Introduction
The purpose of Policy Notification (PN) 03R2 is to inform Acquisitions Program (AP) on changes to policy requirements for contracting with former public servants in receipt of a pension or a lump sum payment.
Effective date
This policy notification is effective immediately.
Policy requirements
To reflect modern comptrollership practices and risk-based oversight, requirements have been amended for the approvals of service contracts with former public servants in receipt of a pension. The Treasury Board Appendix C: Contracts Directive – Part 1 Basic Contracting Limits – reflects the following changes:
Approvals for non-competitive contracts with former public servants
The responsible Minister must now provide contract approval prior to entering into a non-competitive service contract with a former public servant when one of the following conditions exist:
- the former public servant is in receipt of a pension under the Public Service Superannuation Act (PSSA) when the estimated total contract exceeds $200,000;
- the former public servant is in receipt of a pension under the PSSA when the annualized rate of remuneration exceeds $200,000 and the contract term exceeds ninety (90) working days;
- the former public servant is in receipt of a lump sum payment when the total fees payable will exceed $5,000 during the lump sum payment period as provided in the Workforce Reduction Directive made pursuant to the Public Sector Compensation Act, or are former members of the Canadian Armed Forces or the Royal Canadian Mounted Police in receipt of lump sum payments through corresponding force reduction programs, regardless of whether one or more than one contract is involved.
Treasury Board (TB) approval is no longer required in these cases.
Competitive contracting with former public servants
All competitive services contract or contractual arrangements with a former public servant in receipt of a pension are subject to contract-entry authorities delegated by the Minister.
Optional fee abatement for non-competitive contracts
The fee abatement formula, which may be applied to a wage as a means to establish a fair and reasonable contract fee/rate, is no longer mandatory, but remains optional as a useful tool to manage costs for non-competitive contracts.
When determining whether to apply the formula, Acquisitions Program contracting officers may also consider how similar the work to be performed under the contract is to the previous work performed by the contractor as a public servant (i.e. versus a subset of the work performed, or the degree of specialization, and how the pay compares to public service compensation models for similar classifications).
Summary of changes
Supply Manual (SM) changes:
In support of PN-03R2, the Supply Manual has been updated. For more details, refer to the Affected Supply Manual sections listed below.
Standard Acquisition Clauses and Conditions (SACC) Manual changes:
In support of PN-03R2, the SACC Manual has been updated. For more details, refer to the Affected SACC Manual items listed below.
Contact information
For assistance with the application, please contact TPSGC.PAPolitiques-APPolicy.PWGSC@tpsgc-pwgsc.gc.ca.