envisaged in Section 4, Policy requirements, the contracting authority is responsible for including in the contract appropriate mechanisms for monitoring the work, in co-ordination with other related activities, and its redirection, if necessary.
16.11.3 The contracting authority should appoint a procurement 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:
The division of these responsibilities among authorities should be agreed to before placing the contract.
16.11.4 The consultant or professional is responsible for controlling the work under contract to achieve the objectives within the time and budgetary constraints established.
16.11.5 Conflict of interest (see article 12.5.3.). A consultant or professional, by virtue of the kind of service provided, may be in a position to exercise a bias toward a third party that could put the latter in a favoured position for future business with the Crown. If the consultant, professional or principals have a financial interest in the business of this third party, the possibility of a conflict of interest should be considered. To avoid a conflict of interest, contracting authorities should, before signing a contract, require the selected consultant or professional to sign a declaration, either as part of the contractor separately, stating that no pecuniary interest in the business of any third party exists that would affect objectivity in carrying out the contract.
16.11.6 There are also situations where, in meeting its obligations to a contracting authority, a contractor may be in a position of potential conflict with competing or opposing interests of the contractor's other clients, either during the period of or subsequent to this particular contract. Contractors are expected to inform the contracting authority of these potentially competing services and interests, and explain why the situation would not represent a conflict of interests. Where appropriate, a contracting authority should require a contractor to sign a declaration, either as part of a contract or separately, that the contractor has no, and will not have, during the course of the contract and subsequent to it, any conflict arising from competing or opposing interests of other clients of the contractor. The possible wording for such a declaration is included in Appendix G.
16.11.7 Contractors should be also made aware that any real or perceived conflict of interest, which has not been satisfactorily resolved, could result in their contract with a contracting authority being terminated.
16.11.8 Performance evaluation. On completion of the contract, the contracting authority should evaluate the work performed by the consultant or professional. The evaluation should be undertaken by officials competent in the particular fields involved. If judgmental comments are provided, they should be supported by complete and factual detail. This is particularly important when the evaluation is not favourable.
16.11.9 The consultant or professional should receive a performance critique and be allowed to respond for the record.
Evaluation reports should include:
16.12.1 Contracts for temporary help services are discussed in Section 4, Policy requirements and in article 4.2, Related requirements. Further instructions related to these types of contracts are found in Appendix I.
16.13.1 When contracting for public opinion research and advertising, reference should also be made to the Communications Policy, the Common Services Policy and the Management of Government Information Holdings Policy.
16.13.2 At the beginning of a project planning process for public opinion research and advertising, departments and agencies must notify Public Works and Government Services Canada's Government Information Services Branch, if the project may result in the award of a contract. A project registration number will be provided by that branch to authorize Public Works and Government Services Canada to award a contract for these services on behalf of departments.
16.13.3 Public Works and Government Services Canada is responsible for awarding public opinion research and advertising contracts.
16.13.4 As part of its contracting responsibilities, Public Works and Government Services Canada ensures that a significant level of Canadian participation is achieved by having the advertising work performed in Canada in a manner consistent with the nature of the requirements.
16.13.5 A definition of advertising is provided in the Communications Policy of the Government of Canada.
16.13.6 A definition of public opinion research is provided in the Communications Policy of the Government of Canada.
16.15.1 As mentioned at paragraph 4.2.6 of this policy, pursuant to paragraph 221(1)(d) of the Income Tax Act, payments exceeding $500.00 made by departments and agencies under applicable service contracts, including contracts involving a mix of goods and services, must be reported on a T1204 supplementary slip.
16.15.2 Although the Government Contracts Regulations define printing as a goods contracts, departments must report on a T1204 any payments related to printing contracts in the manner indicated in this section and section 16.15.
16.15.3 Exceptions. Contract purchases for services that are exempt under this requirement (i.e., do not require T1204 slips) are direct purchases made using acquisition cards, direct purchases under local purchase orders, grants and contributions, utility payments, and rental or leasing of office space and equipment and other "goods".
16.15.4 The amount to be reported on each information slip is the total of payments made to the enterprise in the calendar year, including any goods portion, expenses, indirect costs, etc., but excluding GST/HST.
16.15.5 All forms of enterprises should receive these slips, including sole proprietorships (individuals), corporations and partnerships.
16.15.6 Slips are required for service contracts where a Canadian resident is working outside the country. The payments made to non-residents providing services in Canada are not reported on T1204 supplementary slips, not being part of this reporting requirement. See section 16.15 for information on tax treatment of non-residents who perform services in Canada.
16.15.7 To comply with this requirement, T1204 slips must contain the following information:
16.15.8 Departments and agencies will have to certify, as much as possible, that the information the contractor gave is complete and accurate.
16.15.9 Canada Customs and Revenue Agency has prepared a Federal Departments, Agencies and Crown Corporations Guide that provides general information on reporting and filing payment information. For information on the classification of service contracts, consult the Services section of the Master List of Objects of Expenditures (economic objects) in the Treasury Board Chart of Accounts (link: /pubs_pol/dcgpubs/coa/siglist-eng.asp
16.16.1 Every payer, including a non-resident payer, who makes a payment to a non-resident of Canada for services provided in Canada must withhold and remit an amount in accordance with the requirements under the Income Tax Act of Canada (the Act).
16.16.2 Generally, the rules for the computation of income from a business apply equally to residents and non-residents. Any exceptions are clearly expressed in the Actor in the Income Tax Regulations. Under Part I of the Act, a non-resident is subject to tax on the income earned in Canada that is attributable to services provided.
16.16.3 Paragraph 153(1)(g) of the Act and subsection 105(1) of the Regulations (Regulation 105) are the authority to withhold tax on fees, commissions, and other amounts paid to non-residents of Canada, other than employees, for services rendered in Canada. The rate of withholding is 15% of the gross amount paid.
16.16.4 The remitting requirements for the Regulation 105 withholding tax are outlined under subsection 108(1) of the Regulations (Regulation 108).Regulation 108 requires that the withholding taxes are to be remitted by the 15th of the month following the month in which the amounts were deducted or withheld.
16.16.5 The only alternative to the requirements of Regulation 108 is for the non-resident to obtain a waiver, or a reduction in the withholding tax. If the payer has not obtained written notification from Canada Customs and Revenue Agency, the required withholding tax is mandatory. Failure to deduct or remit an amount under Regulation 105 may result in an assessment of the outstanding amount, plus interest and penalty, pursuant to section 227 of the Act.
16.16.6 All payers, resident or non-resident, must report to Canada Customs and Revenue Agency payments to non-resident persons for services provided in Canada.
16.16.7 The required withholding tax is considered a payment on account of the non-resident's overall tax liability to Canada. It is not Canada Customs and Revenue Agency's intent to inconvenience non-residents who may not be taxable in Canada. One of the Department's responsibilities is to ensure that all clients are treated in a consistent and fair manner.
16.16.8 Where a non-resident can adequately demonstrate that the withholding tax normally required is in excess of their ultimate Canadian tax liability, the Department may reduce or waive the withholding tax accordingly. A waiver or reduction of the withholding requirements is considered pursuant to the application of subsection 153(1.1) of the Act, "Undue Hardship." The onus is on the non-resident to demonstrate to the Department that a waiver or a reduction of the amount required to be withheld is justified. This may be based on the application of the treaty of their country of residence or through an estimated income and expense statement.
16.16.9 A waiver application should be submitted to the tax services office that serves the area where the services are to be provided. The Department requires30 days to process requests for waivers based on treaty protection and 10 days for requests based on an estimated income and expense statement. This allows all non-residents the opportunity to have their tax affairs reviewed before the services are performed. A waiver application must contain sufficient documentation and information to establish if a waiver is justified.
16.16.10 Additional information about the withholding, remitting, and reporting responsibilities relating to non-residents who provide services in Canada is available from any of Canada Customs and Revenue Agency's tax services offices.
16.17.1 The procurement of electricity or natural gas is considered a service procurement.
16.17.2 Departments must meet energy needs in accordance with the federal or provincial jurisdiction of the requirement as applicable. Regulation of energy utilities ranges from fully regulated, partially deregulated to fully deregulated. The nature of the regulation will govern the procurement arrangements.
