ARCHIVED Advance Contract Award Notices (ACANs)

Introduction

The purpose of Policy Notification (PN)-39U3 is to update the instructions to contracting officers with respect to Advanced Contract Award Notices (ACANs).

Background

These changes are a result of the review of government procurement practices performed by the Office of the Procurement Ombudsman (OPO). The OPO is an independent organization with a government-wide mandate defined in the Department of Public Works and Government Services Act. As part of its mandate, the OPO reviews the practices of departments for acquiring goods and services, to assess their fairness, openness and transparency, and make recommendations for the improvement of those practices. This review provided recommendations on how to improve the ACAN process based on feedback from suppliers and the procurement community.

Effective Date

This PN is effective immediately.

Current Policy

An ACAN is a public notice indicating to the supplier community that a department or agency intends to award a goods, services or construction contract to a pre-identified supplier, thereby allowing other suppliers to signal their interest in bidding by submitting a statement of capabilities. If no other supplier submits a statement of capabilities that meets the requirements set out in the ACAN, on or before the closing date stated in the ACAN, the contracting officer may then proceed with the award of the contract.

An ACAN may be published only for requirements where Canada is able to accept a statement of capabilities from another supplier. Contracting officers must ensure that Canada is in a position to accept a statement of capabilities before publishing an ACAN. In circumstances where there is no possibility of another supplier submitting a statement of capabilities or where Canada cannot, for program or policy reasons, accept a statement of capabilities from another supplier, an ACAN is not to be published. ACANs are posted for a minimum of 15 calendar days on the Government Electronic Tendering Service (GETS).

Revisions to Current Policy

In accordance with the OPO recommendations, the ACAN policy has been revised to reinforce the need for due diligence in the documentation of all phases of the ACAN process. In addition, although the current minimum posting period is 15 days, the procurement community is being advised to determine individual posting periods based on the complexity of each requirement. Finally, while current practice does allow contracting officers to commence negotiations with the pre-identified supplier before the closing of the ACAN posting period, care should be exercised to ensure that any such negotiations would not put the pre-identified supplier at an advantage should a successful challenge take place before contract award. Due to this inherent risk, the pre-identified supplier must be cautioned not to commence any work or incur any costs before contract award.

The changes in this PN will be reflected in a future version of the Supply Manual. See Annex A for the detailed changes.

Contact Person

Please direct any inquiries to Larraine Gorman, P.Eng., Acquisition Policy and Process Directorate, by telephone at 819-956-1229 or by e-mail to: larraine.gorman@tpsgc-pwgsc.gc.ca.

Annex A - Changes to the Supply Manual

3.15.5 Advance Contract Award Notice
(2010-xx-xx)

1. An Advance Contract Award Notice (ACAN) is a public notice indicating to the supplier community that a department or agency intends to award a good, service or construction contract to a pre-identified supplier believed to be the only one capable of performing the work, thereby allowing other suppliers to signal their interest in bidding by submitting a statement of capabilities. If no other supplier submits a statement of capabilities that meets the requirements set out in the ACAN, the contracting officer may then proceed with awarding the contract to the pre-identified supplier. It is important to note that an ACAN is not a competitive process; however, competitive approval authorities may be used if there is no successful challenge.
2. ACANs may be published pursuant to article 10.7.13 of the Treasury Board (TB) Contracting Policy. When an ACAN is not published, Contract Award Notices will continue to provide transparency and it is therefore important that they be issued shortly after contract award.
3. In addition, contracting officers should review the TB Guide for Managers - Best Practices for Using Advance Contract Award Notices, Contracting Policy Notice 2000-4 and Contracting Policy Notice 2007-04 - Non-Competitive Contracting.
4. As stated in the TB Guide for Managers, the objectives of the ACAN process are to:
   
   1. provide a procurement process that is efficient and cost effective;
   2. provide potential suppliers with the opportunity to demonstrate, by way of a statement of capabilities, that they are capable of satisfying the requirements set out in the ACAN, and
   3. respect the principles of government contracting by enhancing access and transparency.
5. The ACAN notice must be published on the Government Electronic Tendering Service (GETS) currently provided through MERX.
6. An ACAN may be published only for requirements where Canada is able to accept a statement of capabilities from another supplier. Contracting officers must ensure that Canada is in a position to accept a statement of capabilities before publishing an ACAN. In circumstances where there is no possibility of another supplier submitting a statement of capabilities or where Canada cannot, for program or policy reasons, accept a statement of capabilities from another supplier, an ACAN must not be published. For more information on statements of capabilities, see 3.15.5.10.
7. Accordingly, the use of an ACAN for sole source contracts is not mandatory and there is no requirement to seek approval not to publish an ACAN for a requirement.
8. Where the ACAN process is not used, the non-competitive approval authorities apply to the procurement strategy.
9. ACANs are not to be used to circumvent electronic bidding or other bidding procedures when it is clear that more than one supplier exists that can perform the work.
10. ACANs are not to be structured in ways that discourage submissions of statements of capabilities. For example, the notice should not say: "This is not a competitive solicitation", "This is a sole source requirement", or other language that is not consistent with the spirit of the TB Contracting Policy on competitive contracting.
11. An ACAN process, even if conducted in accordance with the Policy, does not constitute a "competitive" process for the purposes of the trade agreements and any Canadian International Trade Tribunal (CITT) challenge. For the purposes of contract approval authorities, ACANs are classified under the “electronic bidding” category.

