Data Standard on Classification of Procurement Items

This standard takes effect on February 2, 2015. Departments will be required to implement this standard on or before April 1, 2017.  This standard applies to procurement item information associated with financial events which occur on or after the implementation date of the standard.

2.1 This Standard applies to "departments" as defined in Section 2 of the Financial Administration Act (FAA), with the exception of paragraphs (b) and (c), and unless otherwise excluded by specific acts, regulations or orders-in-council.  Throughout this standard, the terms "department", "government-wide" and "across government" refer to these organizations.  Other departments or separate agencies not subject to these provisions are encouraged to meet these requirements as good practice.

2.2 Those portions of Sections 6.2 and 8.1 relating to the role of the Treasury Board of Canada Secretariat in monitoring compliance and directing consequences for non-compliance do not apply to the Office of the Auditor General, the Office of the Privacy Commissioner, the Office of the Information Commissioner, the Office of the Chief Electoral Officer, the Office of the Commissioner of Lobbying, the Office of the Commissioner of Official Languages and the Office of the Public Sector Integrity Commissioner. The deputy heads of these organizations are solely responsible for monitoring and ensuring compliance with the standard in their organizations, as well as for responding to cases of non-compliance in accordance with any Treasury Board instruments providing principles and guidance on the management of compliance.

This standard supports the objectives of the Policy on the Stewardship of Financial Management Systems by outlining the responsibilities of the chief financial officer (CFO) for ensuring that the procurement item classification information (as defined in this standard) is recorded for each acquisition of goods and services, to ensure consistent and reliable financial information government-wide.

This standard defines a common procurement item classification code which allows for consistent recording, aggregation and reporting of financial information within the departmental financial and materiel management system (DFMS).

Classification information associated with procurement items supports a variety of materiel management and financial management requirements of departments and agencies. This information is also used to help meet government-wide needs such as commodity management, and to help meet reporting obligations established through policy instruments and trade agreements including the proactive disclosure of contracts, and the reporting of government procurement activities under the provisions of trade agreements and land claim agreements.

This standard is issued under the authority of sections 7 and 9 of the Financial Administration Act.

This standard is to be read in conjunction with the Policy on the Stewardship of Financial Management Systems, the Policy on the Management of Materiel, and the Contracting Policy.

Additional mandatory requirements are set out in the Directive on the Stewardship of Financial Management Systems, and the Guidelines on Proactive Disclosure of Contracts.

4.1 Definitions to be used in the interpretation of this standard are in Appendix A.

5.1 Objective

To ensure that the procurement records provide consistent financial information government-wide.

5.2 Expected results

Financial information is consistently recorded and maintained in the departmental financial and materiel management system.

6.1 The chief financial officer is responsible for the following:

Developing and maintaining a procurement item classification record, by April 1, 2017, that is integrated with the departmental financial and materiel management system.

Ensuring that the procurement item classification information is used as defined and for its intended purpose and allows for the identification of all data elements of the procurement item record described in Appendix B.

Variances or exemptions to this requirement are not recommended and will need to be justified in a Request for Exemption to the Office of the Comptroller General for consideration prior to any investment decision.

6.2 Monitoring and Reporting Requirements

Chief financial officers are responsible for supporting their deputy heads by overseeing the implementation and monitoring of this standard in their departments, bringing to the deputy head's attention any significant difficulties, gaps in performance or compliance issues, developing proposals to address these, and reporting significant performance or compliance issues to the Office of the Comptroller General.

The Comptroller General is responsible for monitoring departments' compliance with the requirements of this standard and conducting a review at the five year mark from the effective date of the standard.

In instances of non-compliance, the deputy heads are responsible for taking corrective measures within their organizations with those responsible for implementing the requirements of this standard.

Chief financial officers are to ensure corrective actions are taken to address instances of non-compliance with the requirements of this standard. Corrective actions can include requiring additional training, changes to procedures and systems, the suspension or removal of delegated authority, disciplinary action, and other measures as appropriate.

For a range of consequences of non-compliance refer to the Framework for the Management of Compliance, Appendix C: Consequences for Institutions and Appendix D: Consequences for Individuals

Note: This section identifies other significant departments in this policy area. In and of itself, it does not confer an authority.

8.1 Treasury Board Secretariat, Office of the Comptroller General of Canada:

The Office of the Comptroller General is responsible for development, oversight and maintenance of this standard and for providing interpretative advice.  The Office of the Comptroller General is responsible for specifying the authoritative source list (identified in Appendix B) for procurement item classification codes.

Within the area of financial management systems, the Office of the Comptroller General provides functional leadership in determining business process and data requirements by supporting Treasury Board in issuing appropriate policy instruments as and when required to define government-wide data and standardized business processes.

8.2 Public Works and Government Services Canada (PWGSC):

Public Works and Government Services Canada is responsible for the following, as they relate to the authoritative source list of procurement item classification codes:

• Identifying the authoritative version of the procurement item classification codes (i.e., United Nations Standard Products and Services Code (UNSPSC)) and code descriptions;
• providing interpretative advice for the list of procurement item classification codes; and
• developing, sharing and maintaining a concordance table between UNSPSC codes and other coding systems required by federal departments and agencies for trade and treaty reporting purposes.

9.1 Relevant Legislation

Financial Administration Act sections 63 to 65 and subsection 9(1).

9.2 Related Policy Instruments and Publications

• Contracting Policy
• Contracting Policy Notices
• Directive on Acquisition Cards
• Directive on the Stewardship of Financial Management Systems
• Guidelines on the Proactive Disclosure of Contracts
• Policy on Information Management
• Policy on the Stewardship of Financial Management Systems
• Policy on the Management of Materiel
• Treasury Board Information Technology Standard (TBITS-25): Materiel Coding â€" Implementation Criteria

9.3 Related External Standards and Specifications

• Agreement on Internal Trade
• North American Free Trade Agreement
• World Trade Organization Agreement on Government Procurement
• Other international trade agreements (e.g. Canada-Chile Free Trade Agreement)

10.1  Please direct enquiries about this standard to your department's headquarters. For interpretation of this standard, departmental headquarters should contact:

Financial Management Sector
Office of the Comptroller General
Treasury Board Secretariat
Ottawa ON K1A 0R5

Email: fin-www@tbs-sct.gc.ca
Telephone: 613-957-7233
Fax :  613-952-0613

10.2  Members of the public having questions on this standard are requested to contact TBS Public Enquiries for assistance.