16.17.3 Departments may enter into contracts based on the authority and conditions contained in the Treasury Board Contracts Directive, Part II, Exceptional Contracting Limits, Section 1 (Appendix C of the Contracting Policy).
Published December 12, 2000. The contents of this appendix are mandatory since they are generally related to policy requirements.
This Appendix contains definitions of terms used in this volume excluding terms defined in the Government Contracts Regulations (see Appendix B).
An Advance Contract Award Notice (ACAN) allows departments and agencies to post a notice, for no less than fifteen calendar days, indicating to the supplier community that it intends to award a good, service or construction contract to a pre-identified contractor. If no other supplier submits, during the fifteen calendar day posting period, a statement of capabilities that meet the requirements set out in the ACAN, the competitive requirements of the government's contracting policy have been met. Following notification to suppliers not successful in demonstrating that their statement of capabilities meets the requirements set out in the ACAN, the contract may then be awarded using the Treasury Board's electronic bidding authorities.
If other potential suppliers submit statements of capabilities during the fifteen calendar day posting period, and meet the requirements set out in the ACAN, the department or agency must proceed to a full tendering process on either the government's electronic tendering service or through traditional means, in order to award the 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 by:
a method of procurement that promotes suppliers' access to, and transparency in, the procurement process and facilitates the Crown's receipt of best value, by using:
The Government Contracts Regulations are available at http://laws-lois.justice.gc.ca/eng/regulations/SOR-87-402/.
Revised April 1, 2005. The contents of this appendix are mandatory since they are prescriptions of the Treasury Board.
This Appendix applies to contracting authorities as defined in Government Contracts Regulations with the exception of contracting authorities in the Schedule to the Regulations and Commissions created pursuant to the Inquiries Act.
|Contracting Authority For||Electronic Bidding||Competitive||Non-Competitive|
|Item||Col I||Col II
|1.||All Programs not specifically named herein||400||200||400||200||40||40|
|2.||Public Works and Government Services Canada||40,000||20,000||10,000||5,000||500||500|
Note: Between April 1, 2009 and March 31, 2011 the limits on Public Works and Government Services Canada were as follows: column II: $40,000; column III: $20,000; column IV: $20,000; column V: $10,000; column VI: $1,000; and column VII: $1,000.
|Contracting Authority For||Electronic Bidding||Competitive||Non-Competitive|
|Item||Col I||Col II
|1.||All Programs not specifically named herein||-||-||400||200||40||40|
|3.||Public Works and Government Services Canada||40,000||20,000||10,000||5,000||2,000||1,000|
|Contracting Authority For||Electronic Bidding||Competitive||Non-Competitive|
|Item||Col I||Col II
|1.||All Programs not specifically named herein||2,000||1,000||400||200||100||50|
|2.||Public Works and Government Services Canada||20,000||10,000||10,000||5,000||3,000||1,500|
|4.||Fisheries and Oceans||4,000||2,000||400||200||100||50|
* The contracting limits for architectural and engineering services are specified in paragraphs 9., 18., 53. and54. of Part II of this appendix.
|D||Information Processing and Related Telecom Services|
|R||Professional, Administrative and Management Support Services|
|N23||Ground Effect Vehicles, Motor Vehicles, Trailers, and Cycles|
|N58||Telecommunications Equipment and Accessories|
|N70||General Purpose Automatic Data Processing Equipment (including Firmware), Software, Supplies and Support Equipment|
|N74||Office Machines, text processing systems and visible recording equipment|
|N75||Office Supplies and Devices|
|N84||Clothing, Accessories and Insignia|
|N91||Fuels, Lubricants, Oils and Waxes|
Service Contracts with Former Public Servants in Receipt of a Pension
(1) Non-competitive (directed) service contracts with former public servants in receipt of a pension:
Treasury Board approval is required to amend any contract whose total value exceeds $25,000.
(2) Competitive (traditional or electronic bidding methodology) service contracts with former public servants in receipt of a pension:
Treasury Board approval is required to amend any contract whose total value exceeds $100,000.
Notes Concerning service contracts with former public servants in receipt of a lump sum payment:
|General||1., 2., 3., 19., 49., 54.|
|Agriculture and Agri-Food Canada||37., 53.|
|Canada Customs and Revenue Agency||15.|
|Canada School of Public Service||34.|
|Canadian International Development Agency||4.|
|Canadian Centre for Management Development||22.|
|Canadian Food Inspection Agency||23.|
|Canadian Security Intelligence Service||16.|
|Correctional Service Canada||11.|
|Environment Canada||35., 46.|
|Fisheries and Oceans||10., 14., 25., 44., 53, 60.|
|Foreign Affairs and International Trade||9., 47., 51, 59.|
|Human Resources and Development Canada||28.|
|Indian and Northern Affairs Canada||38.|
|Member of the Queen's Privy Council responsible for the Outreach Program||39.|
|National Archives of Canada||12.|
|National Capital Commission||55.|
|National Defence||26., 57., 58, 62.|
|National Film Board||21.|
|National Library of Canada||13.|
|National Research Council Canada||27., 56, 61.|
|Office of the Superintendent of Financial Institutions Canada||20.|
|Public Service Commission of Canada||42.|
|Public Works and Government Services Canada||5., 6., 7., 18., 29., 30., 31., 32., 33., 36., 40.|
|Royal Canadian Mounted Police||24, 63.|
|Status of Women Canada||48.|
|Transport Canada||8., 43.|
Exceptional contracting limits
In addition, or as an exception, to the contracting limits in Part I of this Appendix, the following special contracting limits and other related authorities have been approved by the Treasury Board. These exceptional limits will be used in conjunction with the use of mandatory PWGSC instruments as a first consideration to the extent practicable.
if the total under the contract, including any amendments thereto, does not exceed
Published July 1, 2003. The contents of this appendix are mandatory since they represent a decision of cabinet.
The primary objective of contracts is to receive the deliverables contracted for, and to be able to use those deliverables for Government of Canada activities. The Government of Canada's Contracting Policy further states that officials are to achieve best value for money and to seek the optimal balance of benefits to the Crown and the Canadian people through its purchases. As part of this commitment, the Government of Canada has made specific provisions for social and economic development objectives to be pursued through procurement. One of the socio-economic objectives pursued through contracting is employment equity. The Federal Contractors Program on Employment Equity sets out a framework for meeting these objectives.
The Federal Contractors Program was implemented October 1, 1986 following the proclamation of the Employment Equity Act on August 13, 1986. The Act itself covered private sector federally regulated enterprises with 100 or more employees and required them to implement employment equity. The Federal Contractors Program targeted non-federally regulated federal contractors with a resident workforce in Canada of 100 or more employees which received federal contracts for goods and services of $200,000 or more.
The Employment Equity Act was amended in 1995 to strengthen various provisions and to provide measures to ensure compliance with employment equity requirements; it also extended the obligation to implement employment equity to federal departments and agencies. The Act states it is the responsibility of the Minister of Labour to "administer the Federal Contractors Program for Employment Equity and ... ensure that the requirements of that program with respect to the implementation of employment equity ... are equivalent to the requirements with respect to the implementation of employment equity by an employer under this Act. "This legislative mention clearly authorizes the Minister of Labour to develop procedures necessary to administer the Program and ensure that contractors comply with their employment equity obligations.
There are a number of obligations incumbent on organizations subject to the Act or the Federal Contractors Program "to achieve equality in the workplace ..."(Act, section 2). Such organizations must collect and maintain data on all employees, analyze the representation of each of the designated groups in all occupational groups, compare this representation with the external representation and identify under-representation of designated groups. Based on this information, organizations must identify and remove all barriers impeding designated groups and must prepare an employment equity plan with achievable and realistic short and long term goals. In implementing employment equity, organizations must develop positive policies and practices and, as required, provide accommodation and special measures for designated groups.