3.15.5.1 ACAN Time Limit
(2010-xx-xx)

1. Although ACANs are posted for a minimum of 15 calendar days on GETS, the contracting officer should determine the posting period based on the individual circumstances for each procurement, including the complexity associated with the procurement.
2. Furthermore, while for reasons of timeliness and efficiency, contracting of ficers may enter into negotiations with the pre-identified supplier before the closing of the ACAN posting period, care should be exercised to ensure that any such negotiations do not put the pre-identified supplier at an advantage should a successful challenge take place before contract award. Due to this inherent risk, the pre-identified supplier must be cautioned not to commence any work or incur any costs before contract award.

3.15.5.5 ACAN Content
(2010-xx-xx)

1. Contracting officers are responsible for preparing an ACAN for publication on GETS.
2. The text of the notice must clearly state that the proposed procurement meets one of the Government Contracts Regulations exceptions to soliciting bids (see 3.15(c)). The text must also reference the limited tendering reasons being invoked for all applicable trade agreements. Such exceptions must be fully and clearly justified in writing on the procurement file.
3. A sample of texts to be used in an ACAN notice can be found in Annex 3.3.
4. Further information on notice content and additional models can be found in TB Guide for Managers - Best Practices for Using Advance Contract Award Notices.
5. When additional information not specifically set out in the ACAN is provided on the requirements, it must be provided equally to all interested parties. If the information provided is considered a significant clarification to the information provided in the ACAN, an amended ACAN should be issued. Extending the closing date would be appropriate in such cases.

3.15.5.10 Statement of Capabilities (Challenge Process)
(2010-xx-xx)

1. The ACAN process provides suppliers with an opportunity to submit a statement of capabilities regarding work identified in an ACAN.
2. Statements of capabilities submitted by suppliers:
   
   1. should be provided in writing within the specified timeframe indicated on the ACAN; and
   2. must include documentation demonstrating that the supplier meets the requirements as set out in the ACAN.
3. Despite the timeframe indicated in the ACAN, there may be circumstances when a contracting officer could consider a statement of capabilities received after the specified date but before the award of the contract. Contracting officers should discuss this with their management and Legal Services.
4. Following receipt of a statement of capabilities, the process is as follows:
   
   1. All statements of capabilities received by the timeframe indicated in the ACAN are reviewed by the contracting officer.
   2. When a supplier’s statement of capabilities provides sufficient information to indicate that it meets the requirements set out in the ACAN, the supplier is notified of the decision to compete the requirement before proceeding to a full bidding process.
   3. If a statement of capabilities is rejected, a separate review of the rejection is conducted. This review would be made at one level higher than the original approval authority, but not lower than that of Manager and not higher than that of Assistant Deputy Minister.
   4. With respect to statements of capabilities that are rejected, suppliers should be advised in writing of the decision to reject a statement of capabilities before a contract is awarded.
   5. The reasons for the decision to reject a statement of capabilities are included in the file.
   6. Suppliers that have submitted a statement of capabilities are given the reasons why their statement of capabilities was rejected.
   7. The request from a supplier to withdraw/cancel its statement of capabilities is documented on file, and should be provided in writing by the supplier.
5. If the procurement is being set aside under the Procurement Strategy for Aboriginal Business, statements of capabilities must only be considered from Aboriginal suppliers.
6. If the requirement subject to an ACAN is cancelled, suppliers that submitted statements of capabilities should be notified in a timely manner.
7. Contracting officers may request additional information from suppliers or third parties, as appropriate, to ensure that the interested supplier has the capability to meet the requirements set out in the ACAN.

3.15.5.15 ACAN Exceptions
(2010-xx-xx)

1. ACANs must not be posted in situations where the competitive process using electronic or traditional bidding cannot be used. Examples of such situations include:
   
   1. when, for reasons of security or public interest, the information contained in an ACAN cannot be provided to the public;
   2. confirming orders;
   3. Corps of commissionaires, if right of first refusal applies;
   4. government direction, such as Munitions Supply Program;
   5. works of art;
   6. where, for reasons of extreme urgency brought about by events unforeseeable by the entity, the goods or services could not be obtained in time by means of open or selective tendering procedures;
   7. tobacco products purchased for inmates by Correctional Service Canada;
   8. regulatory body determined sole source service contracts (e.g. National Transportation Agency, Canadian Radio-Television and Telecommunications Commission);
   9. consolidated announcements that advertise a program consisting of several non-competitive standing offers/contracts (pharmaceutical and medical supplies are the only products currently eligible for this exclusion);
   10. when an entity needs to procure consulting services regarding matters of a confidential nature, the disclosure of which could reasonably be expected to compromise government confidences, cause economic disruption or similarly be contrary to the public interest.
2. ACANs must also not be posted in situations where a statement of capability cannot be accepted. For example, in circumstances where detailed market knowledge confirms that only one supplier can perform the work, then the contract should be awarded on a non-competitive basis with transparency achieved through a Contract Award Notice.
3. In such cases, the rationale underlying the decision not to publish an ACAN should be well documented on the procurement file.

3.15.5.20 Documenting the Procurement File
(2010-xx-xx)

Contracting officers are required to exercise due diligence in documenting on the procurement file the actions taken in each phase of the ACAN process. As a minimum, this involves documentation of the following justifications, reasons and associated steps:

1. justification for the sole source (see 3.15.1);
2. what actions, if appropriate, were taken to determine if other suppliers may have been capable of performing the work;
3. the requirement or rationale for issuing the ACAN (bearing in mind that Canada must be able to accept a statement of capabilities from another supplier if an ACAN is issued);
4. the process followed in either accepting or rejecting a statement of capabilities from another supplier, including the independent review, if required (see 3.15.5.10.(d));
5. details of any resulting competitive process, if conducted;
6. evidence that all suppliers that submitted a statement of capabilities were notified and were given the reasons why their statement of capabilities was rejected, if requested.