Purpose
The purpose of Policy Notification (PN)-155 is to introduce a new series of pricing clauses to support the use of the Practitioner’s Guide for Procurement Pricing by Public Works and Government Services Canada Acquisitions Program (AP) contracting officers.
PN-155 provides updates to the Supply Manual and updates the Standard Acquisitions Clauses and Conditions (SACC) Manual to add a new 8000 series of pricing clauses recommended for use by AP contracting officers in conjunction with the Practitioner’s Guide for Procurement Pricing.
Effective date
PN-155 is effective immediately.
Expected outcomes
- Increase awareness of leading pricing practices to support current guidance in procurement to maximize value for Canadians;
- Add pricing clauses designed to yield, in particular cases, substantial advantages to the buyer and the supplier and motivate contractors’ performance and competitiveness;
- Strengthen Canada’s capability and capacity to manage pricing throughout the lifecycle of a contract, contributing to sound stewardship of public funds, procurement modernization and modern comptrollership; and
- Introduce a new series of pricing clauses and processes for use by the contracting officers.
Background
As a result of an independent study dated December 2015 (Department’s response), several components of Canada’s pricing framework are being adapted to incorporate innovative pricing practices, more flexibility and greater options for strategic pricing, and to align pricing with desired procurement performance objectives to achieve best value for Canadians.
Several consultations held since then have provided insights and best practices on the application of pricing and profit principles to support the delivery of optimal value especially in negotiated contracts. This involves determining a contract price when market prices are not available and/or negotiated pricing is required.
This PN provides new standard clauses to be used in support of the guidance outlined in the Practitioner’s Guide for Procurement Pricing.
Requirements and responsibility
The AP contracting officer leads the development of the procurement process and a key element of this process is to establish the contract price. Public Works and Government Services Canada (PWGSC) has dedicated in-house Chartered Professional Accountants (CPAs) for the provision of financial expertise to assist AP contracting officers as required or as stipulated in the Directive on the Use of Cost and Price Analysis Services
(PDF file – 314KB) (Help on File Formats) and Guideline on the Use of Cost and Price Analysis Services (PDF file – 321KB) (Help on File Formats).
Once the pricing approach is authorized through standard procurement approval process, the contracting officer will include all appropriate clauses for the basis of payment chosen. The contracting officer will also ensure all aspects of the price are clearly documented in the contract such as in an Annex. A detailed breakdown of the cost, profit and incentives should be included in the contract Basis of Payment section, where applicable.
Guidance
The Practitioner’s Guide for Procurement Pricing provides more information on building a common understanding among all stakeholders in regards to pricing components and options. This includes guidance on risk sharing, responsibilities and the encouragement of innovation through the use of pricing approach. More specifically, Sections 4 and 5 of the new guidance relating to basis of payment, incentives, costing, profit determination and the use of alternative pricing approaches complement Chapters 4 and 10 of the Supply Manual.
The updates to the Supply Manual and the SACC Manual referred to in this PN support the approaches outlined in the Practitioner’s Guide for Procurement Pricing.
The Directive on the Use of Cost and Price Analysis Services (PDF file – 314KB) (Help on File Formats) and Guideline on the Use of Cost and Price Analysis Services (PDF file – 321KB) (Help on File Formats) describe the professional accounting services available to assist contracting officers involved in identifying financial and pricing risks and determining the most suitable pricing approach of a procurement.
Revisions to the Supply Manual
The Supply Manual has been updated to reflect this PN. For more details, refer to the Affected Supply Manual sections listed below.
Revisions to the Standard Acquisitions Clauses and Conditions (SACC) Manual
The SACC Manual has been updated to reflect this PN. For more details, refer to the Affected SACC Manual sections listed below.
Revisions to the Standard Procurement Templates
There are no revisions to the Standard Procurement Templates.
Contact information
For enquiries related to PN-155 and any additional information on the use of pricing clauses, please direct your enquiries to PSSS/PSD by email to the following address: DSPVACAssistance.CCAAPDAssistance@tpsgc-pwgsc.gc.ca.
Questions related to the Supply Manual can be sent by email to the following address: tpsgc.paspspublications-apspspublications.pwgsc@tpsgc-pwgsc.gc.ca.
Questions related to the SACC Manual can be sent by email to the following address: tpsgc.outilsdapprovisionnement-procurementtools.pwgsc@tpsgc-pwgsc.gc.ca.