For their part, federal contractors with a resident workforce of 100 or more employees (as defined in the Act and Regulations) which bid on goods and services contracts of $200,000 or more must certify their commitment to implement employment equity. Once a supplier is awarded a contract of $200,000 or more (including all applicable taxes), the organization is then required to honour its commitment of implementing employment equity as an on-going obligation, and not simply during the life of the contract. Contractors subject to the Federal Contractors Program are required to provide Labour Program of Human Resources Development Canada (HRDC-Labour) within formation on the representation of women, members of visible minorities, Aboriginal peoples and persons with disabilities who are permanently employed. HRDC-Labour verifies that all federal contractors are meeting their obligations through a cycle of compliance reviews administered by workplace equity officers. Contractors which fail to meet their commitment may lose the right to receive further federal contracts for goods and services.
1.1 Departments and agencies (listed at Schedules 1, 1.1 and 2 of the Financial Administration Act) must follow practices that will ensure fairness and equality to designated groups in the administration of all contracts. More specifically, the Federal Contractors Program for Employment Equity (FCP), administered by Human Resources Development Canada-Labour (HRDC-Labour) is intended to ensure that suppliers to the federal government attain a fair and representative work force.
1.2 Contractors must identify and remove barriers to the selection, hiring, promotion and training of women, aboriginal peoples, persons with disabilities, and visible minorities. Contractors must also take steps to help increase the participation of these groups at all levels and in all areas of the work force.
1.3 The Federal Contractors Program applies to:
2.1 All contracting authorities soliciting bids or awarding goods and services contracts valued at $200,000 (including all applicable taxes) and above must:
3.1 A supplier declared ineligible by HRDC-Labour and whose name appears against the "FCP List of Ineligible Contractors" is ineligible to do business or receive any federal contracts for goods and services over the threshold for solicitation of bids as set out in the Government Contracts Regulations (GCRs).
3.2 If the bidder cites a Certificate of Commitment number, it is recommended that the contracting authority verify its
accuracy by comparing it with the number listed for that organization/bidder in the "FCP List of Certified Employers". HRDC-Labour
makes this information available on Publiservice
3.3 If the Certificate of Commitment number cited by the bidder does not match the Certificate of Commitment number listed in the "FCP List of Certified Employers", it is recommended that the contracting officer contact the HRDC-Labour Program Officer, Workplace Equity Programs (819)953-4120 or seek clarification from the bidder.
3.4 If an ineligible supplier is the only supplier which can perform the work in a non-competitive situation or the recommended bidder(s) in a competitive solicitation, the procurement officer should obtain approval from senior management of the contracting authority before awarding the contract. In such cases, the contracting department should inform Workplace Equity Programs of HRDC-Labour who would then attempt to obtain a commitment from the supplier to seek re-instatement in the Federal Contractors Program (see section 6.5 below).
4.1 Within 30 days of contract award, Departments/Agencies will forward original signed Certificates of Commitment for contracts valued at $200,000 (including all applicable taxes) or more to:
Manager, Workplace Equity Programs
Human Resources Development Canada - Labour Branch
165 Hôtel de Ville
Phase II, 10th Floor
Note that all signed Certificates will be numbered by HRDC-Labour for ease of reference.
4.2 HRDC-Labour will regularly evaluate the program and may request from contracting departments/agencies information essential to program monitoring.
4.3 Submissions seeking Treasury Board approval of contracts should address compliance with the Federal Contractors Program.
5.1 Contractors must implement employment equity in accordance with criteria of the Federal Contractors Program.
5.2 Human Resources Development Canada-Labour periodically conducts on-site reviews of contractors. If the results are satisfactory, HRDC-Labour shall so inform the contractor.
5.3 The contractor, informed by HRDC-Labour that their efforts or progress-to-date are not satisfactory, must initiate appropriate corrective action within a reasonable time period. If at the end of that period results are unsatisfactory, the review officer may find the contractor to be in non-compliance.
5.4 Contractors found to be in non-compliance as a result of a compliance review have the right to appeal to the Minister of Labour. In that case an independent assessor shall be appointed to examine the review and any information presented by the contractor making the appeal. The independent assessor will form conclusions and advise the Minister accordingly.
6.1 Contractors withdrawing from the Federal Contractors Program accept the same sanction as that for being found in non-compliance (see 6.3 below).
6.2 Withdrawal from FCP without sanction: When a contractor demonstrates to the satisfaction of HRDC-Labour that its workforce has decreased to less than 100 permanent employees, HRDC-Labour will allow the organization to withdraw from FCP without penalty.
6.3 Following a compliance review resulting in a finding of non-compliance and in which the contractor files an appeal, the Minister of Labour shall communicate the assessor's findings to the Minister of the department/agency that awarded the contract; if the assessor's report confirms the finding of non-compliance, the Minister of Labour shall take appropriate action which may include advising the contractor that it is ineligible for future goods and services contracts. In this case, HRDC-Labour will place the name of the ineligible organization on the "FCP List of Ineligible Contractors" and its Certificate of Commitment number will become invalid. The contractor in question will not be considered for further federal contracts for goods and services valued over the threshold for solicitation of bids set out in the Government Contracts Regulations (see section 3 of this document).
6.4 If the contractor withdraws from the Federal Contractors Program during a compliance review and prior to a finding of non-compliance, the contractor will be declared ineligible to receive further federal contracts for goods and services above the threshold for soliciting competitive bids set out in the Government Contract Regulations. The name of the ineligible contractor will be placed on HRDC-Labour's "FCP List of Ineligible Contractors."
6.5 Re-instatement: The ineligible contractor may be re-instated by demonstrating to the satisfaction of a review officer of HRDC-Labour that the organization is incompliance with the Federal Contractors Program.
Roles and responsibilities of HRDC-Labour
7.1 HRDC-Labour develops the policies, procedures and criteria for implementing employment equity and reviews contractors' compliance.
7.2 HRDC-Labour maintains and regularly updates a federal inventory of all completed Certificates of Commitment in its "FCP List of Certified Employers". This list provides the names of all certified contractors, including new contractors, and their assigned certificate numbers. This information is made available to all contracting authorities on Publiservice (name of site to be determined and cited in the final official document).
7.3 HRDC-Labour maintains an inventory of contractors - the "FCP List of Ineligible Contractors" - which are not entitled to receive federal goods and services contracts by reason either of having been found in non-compliance following an HRDC compliance review or having withdrawn from the Federal Contractors Program. HRDC-Labour ensures that this inventory is kept current and made available to all contracting authorities on Publiservice (name of site to be determined and cited in the final official document).
7.4 HRDC-Labour offers advice and assistance to contractors in implementing employment equity.
7.5 HRDC-Labour offers information and advice to government officials regarding the purpose and functioning of the Federal Contractors Program for Employment Equity.
7.6 HRDC-Labour maintains a record of contractors successfully meeting their employment equity commitments and periodically arranges the Employment Equity Merit Awards Ceremony to recognize contractors whose performance and results, based on a compliance review, deserves particular recognition.
7.7 HRDC-Labour requires certified employers to indicate the number of employees on the Certificate of Commitment. HRDC-Labour also requires contractors to submit information on the representation of the designated groups in the employer's workforce.
7.8 HRDC-Labour will periodically produce consolidated reports on the situation of designated groups in the workforce under the FCP, on compliance efforts by contractors and on the contracting activities of the departments/agencies.
7.9 HRDC-Labour will collaborate with contracting authorities to ensure that contractors found in non-compliance or having withdrawn from the FCP do not receive federal contracts for goods and services over the threshold for the solicitation of bids as set out in the Government Contracts Regulations (GCRs).
Roles and responsibilities of contracting authorities
7.10 Contracting authorities are responsible for ensuring that solicitations issued to bidders contain appropriate documentation on the Federal Contractors Program for Employment Equity. They must ensure that all bidders/suppliers to which the FCP applies provide evidence of compliance with the FCP prior to awarding any contract (see section 2 of this document).
7.11 Contracting authorities should not award contracts for goods and services valued over the threshold for solicitation of bids as set out in the GCRs to ineligible contractors unless prior approval was obtained from senior management (see section 3 of this document).
7.12 Departments/Agencies should endeavour to bring the bidding requirements of the Federal Contractors Program to the attention of suppliers including appropriate references on the Internet.
