Policies for Ministers' Offices - January 2011
Part 7 — Contracting
Ministers operate in two distinct environments, each with separate budgets (sources of funds) and legislative and policy frameworks. Specifically, requirements for offices and budgets of MPs are subject to special provisions under the Parliament Act; ministerial offices are subject to the Financial Administration Act, its regulations, and Treasury Board policies.
This includes ensuring that the Government Contracts Regulations are respected and that Financial Administration Act requirements are met. These include section 32 of the Act (making a commitment that the funds to pay for the work to be undertaken are available), section 33 (that all the necessary verification has taken place to ensure a payment is valid), and section 34 (that the work was performed in accordance with the contract).
Ministers' staff is encouraged to consult their departmental procurement specialists when making procurements. The complete text of the Contracting Policy is available on the Treasury Board Secretariat's website.
7.1.1 Treasury Board Contracting Policy
The Contracting Policy is based not only on ensuring that the services and products needed to deliver an office's responsibilities are delivered, but also on demonstrating fairness, openness, and obtaining best value in the spending of taxpayers' money. Key legislative, regulatory, and policy provisions govern government contracting activities. Government contracting must ensure prudence and probity, ensure the pre-eminence of operational requirements, and when possible support long-term industrial and regional development, as well as any other national objectives.
The Government Contracts Regulations require the solicitation of bids except where:
- the need is one of pressing emergency in which delay would be injurious to the public interest;
- the estimated contract expenditure is below $25,000;
- the nature of the work is such that it would not be in the public interest to solicit bids; or
- only one supplier can do the work.
As well, the government is signatory to three trade agreements that affect government procurement and these establish thresholds for various types of procurement:
- the North American Free Trade Agreement (NAFTA), Chapter Ten;
- the World Trade Organization Agreement on Government Procurement (WTO‑AGP); and
- the Agreement on Internal Trade (AIT), Chapter Five.
The Government Contracts Regulations are found in Appendix B of the Contracting Policy. References and links to the trade agreements are provided throughout the policy. In addition to outlining key policy aspects of tendering, the policy also sets limits on a department's authority to contract without first seeking Treasury Board approval.
Contracting authorities must not split contracts or contract amendments in order to avoid obtaining either the approval required by statute and the Contracting Policy or appropriate management approval within the department or agency.
7.2 Employer‑employee relationships
Except for those contracts of employment that are exempted pursuant to section 128 of the Public Service Employment Act, ministers shall not enter into contracts for the services of individuals when the terms of the contract or the actual work situation would result in an employer‑employee relationship. Before entering into a contract, ministers should seek the advice of their departmental legal advisor and procurement specialist to ensure that there is no potential employer‑employee relationship in the contract. For guidance in assessing an employer-employee relationship:
- consult Canada Revenue Agency's publications, e.g. "Employee or Self-Employed," publication number RC4110;
- refer to sections 16.2 and 16.3 of the Contracting Policy; or
- seek legal advice from the Department of Justice Canada where it is not feasible for officials to determine whether a contract is a contract for services or a contract of employment in situations where employment status is not easily identifiable.
7.3 Fee guidelines
There are no specific fee guidelines for contracts, which can be established through a variety of mechanisms. Information can be obtained from departmental specialists or PWGSC. When there is no competition, the onus is on the contractor to prove that any fees charged to the government are comparable or similar to those charged to or obtained from the private sector for comparable or similar work. Contracts may also contain standard terms and conditions identifying an audit provision. Appendix J of the Treasury Board Contracting Policy—Selection process and establishment of fees for consulting and professional services—can be found at Contracting Policy.
7.4 Former government officials
Contracts for the services of former government officials must be able to stand up to the closest public scrutiny. No contract for the services of a former official shall be entered into unless the individual minister is satisfied that it would be in the public interest to do so. Potential contractors may be subject to either the Conflict of Interest Act or the Values and Ethics Code for the Public Service. Other considerations of a general nature are discussed in the Contracting Policy (section 16.8, Appendix B).
7.5 Temporary help services
Government policy is that employees of temporary help agencies are to be used only in those situations where it is not feasible to assign exempt staff, departmental employees, or other Public Service employees. Temporary services are normally engaged when there is a short-term vacancy, when an exempt staff member or Public Service employee is absent for a short period, or when there is a temporary increase in workload for which staff is not available. Ministers must try to meet their short-term needs with existing staff or term appointments.
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 PWGSC has entered into temporary help standing offers. Contracting authorities have the option of acquiring temporary help through a standing offer issued by PWGSC 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 PWGSC.
It should be noted that contract splitting is unacceptable and forbidden. Separate contracts should be entered into with temporary help firms each time a call-up is made against a standing offer for temporary help services.
Contracts for temporary help may pose the risk of creating employer-employee relationships; these must be avoided, as stated in section 7.2.
Additional information on temporary help services can be found in Appendix I of the Contracting Policy—Temporary Help Services.
7.6 Proactive disclosure of contracts over $10,000
On March 23, 2004, the government announced a new policy on the mandatory publication of contracts over $10,000, in order to enhance the role of Parliament and increase transparency so that Canadians are better able to hold Parliament and public sector officials to account.
The new requirement consists of the disclosure of procurement contracts for goods and services dating back to April 1, 2004, for federal departments and agencies listed in schedules I, I.1, and II of the Financial Administration Act (FAA). Ministers' offices are subject to the FAA, its regulations, and Treasury Board policies.
Departments and agencies listed in schedules I, I.1, and II of the FAA are required to report the data on their websites (even where PWGSC has issued the contract on their behalf), within 30 days of the end of each fiscal period and to update it every three months. The contract information reported must include the vendor's name, the number used in the financial system, contract date, description of work, contract period for services, delivery date of goods, and contract value.
Please note that information that would normally be withheld under the Access to Information Act and the Privacy Act does not appear on this website. Contracts such as those relating to national security or law enforcement are exempt from the reporting requirement.
Ministerial staff is encouraged to discuss the requirements for proactive disclosure with departmental contracting officials. For more information on the posting of contract information on-line, please see the Treasury Board of Canada Secretariat's website on Proactive Disclosure.
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