7.13 Contracting authorities should provide to HRDC-Labour completed Certificates of Commitment submitted by successful contractors (see section 4 of this document).
7.14 On request, contracting authorities should provide information on contracts to enable HRDC-Labour to administer and monitor the Federal Contractors Program.
Published September 7, 1997.
Published May 1, 1996. This Appendix contains mandatory requirements.
All references in this Appendix to the Act or to the Regulations are to the Official Languages Act and Official Languages (Communications with and Services to the Public) Regulations.
To ensure that the contracting process complies with the Official Languages Act and Regulations, this Appendix provides official languages parameters for all federal departments and agencies that are subject to the Government Contracts Regulations (contracting authorities). Other federal institutions are required to comply with the general principles of this Appendix.
1. Contractors and prospective contractors must be dealt with in the official language of their choice as required by the Act and Regulations. From the beginning of the contracting process, contractors should have access to the information related to this process in the official language of their choice.
In accordance with section 11 of the Official Languages Act, federal institutions must meet any requirements in a federal act, that require them to publish notices, advertisements and other matters in both official languages.
2. When bid solicitations are national in scope or 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 (whether through the media or by electronic communications systems). This requirement also applies to public notices, statements of terms and conditions, basic forms, bid solicitations, standards, purchase descriptions and contracts.
In this policy, standards are those produced by a federal institution, or by a private or public standards-writing organization, if they are available in both official languages at the time the contracting process begins.
3. Where non-standardized documents, such as specifications, are used, it is up to the federal institution, i.e. the contracting authority (or the client department responsible for the preparation of the specifications when a common service organization handles the contracting process only) to determine if these documents must be available in both official languages to provide information to contractors in the language of their choice, in conformity with the Official Languages Act and Regulations. Thus, the non-standardized or specific documents may be provided in only one official language when the federal institution determines and can substantiate, based on relevant information regarding their public and the marketplace, that they will be requested in that language only. If it is determined later that a significant demand exists for such documents in the other official language, the federal institution must take the necessary measures to make the documents available in the other official language. In some cases, where the specifications do not originate in Canada, they are not translated.
4. When the bidding is not national in scope or when an office of a federal institution does not have obligations under the Act and Regulations, the contracting documents may be prepared only in the official language of the majority of the population concerned. This also applies to subsequent operations.
5. The contracting authority (or the client department responsible for the preparation of the specifications when a common service organization handles the contracting process only) is responsible for setting out the requirements, including those on official languages, and for the quality of the language of their statements of terms and conditions, and specifications. The institution is also responsible for actively offering the related services to the public in Canada in the official language of its choice, as required by the Act and Regulations.
6. The federal institution must include the appropriate conditions in its bid solicitation documents and its contracts to ensure that, when the public comprises members of both official language communities, its contractors observe the requirements of the Act and Regulations on service to the public and, where applicable, of Treasury Board policies. For example:
?Any contractor who carries out work on behalf of a federal institution (see section 25 of the Act) in a location where the federal institution would have to provide services or communications to the public, including supplemental background documentation such as brochures, operation and maintenance instructions, parts lists in both official languages, must also do so in both official languages.
?When the site of a project is in a location where a significant demand exists for services in English and French under the Act and Regulations, the signs must be erected in both official languages.
7. When a common service organization carries out procurement for goods or services, the client federal institution must submit, where necessary, contractual documents, including its requisition, specifications, standards and purchase descriptions in both official languages. If it does not do so, the federal institution must be prepared to show that its approach is consistent with the Act and Regulations.
Published January 2002. The contents of this appendix contain both mandatory requirements as well as guidelines.
The information required in the contract approval process should be a matter of record in all contract files, as well as in Treasury Board submissions, to:
There are three types of contract submissions, viz, entering into a contract, amending a contract and ratifying a contract or amendment. The Treasury Board Submissions Guide provides general information on the format, structure and processing of submissions to the Treasury Board.
The proposal and cost sections in a submission are the most important elements since the text of the proposal and details of the cost must reflect what the Treasury Board Ministers or the contract authority are to approve. The proposal must therefore provide a brief, descriptive narrative, in layman's terms, of the authorities sought. The proposal should clearly indicate the type of submission, i.e., to enter or to amend a contract; the name and address of the contractor and a brief description of the work, including the name of the project and the location. In a goods contract submission, a statement explaining what the goods are for and where they will be used is required. In a multi-year contract, the proposed duration of the contract must be stated.
In the cost section, the amount requested and the source of funds (vote number, revolving funds, O and M, capital, etc.) must be stated. The name of the client department funding the proposal, if any, must be included. In the case of an amendment, the additional amount requested plus the revised contract total must be stated. A cash flow expenditure forecast is also required.
2.3 Selection of contractor
When the selection is based on competitive bidding, the names of the bidders, the location of the work and the price bid by each bidder are to be included in the submission. If the selection is based on other criteria such as best value, details of the evaluation system and supporting information in terms of technical evaluation and price is required. When the selection of the contractor does not conform to the definition of a competitive contract, the contract is to be treated as anon-competitive contract and the lower authority levels apply.
2.4 Technical evaluation
A summary of any technical evaluation should be provided normally as an annex to the submission.
2.5 Negotiated prices
When the price was derived by negotiation, a complete price breakdown should be provided. A statement that the price is reasonable should cite comparisons, price certifications, profit level, catalogue price, historical prices and the like.
2.6 Amendments to contracts
A full explanation of why costs will exceed the original contract level must be provided when requesting approval to increase the value of a contract (e.g., additional client requirement, underestimation of cost, additional work not included in the original contract). Also a table or resume of the previous approvals and departmental amendments, work done, work paid for, descriptions of the original work and details of the revised contract must be provided.
2.7 Method and basis of payment
Pricing and payment terms should be included. Indicate whether the contract is a firm price contract, unit price contract or a target price contract, etc. If there is a penalty for late delivery, this should be reported.
2.8 Terms of reference
A brief description of the main elements of work to be carried out by the contractor is required.
2.9 Advance payments
If advance payments are to be made, the request for authority to make them should be included in the proposal section. The amount, time and reason for the request, and the proposed method and time of any recovery of the advance should be provided in the remarks section.
The text of the remarks section of a submission or contractual proposal should include the following, in numbered paragraphs:
The Treasury Board Secretariat should have copies of all supporting documents referred to in the submission. In some cases, a summary of the essential details of a document may suffice. The Treasury Board Submissions Guide provides general information on the format, structure and processing of submissions to the Treasury Board. It also provides guidance on some of the content requirements. A template is also available on the Treasury Board web site. For complex, urgent or sensitive issues, discussions with the Secretariat analyst, prior to finalization of the submission, may shorten the time required for approval.
The Treasury Board Secretariat will carry out continuing reviews of submissions to determine the adequacy of these instructions and the level of compliance. If necessary, departments or agencies will be informed of any deficiencies. Contracting authorities are responsible for monitoring and evaluating the application of these instructions within their own departments and agencies.
Revised June 9, 2003. The contents of this appendix contain both mandatory requirements as well as guidelines.
1.1 This Appendix supplements the provisions of Section 4., Policy requirements, and article 4.2, Related requirements and applies to all categories of contracted services that may be provided by temporary help firms. The services provided by temporary help firms are traditionally used against vacancies during staffing action, when a public servant is absent for a short period, or when there is a temporary work load increase for which insufficient staff is available. Public Works and Government Services Canada is responsible for qualifying firms and negotiating basic rates under master standing offers. Under this arrangement, the Crown receives a consistent product at the lowest market rates, and private sector firms are satisfied.
1.2 Contracting authorities subject to the contracting policies and guidelines of the Treasury Board enter into separate contracts with temporary help firms each time a call-up is made against a standing offer for the supply of temporary help services. Provided that departments consider services available under the standing offer, they have the choice of acquiring temporary help through the PWGSC standing offer, establishing their own standing offers, or of dealing directly with other suppliers on a case by case basis.
1.4 When contracting for the services of individuals, including temporary help, contracting authorities should carefully
review the circumstances in order to avoid establishing an employer-employee relationship which would be in conflict with
the Public Service Employment Act or the Public Service Staff Relations Act and other key legislation,
such as the Employment Insurance Act and the Canada Pension Plan. For guidance in assessing an
employer-employee relationship, either seek legal advice or consult the Canada Customs and Revenue Agency which provides
guidance, such as "Employee or Self-Employed?", publication numberRC4110, or visit
http://www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-e.html. Should there be any uncertainty, the contract should be signed at a level more senior than the individual who would normally approve the initial entry into the contract.
2.1 Public Works and Government Services information document
2.1.1 Public Works and Government Services provides an information document to contracting authorities describing the present special arrangements for administrative support categories in the National Capital Region as well as standard contracting practices for all other requirements. Methods of supply and contracting procedures appropriate for particular regions and categories of services have been established by Public Works and Government Services with due consideration for best value.
2.2 Public Works and Government Services standing offers
2.2.1 For administrative support and other categories both in the National Capital Region and other regions across Canada, as required in article 4.2, Related requirements, contracting authorities should give consideration to obtaining these services directly from companies with which the Department of Public Works and Government Services has entered into temporary help standing offers. Contracting authorities have the option of acquiring temporary help through a standing offer established by Public Works and Government Services, or by dealing directly, by means of a separate departmental standing offer or a contract with other suppliers.
22.214.171.124 Through the various regional offices across Canada, Public Works and Government Services issues a list of companies, including rates, terms and conditions, which contracting authorities may utilize in the engagement of temporary help. Public Works and Government Services, in consultation with the Public Service Commission, specifies in its standing offers with temporary help firms, the types and levels of employees to be provided and, where applicable, the test standards to be met by firms and the qualification standards required of employees. Public Works and Government Services requires the temporary help firms to replace immediately any of their employees whose performance is found to be unsatisfactory to the client department.
2.2.2 Call-ups against PWGSC standing offers should be reported to Public Works and Government Services.
2.2.3 The contractual arrangements of certain Public Works and Government Services standing offers provide alternative sources of supply with a range of different rates for similar services. In making call-ups against these standing offers, client contracting authorities should select specific firms based on cost-effectiveness considerations. Normally, the lowest-priced service should be chosen. It should be noted that sources supplying better quality services are not necessarily more highly-priced. Contracting authorities should not automatically select the same source for all requirements.
2.3 Authorized personnel
2.3.1 Departments and agencies should ensure that there is consistency of practice in obtaining temporary help services. Each department or agency is expected to inform Public Works and Government Services of the names of those persons who are authorized to request contracting action from Public Works and Government Services or to make call-ups against the standing offers. Such persons will generally be responsible officers performing personnel functions in the organization. The number of persons so authorized should be kept to a minimum.
2.3.2 Public Works and Government Services are to ensure that suppliers do not accept call-ups against standing offers by persons who are not specifically authorized.
2.4 Quality control
2.4.1 Contracting authorities should ensure that temporary help employees meet qualification standards specified in the contract by:
2.4.2 It is important to maintain quality control over temporary help services provided under contract. Quality can be monitored by a co-ordinated analysis of inadequate performance, including rejections of persons provided under contract. In accordance with the procedures provided by Public Works and Government Services, contracting authorities should provide Public Works and Government Services with a summary of those firms which consistently are unable to supply personnel as well as instances in which performance was less than satisfactory, including cases when persons called up under standing offers were rejected because of inadequate performance.
2.5.1 Under sections 33 and 34 of the Financial Administration Act, contracting authorities are responsible for the audit of supplier invoices and the certifications required.
3.1 All expenditures incurred for the services of temporary help, excluding finder fees and Public Works and Government Services charges, should be charged to the appropriate economic object, "Temporary Help Services" of Standard Object 04, "Professional and Special Services". As a result, this economic object is to be used solely for expenditures made under this policy.
Published March 6, 1998. The contents of this appendix contain both mandatory requirements as well as guidelines.
1.1 Use of the competitive process
Consultants and professionals can be chosen using competitive bidding in several ways. This Appendix outlines a number of selection methods, allowing for varying cost considerations, that are considered appropriate for the circumstances indicated. Contracting authorities are responsible for choosing the method most appropriate to each procurement.
1.2 Best value
Consultants and professionals can be evaluated against one or more of the following criteria:
1.3 The qualifications of the consultant or professional must always be a factor in deciding who will do the work. Provided the technical evaluation of the consultant or professional is valid, the proposed approach, including price and terms offered, must be acceptable before a contract can be awarded.
1.4 A degree of competition among contractors is possible even when the selection cannot be based on price alone, by using the competitive proposals method (see article 10.7.11 of the Contracting Policy Guidelines). It is sometimes more appropriate in engineering, research and development, and consulting services, to base selection on the level of performance offered rather than on price alone. Proposal competitions may take one of several forms, including design competition, as outlined in article 10.7.16 of the Contracting Policy Guidelines. Because these proposals would not contain a firm price, the definition of valid bid cannot apply and consequently the lower non-competitive contracting dollar limits is applicable.
1.5 When the expense of a proposal competition is not warranted, as when the contract is less than $25,000, a consultant or professional can be chosen based entirely on qualifications. This form is preferable to any method which does not compare a number of qualified firms. Although this too does not qualify as a competitive contract, it can be applied in a manner similar to an employment competition.
1.6 In some circumstances, it may be appropriate to direct a contract to a particular firm without any competition as permitted by section 6 of the Government Contracts Regulations. Contracting authorities shall fully document the circumstances in each case which justify using this selection method.
1.7 Depending on the level of detail required, a proposal may cost a substantial amount compared to the value of the work proposed. If a large number of costly proposals are submitted in response to each proposal call, the increase in overhead costs to the industry will ultimately accrue to clients. In addition, evaluating these proposals will take longer. Proposals should not be solicited from a large number of consultants or professionals. Screening a preliminary list, based on inventory data or information from consultants or professionals, should establish a short list of enough of them to produce competition.
1.8 Selection of a short list. In developing a short list of consultants or professionals, the available information should be assessed against the following factors:
1.9 A reasonable number of possible contractors should then be selected for a short list using the available data outlined above. Competitive proposals could then be invited from the consultants or professionals on this short list who are interested in the work.
2.1 Basis of payment
When it is not possible or feasible to calculate the basis of payment as a fixed price that must be specified in the contract, payment may be calculated, using one of the following methods:
Overtime will not apply to consultants and professionals paid per diem, unless the contract provides it and it is specifically authorized by the contracting authority. Compensation for actual overtime worked by the staff of the consultant or professional, as authorized by the contracting authority, must be based on payroll costs for normal working hours plus the applicable overtime premium. The multiplying factor for overhead must not be applied to the overtime premium.
2.3 Expenses and disbursements
Normally the consultant or professional is reimbursed for the actual cost of direct out-of-pocket expenses or disbursements incurred during the course of work as stipulated in the contract and subject to the prior approval of the contracting authority.
Published May 31, 1993. The contents of this appendix contains mandatory annual reporting requirements.
1.1 Departments and agencies are to submit an annual report on the total number and dollar amounts of construction and service contracts (as defined in the Government Contracts Regulations), including amendments awarded within a department's own departmental authorities.
1.2 Data on contracting activities is to be broken down by Basic contracting limits and Exceptional contracting limits (as defined in the Treasury Board Contracts Directive) and further organized into competitive, non-competitive and amendments. Information on the following items is to be excluded from the report:
2.1 In addition to reporting as per government departments and agencies, the Department of Public Works (PWC) is to report on all contracts awarded on behalf of each of its clients or in support of PWC programs. PWC no longer reports on real property leasing activities.
3.1 The Department of Supply and Services (SSC) is required to report annually the total number and dollar amounts of construction, goods and services contracts (as defined in the Government Contracts Regulations), including amendments, awarded within departmental authority on behalf of each government department or in support of SSC programs.
3.2 Data on contracting activities is to be broken down by Basic contracting limits (subdivided into construction, goods and services), Exceptional contracting limits (as defined in the Treasury Board Contracts Directive), and non-discretionary contracts. These categories are to be further organized into competitive, non-competitive, and amendments. Information on the following items is to be excluded from the report:
All contracting authorities are to report to the Treasury Board Secretariat on contracting activities, within two months subsequent to the end of the fiscal year.
If convenient, departments may include these contracts or contract proposals in the report, but must then identify subtotals for them. If this cannot be done readily, departments may request this information from the Treasury Board Secretariat.
|Title of form||No. of form||Initiated by||Available from||
|Annual Contracting Activity Report by Department/Agency||TBS/SCT 350-91
(Rev. 1993/03) A
|Annual Contracting Activity Report by Supply and Services Canada||TBS/SCT 350-91
(Rev. 1993/03) B
|Annual Contracting Activity Report by Public Works Canada||TBS/SCT 350-91
(Rev. 1993/03) C
|Annual Contracting Activity Report by Treasury Board Secretariat||TBS/SCT 350-91
(Rev. 1993/03) D
|Annual Contracting Activity Report Roll Up||TBS/SCT 350-91
(Rev. 1993/03) E
Published August 2012
Only insurance companies that have been licensed by a Canadian federal, provincial or territorial regulator to provide financial security when operating in the jurisdiction of the regulator may provide financial security for federal Crown procurement contracts.
The source lists of companies licensed to provide surety within Canada can be found through the Canadian federal, provincial or territorial regulators' websites listed below. These sites will provide the latest and most accurate information.
|Alberta||Superintendent of Insurance of Alberta||Search Companies of Superintendent of Insurance (Alberta)|
|British Columbia||Financial Institutions Commission of British Columbia||Search Companies of Financial Institutions Commission (British Columbia)|
|Manitoba||Financial Institutions Regulation Branch of Manitoba||Annual Reports of Financial Institutions Regulation Branch (Manitoba)|
|New Brunswick||Justice and Attorney General - Insurance Branch of New Brunswick||Search Companies of Justice and Attorney General - Insurance Branch (New Brunswick)|
|Newfoundland and Labrador||Superintendent of Insurance of Newfoundland and Labrador||Search Companies of Superintendent of Insurance (Newfoundland and Labrador)|
|Northwest Territories||Superintendent of Insurance of Northwest Territories||Annual Reports of Superintendent of Insurance (Northwest Territories)|
|Nova Scotia||Superintendent of Insurance of Nova Scotia||Search Companies of Superintendent of Insurance (Nova Scotia)|
|Nunavut||Superintendent of Insurance of Nunavut||Annual Reports of Superintendent of Insurance (Nunavut)|
|Ontario||Financial Services Commission of Ontario of Ontario||Search Companies of Financial Services Commission of Ontario|
|Prince Edward Island||Consumer, Labour and Financial Services of Prince Edward Island||Contact Consumer, Labour and Financial Services (Prince Edward Island)|
|Quebec||Quebec Financial Markets Regulator||Search Companies of Quebec Financial Markets Regulator|
|Saskatchewan||Saskatchewan Financial Services Commission||Search Companies of Saskatchewan Financial Services Commission|
|Yukon||Superintendent of Insurance of Yukon||List of Companies of Superintendent of Insurance (Yukon) (PDF document - 44 KB)|
For the convenience of the federal procurement community, Treasury Board of Canada Secretariat provides the following administrative compilation of acceptable bonding companies, based on information collected from federal, provincial and territorial sources. However, for absolute certainty, contracting authorities should verify the status of companies with the official lists of the relevant regulators.
Surety bonds issued by the following companies may be accepted provided that the contract of suretyship was executed in a province in which the company is licensed to do business as indicated in brackets.
Published September 8, 1997.
Published March 6, 1998.
1.1 The Federal Building Initiative is designed to help departments make investments to improve energy efficiency in their buildings. Canadian utility companies are promoting demand side management programs to reduce electrical consumption. Financial incentives are aimed at various consumer groups including the federal government.
1.2 Custodian departments have contract entry authority needed to enter into agreements with utility companies and the private sector to make energy efficiency improvements to federal buildings.
1.3 Efficiency improvements may include installation of high efficiency lights and motors, modification of heating, ventilation and air conditioning systems, upgrading building envelopes, better design for new construction, and changes to operating and maintenance practices. Cogeneration of electricity may be possible in some cases
2.1 The Treasury Board has authorized any contracting authority to enter into and amend a service contract to acquire energy services, which may include energy supply, energy efficiency improvements, management services, energy management monitoring and training, if the total under the contract, including any amendments does not exceed $25 million on condition that the first energy management contract over $1 million be submitted to the Treasury Board for approval.
2.2 The supply of energy as well as management and efficiency improvements should be obtained through the use of energy management contracts, as follows:
2.3 Each energy management contract presents a specific situation that must be evaluated on its own merits. Where economically feasible, energy management contracts maybe structured for a partial sharing of the savings over a prolonged pay back period. Cost/benefit analyses should be carried out to determine the most appropriate payback period.
2.4 The contracts will include goods procurement related to the energy services. As well, the total package must meet the requirements set out in the North American Free Trade Agreement, in the World Trade Organization Agreement on Government Procurement and in the Agreement on Internal Trade.
2.5 Under the Federal Buildings Initiative, Natural Resources Canada will assist federal government departments to improve the energy efficiency of their facilities without compromising the work environment of employees. The services available will include model agreements for savings financing and utility incentives; health and safety guidelines; training packages for building operators and managers; information packages for federal employees; model long-term energy management plans; technical specification guidelines; model contract and bid packages; and qualified bidders list for firms to conduct energy efficiency improvements.
Published March 6, 1998. This appendix contains mandatory instructions.
1.1 For the purpose of this policy, a standby letter of credit (hereinafter referred to as "letter of credit") means any arrangement, however named or described, whereby a financial institution (the "Issuer"), acting at the request and on the instructions of a customer (the "Applicant"), or on its own behalf, is to make a payment to or to the order of the Crown, as the beneficiary, or is to accept and pay bills of exchange drawn by the Crown, or authorises another financial institution to effect such payment, or accept and pay such bills of exchange, or authorises another financial institution to negotiate, against written demand(s) for payment, provided that the terms and conditions of the letter of credit are complied with.
1.2 A bid support letter of credit is a letter of credit pursuant to which demand may be made if the proposed contractor refuses or fails to enter into a written contract in accordance with the terms and conditions of the bid or fails to provide the required contract security.
1.3 A contract support letter of credit is a letter of credit pursuant to which demand may be made if the contractor, having entered into a contract with the Crown, does not perform the contract in accordance with the terms and conditions of that contract.
1.4 The expression "member of the Canadian Payments Association" is defined in the Canadian Payments Association Act.
1.5 The expression "UCP" means the International Chamber of Commerce (ICC) Uniform Customs and Practice for Documentary Credits, 2007 Revision, ICC Publication No 600.
2.1 The UCP provides that letters of credit, by their nature, are separate transactions from the contracts on which they may be based and financial institutions are in no way concerned with or bound by such contracts, even if any reference whatsoever to such contracts is included in the letters of credit. In letters of credit operations, all parties concerned deal with documents, and not with goods, services and/or other performances to which the documents may relate.
2.2 The undertaking of a financial institution to pay, accept and pay bill(s) of exchange or negotiate and/or to fulfil any other obligation under the letter of credit, is not subject to claims or defences by the Applicant resulting from its relationships with the financial institution or the Crown.
3.1 A letter of credit which is issued by a financial institution which is a member of the Canadian Payments Association, may be accepted by a contracting authority either to provide an incentive for entry into or performance of a contract, or to provide a source of funds to mitigate damages if the successful bidder fails to enter into or perform the contract.
3.2 An irrevocable letter of credit which is issued by a financial institution (the "Issuer") which is not a member of the Canadian Payments Association is acceptable provided it is confirmed by a financial institution (the "Confirmer") that is a member of the Canadian Payments Association and is otherwise in compliance with this policy.
3.3 A revocable letter of credit is one that may be amended or cancelled by the Issuer at any moment and without prior notice to the Crown as beneficiary. The Crown shall only accept letters of credit that clearly specify that they are irrevocable or are deemed to be irrevocable pursuant to article 6 c) of the UCP.
3.4 A letter of credit described in this section may be accepted as an alternative to bid or contract security for all contracts.
3.5 A letter of credit shall:
4.1 The letter of credit may be issued or confirmed in either official language and shall be on the letterhead of the Issuer or Confirmer. The format is left to the discretion of the Issuer or Confirmer.
5.1 The face amount of a bid or contract support letter of credit for all types of contract is to be determined by the contracting authority, taking into account pertinent factors, such as the inherent risks of the contract and the custom generally accepted in the particular profession or trade involved.
5.2 The face amount of a contract support letter of credit may be increased or 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.
5.3 Any letter of credit received by the Crown must have an appropriate expiry date. The letter of credit should not have its expiry coincide with the projected cessation of the risk which it covers: for instance, the expiry date stated in the letter of credit should not be the same date as that which is projected for the award of the contract or the completion of the work. Rather, the expiry date should allow for a comfortable turn-around time from the estimated date of award of contract or completion of the work, to ensure that the contracting authority is satisfied that the bidder or contractor has discharged its obligations for which the letter of credit was provided. If the contractor has not met its obligations, the contracting authority must have sufficient time to prepare and present the required demand for payment under the letter of credit.
6.1 After an offer is accepted within the specified time after the closing date for bidding, and if the contractor refuses to enter into the contract or refuses or is unable to furnish any required contract security or contract support letter of credit, the Crown may demand payment under the bid support letter of credit in accordance with its terms. Proceeds from the letter of credit shall be applied in accordance with the terms and conditions governing the bid solicitation.
6.2 During the performance of a contract, if the contractor does not comply with all the terms and conditions of the contract, the Crown may demand payment under the contract support letter of credit in accordance with its terms. Proceeds from the letter of credit shall be applied in accordance with the terms and conditions of the contract.
6.3 The Crown demands payment under the terms and conditions of a letter of credit by presenting one or more written demand(s) for payment, signed by an authorized departmental representative identified in the Letter of Credit by his office.
7.1 The letters of credit used pursuant to this policy must contain reference to and follow the practices of the International Chamber of Commerce (ICC) Uniform Customs and Practice for Documentary Credits, 2007 Revision in force since January 1, 1994, known as ICC Publication No 600.
8.1 Where a Letter of Credit is received by a contracting authority, the contracting authority shall hold the Letter of Credit in a place adequate for safekeeping.
Published February 1, 1995. This appendix is a guideline for the use of surety bonds for government.
The Claimant's Payment Bond form contained in this Appendix is a new security option that may be used in construction contracts effective January 1, 1994. When one or more claims are made against the prime contractor, the posting of a Claimant's Payment Bond by the prime contractor will permit regular payments by the Crown under the contract while the disputes are being settled between the various parties. The use of the bond in construction contracts provides a remedy to contractors whose cash flow would otherwise suffer as a result of claims against them.
The Labour and Material Payment Bond contained in this Appendix and the current versions of the Bid Bond and the Performance Bond are all under revision, and should continue to be used until further notice.
Labour and Material Payment Bond
No. ______________________________________ $ ______________________
KNOW ALL PERSONS BY THESE PRESENTS, That _________________________ as Principal, hereinafter called the Principal, and _________________________ as Surety, hereinafter called the Surety, are, subject to the conditions hereinafter contained, held and firmly bound unto __________________________________________________________ as Obligee, hereinafter called the Crown, in the amount of ____________________ Dollars ($______________), lawful money of Canada, for the payment of which sum, well and truly to be made, the Principal and the Surety bind themselves, their heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents.
SIGNED AND SEALED this ________ day of _______________ 19 ____
WHEREAS, the principal has entered into a Contract with the Crown, dated the __________________ day of _________________ 19 ___ for___________________________________________ which contract is by reference made a part hereof, and is hereinafter referred to as the Contract.
NOW, THEREFORE, THE CONDITIONS OF THIS OBLIGATION are such that, if payment is promptly made to all Claimants who have performed labour or services or supplied material in connection with the Contract and any and all duly authorized modifications and extensions of the Contract that may hereafter be made, notice of which modifications and extensions to the Surety being hereby waived, then this obligation shall be void, otherwise it shall remain in full force and effect, subject, however, to the following conditions:
For the purpose of this bond, a Claimant is defined as one having a direct contract with the Principal or any Sub-Contractor of the Principal for labour, material or both, used or reasonably required for use in the performance of the Contract, labour and material being constituted to include that part of water, gas, power, light, heat, oil, gasoline, telephone service or rental of equipment (but excluding rental of equipment where the rent pursuant to an agreement is to be applied towards the purchase price thereof) directly applicable to the Contract.
For the purpose of this bond, no payment is required to be made in respect of a claim for payment for labour or services performed or material supplied in connection with the Contract that represents a capital expenditure, overhead or general administration costs incurred by the Principal during the currency or in respect of the Contract.
The Principal and the Surety hereby jointly and severally, or, where this Bond is subject to the law of the Province of Quebec, solidarily, agree with the Crown that if any Claimant has not been paid as provided for under the terms of its contract with the Principal or a subcontractor of the Principal before the expiration of a period of ninety (90) days after the date on which the last of such Claimant's labour or service was done or performed or materials were supplied by such Claimant, the Crown may sue on this bond, have the right to prosecute the suit to final judgement for such sum or sums as may be due and have execution thereon; and such right of the Crown is assigned by virtue of Part VIII of the Financial Administration Act to such Claimant.
For the purpose of this bond the liability of the Surety and the Principal to make payment to any claimant not having a contract directly with the Principal shall be limited to that amount which the Principal would have been obliged to pay to such claimant had the provisions of the applicable provincial or territorial legislation on lien or privileges been applicable to the work. A claimant need not comply with provisions of such legislation setting out steps by way of notice, registration or otherwise as might have been necessary to preserve or perfect any claim for lien or privilege which the claimant might have had. Any such claimant shall be entitled to pursue a claim and to recover judgment hereunder subject to the terms and notification provisions of the Bond.
Labour and Material Payment Bond
Any material change in the Contract between the Principal and the Crown shall not prejudice the rights or interest of any Claimant under this bond who is not instrumental in bringing about or has not caused such change.
No suit or action shall be commenced hereunder by any Claimant:
The amount of this bond shall be reduced by and to the extent of any payment or payments made in good faith hereunder.
The Surety shall not be entitled to claim any moneys relating to the Contract and the liability of the Surety under this Bond shall remain unchanged and, without restricting the generality of the foregoing, the Surety shall pay all valid claims of Claimants under this Bond before any moneys relating to the Contract held by the Crown are paid to the Surety by the Crown.
The Surety shall not be liable for a greater sum than the amount specified in this bond.
IN TESTIMONY WHEREOF, the Principal has hereto set its hand and affixed its seal, and the Surety has caused these presents to be sealed with its corporate seal duly attested by the signature of its authorized signing authority, the day and year first above written.
SIGNED, SEALED AND DELIVERED
in the presence of:
Affix Corporate seal if applicable
Claimant's Payment Bond
Bond Posted as Security Pursuant to the Contract Documents.
KNOW ALL PERSONS BY THESE PRESENTS, That ___________________________ as Principal, hereinafter called the Principal, and __________________________________ as Surety, hereinafter called the Surety, are, subject to the conditions hereinafter contained, held and firmly bound unto ___________________________________________________ as Obligee, hereinafter called the Crown, in the amount of __________________________ Dollars ($______________), lawful money of Canada, for the payment of which sum, well and truly to be made, the Principal and the Surety bind themselves, their heirs, executors, administrators, successors and assigns, jointly and severally, or, where this bond is subject to the law of the Province of Quebec, as solidary debtors, and firmly by these presents.
SIGNED AND SEALED this ________ day of _______________ 19 ____
WHEREAS, the principal has entered into a Contract with the Crown, dated the __________________________ day of ____________________ 19 ___ for________________________
AND WHEREAS, the Crown has notified the Principal in writing of its intention to withhold contract funds, pursuant to Clause __________ of the Contract for the following claim(s) registered against the Contract:
Date of Notification: _________
NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION is such that this Bond stands in lieu of and as security for the release to the Principal of funds which otherwise would have been withheld by the Crown, by reason of Clause _______ of the Contract on account of the aforementioned claim(s).
To the intent and condition that if the Principal shall pay or cause to be paid the said claim(s) as the Principal may be directed by the Crown to pay, which claim(s)otherwise the Crown would have been entitled to pay by reason of Clause _________ of the Contract, then this obligation shall be void, otherwise it shall remain in full force and effect.
The Crown may sue on this Bond, have the right to prosecute the suit to final judgment for such sum or sums as may be due and have execution thereon; and such right of the Crown is assigned by virtue of Part VIII of the Financial Administration Act to each such aforementioned claimant.
Provided that, no suit or action shall be instituted by the Crown or its assignees herein against the Surety, unless the claimant(s) shall have commenced the proceedings to determine the right to payment pursuant to Clause _______ of the Contract within one year from the date of notification referred to in Clause _______ of the Contract.
Provided further that:
IN WITNESS WHEREOF these presents have been executed by the Principal under its hands and seal and by the Surety by its seal and by the signature of its Attorney this________________ day of _______________ 19____.
SIGNED, SEALED AND DELIVERED
in the presence of:
Affix Corporate seal if applicable
Bond No. ..........................
KNOW ALL PERSONS BY THESE PRESENTS, that ........................................... as Principal, hereinafter called the Principal, and ........................................... as Surety, hereinafter called the Surety, are, subject to the conditions hereinafter contained, held and firmly bound unto ......................................................, as Obligee, hereinafter called the Crown, in the amount of ................................................Dollars ($ ................ ), lawful money of Canada, for the payment of which sum, well and truly to be made, the Principal and the Surety bind themselves, their heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents.
SIGNED AND SEALED this ..........day of ................. 20.....
WHEREAS, the Principal has submitted a written tender to the Crown, dated the ..........day of .............., 20.....,
NOW, THEREFORE, THE CONDITIONS OF THIS OBLIGATION are such that if:
then this obligation shall be void; otherwise it shall remain in full force and effect.
PROVIDED, HOWEVER, that the Surety and the Principal shall not be liable to the Crown for an amount greater than the amount specified in the Bond.
PROVIDED FURTHER that the Surety shall not be subject to any suit or action unless such suit or action is instituted and process therefore served upon the Surety at its Head Office in Canada, within twelve (12) months from the date of this Bond.
IN TESTIMONY WHEREOF, the Principal has hereto set its hand and affixed its seal, and the Surety has caused these presents to be sealed with its corporate seal duly attested by the signature of its authorized signing authority, the day and year first above written.
SIGNED, SEALED AND DELIVERED in the presence of:
Note: Affix Corporate seal if applicable.
Bond No. ..........................
KNOW ALL PERSONS MEN BY THESE PRESENTS, that ........................................... as Principal, hereinafter called the Principal, and ........................................... as Surety, hereinafter called the Surety, are, subject to the conditions hereinafter contained, held and firmly bound unto ...................................................... as Obligee, hereinafter called the Crown, in the amount of ................................................ Dollars ($ ................ ), lawful money of Canada, for the payment of which sum, well and truly to be made, the Principal and the Surety bind themselves, their heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents.
SIGNED AND SEALED this day of , 20 ....................................................
WHEREAS, the Principal has entered into a Contract with the Crown, dated ............................. for
which Contract is by reference made a part hereof, and is hereinafter referred to as the Contract.
NOW, THEREFORE, THE CONDITIONS OF THIS OBLIGATION are such that if the Principal shall well and faithfully observe and perform all the obligations on the part of the Principal to be observed and performed in connection with the Contract, then this obligation shall be void, otherwise it shall remain in full force and effect, subject, however, to the following conditions:
IN TESTIMONY WHEREOF, the Principal has hereto set its hand and affixed its seal, and the Surety has caused these presents to be sealed with its corporate seal duly attested by the signature of its authorized signing authority, the day and year first above written.
SIGNED, SEALED AND DELIVERED in the presence of:
Published April 1, 1992. The contents of this appendix contain both mandatory requirements as well as guidelines.
1.1 This appendix supplements the provisions of Section 4., Policy requirements, and article 4.2.22, Related requirements.
2. The objective of this policy is the continued implementation of the contract priority provisions of the James Bay and Northern Quebec Agreement (JBNQA) in relation to contracts created by projects initiated or conducted by the Crown or its agents, delegates, contractors or sub-contractors.
3. The policies and implementing measures shall, to the greatest extent possible, be designed to achieve the following objectives:
4.1 Makivik, a corporation constituted as the Inuit Native Party for the purposes of the JBNQA, has the responsibility to prepare and maintain a comprehensive list of Inuit firms, which will include information on the goods and services those firms would be in a position to furnish in relation to actual or potential government contracts. Makivik shall undertake the necessary measures to ensure that this data is maintained and updated on a continuous basis.
4.2 Makivik shall ensure that the List of Inuit Firms is provided to the federal government departments and agencies active in the Territory.
5.1 Contracting authorities shall use the List of Inuit Firms for purposes of requesting Inuit firms to solicit bids, but shall not restrict the ability of any Inuit firm to submit bids for government contracts, in accordance with the Bid Invitation process where bids are invited by public notice.
5.2 The Crown, namely the Common Service Agents shall, upon the request of Makivik, provide reasonable assistance in familiarizing Inuit firms with the contracting procedures of the Crown.
5.3 In the planning stage of government contracts for the provision of goods, services, construction, or leases in the Territory, contracting authorities shall undertake all reasonable measures to provide opportunities to qualified Inuit firms to compete for and obtain such contracts. Contracting authorities should consider, but not necessarily be limited to, the following measures:
6.1 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 the contracting authority for the awarding of government contracts in the Territory:
7.1 Wherever practicable and consistent with sound procurement management, contracting authorities will first solicit bids from within the Territory.
7.2 Where the Crown intends to solicit bids for government contracts in the Territory, the contracting authority will make all possible attempts to award contracts to qualified Inuit firms.
7.3 Where the Crown intends to solicit bids for government contracts in the Territory, the contracting authority shall take all reasonable measures to determine if there are Inuit firms qualified to perform government contracts.
7.4 Where it is determined that there is a single firm within the Territory qualified to perform a government contract, the contracting authority will solicit that firm to submit a bid for the government contract. The contract may be awarded upon negotiation of acceptable terms and conditions.
7.5 Where the Crown intends to solicit bids from more than one qualified firm within the Territory, the contracting authority shall take all reasonable measures to determine if there are Inuit firms qualified to perform the government contract, and shall solicit bids from those Inuit firms.
7.6 Where a contract has been awarded it is the responsibility of the contracting authority to ensure that the contract document contains appropriate terms and conditions to make certain that sub-contractors to the contractor are also subject to the intent and the specific provisions of the contract.
8.1 Wherever practicable, and consistent with sound procurement management, contracting authorities will first invite bids from within the Territory.
8.2 Where the Crown intends to invite bids for government contracts to be performed in the Territory, contracting authorities shall take all reasonable measures to inform Inuit firms of such bids, and to provide Inuit firms with a fair and reasonable opportunity to submit bids.
8.3 Where the Crown intends to invite bids for government contracts to be performed in the Territory, the Bid Invitation process shall take into account the Bid Evaluation Criteria found in article 6.
8.4 Where a contract has been awarded, it is the responsibility of the contracting authority to ensure that the contract document contains appropriate terms and conditions to make certain that sub-contractors to the contractor are also subject to the intent and the specific provisions of the contract.
means any procurement contract between the Crown and a party other than the Crown, and includes:
means an entity which complies with the legal requirements to carry on business in Northern Quebec, and which:
The Agreement Between the Government of the Republic of Korea and the Government of Canada on the Procurement of Telecommunications Equipment was terminated, effective September 1, 2005.
The Agreement Between the Government of the Republic of Korea and the Government of Canada on the Procurement of Telecommunications Equipment was terminated, effective September 1, 2005.
Reservid for future use.