ARCHIVED Supplies - Cost Reimbursement

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Legal text for SACC item

Public Works and Government Services Canada

01     Interpretation
02     Powers of Minister
03     Assignment and Subletting
04     Discounts
05     Conduct of the Work
06     Specifications, Drawings, etc.
07     Inspection
08     Title and Acceptance
09     Warranty
10     Government Issue
11     Spoilage and Defective Work
12     Care of Crown Property
13     Time of Essence
14     Accounts
15     Security and Protection of the Work
16     Patent Claims and Royalties
17     Patent Licenses and Use of Technical Information
18     Use of Canadian Labour and Materials - CANCELLED
19     Conditions Precedent to Payment
20     Indemnity Against Claims
21     Title on Progress Payments
22     Further Assurances
23     Suspension of Work and Changes in Specifications
24     Default by Contractor
25     Termination
26     Notice
27     No Bribe, etc.
28     Labour and Health Conditions
29     Members of the House of Commons
30     Extras
31     Certification - Contingency Fees
32     Interest on Overdue Accounts
33     Conflict of Interest
34     Taxes
35     Invoice Submission
36     Shipment Documentation
37     Condition of Material
38     Transportation Costs
39     Shipment into Canada
40     International Sanctions
41     Standard Clauses and Conditions
42     Code of Conduct for Procurement
43     Payment Period
44     Right of set off
45     Entire Agreement
46     Transportation Carriers' Liability

1026B  01     (2007-05-25)  Interpretation

1.     In the Contract, unless the context otherwise requires,

       "Articles of Agreement" means the clauses and conditions set out in 
       full text or incorporated by reference from the Standard Acquisition 
       Clauses and Conditions Manual to form the body of the Contract but 
       does not include these general conditions, any supplemental general 
       conditions, annexes, the Contractor's bid or proposal or any other 
       document.

       "Canada", "Crown", "Her Majesty" or "the Government" means Her 
       Majesty the Queen in right of Canada;

       "Contract" means the Articles of Agreement, these general conditions, 
       any supplemental general conditions, annexes and any other documents 
       specified or referred to as forming part of the Contract, all as 
       amended by agreement of the Parties from time to time;
        
       "Contract Price" means the amount expressed in the Contract to be 
       payable to the Contract or for the work;

       "cost" means cost determined in accordance with Contract Cost 
       Principles 1031-2 (as revised to date of contract) and any 
       subsequent revisions thereof;

       "equipment" includes machinery, apparatus, jigs, tools, dies, gauges, 
       instruments and equipment of all kinds;

       "finished work" means the defence supplies or defence project or 
       other work completed in accordance with the provisions of the 
       Contract;

       "Government Issue" means all materials, parts, components, equipment, 
       specifications, articles and things which may be supplied to the 
       Contract or by or on behalf of Canada for the purposes of the work;

       "herein", "hereby", "hereof", "hereunder" and similar expressions, 
       when used in any section, shall be understood to relate to the 
       Contract as a whole and not merely to the section in which they 
       appear;

       "Inspector" means the person designated as such by the Contract and 
       any person acting on behalf of Canada or the Minister as the 
       Inspector under the Contract;

       "inventions" means any new and useful art, process, machine, 
       manufacture or composition of matter, or any new and useful 
       improvement in any art, process, machine, manufacture or composition 
       of matter;

       "Minister" means the Minister responsible for the Contract and 
       includes his Deputy Minister and any Acting, Associate or Assistant 
       Deputy Minister and any duly authorized officer or representative of 
       the Minister;

       "Party" means Canada or the Contractor or any other signatory to the 
       Contract and "Parties" means all of them;

       "supplemental general conditions" means any other general conditions 
       forming part of the Contract;

       "specifications" means the specifications, plans, drawings, designs 
       and models, if any, furnished to the Contract or by Canada or the 
       Minister for the carrying out of the Contract;

       "subcontractor" includes a person, firm or corporation having a 
       Contract with the Contractor for the execution of a part or parts of 
       the work and also a person, firm or corporation furnishing materials 
       to the Contractor in connection with the work;

       "Work" means the whole of the work, materials, matters and things 
       required to be done, furnished and performed in order to carry out 
       the Contract.

2.     The singular number includes the plural and vice versa.

3.     In the event of any inconsistencies, the provisions of the Agreement 
       and these general conditions shall prevail over the specifications 
       and the provisions of the Agreement and supplemental general 
       conditions shall prevail over these general conditions.

4.     The Contract is a defence contract within the meaning of the Defence 
       Production Act and shall be read accordingly. 

1026B  02     (1999-12-13)  Powers of Minister

The Minister is the agent of Canada for all purposes of the Contract.  
Nothing contained in or omitted from the Contract shall restrict any of the 
rights or powers of Canada or the Minister under the Defence Production Act, 
or otherwise.  Every right, remedy, power and discretion vested in the 
Minister under the Contract or otherwise shall be cumulative and 
non-exclusive.

1026B  03     (2000-12-01)  Assignment and Subletting
 
1.     The Contractor shall, before entering into any subcontracts or Work 
       or materials, notify the Minister in writing of such proposed 
       subcontracts and shall furnish such particulars thereof as the 
       Minister may require.  The Contract shall not be assigned nor any of 
       the Work sublet without the prior written consent of the Minister 
       and any assignment or subletting made without such consent shall be 
       of no effect provided that, unless the Contract or the Minister 
       directs otherwise, the Contractor may sublet such portions of the 
       Work as is customary in the carrying out of similar contracts.  No 
       assignment or subletting shall relieve the Contractor from any of 
       its obligations under the Contract or impose any liability upon 
       Canada or the Minister to an assignee or subcontractor, unless 
       otherwise agreed to by the Minister.

2.     Unless otherwise agreed to by the Minister in any assignment or 
       subletting, the Contractor agrees to bind each assignee or 
       subcontractor by the terms of the general conditions, the 
       supplemental general conditions, if any, the labour conditions and 
       the drawings and specifications as far as applicable to the Work.

3.     No act or omission of the Contractor, whether before or after the 
       entry into the Contract, shall have the effect of rendering any 
       monies payable by Canada under the Contract payable to any person, 
       firm or corporation other than the Contractor, unless Canada 
       consents thereto.

4.     The Minister may, on request, furnish to any subcontractor evidence 
       of the amounts submitted by the Contractor on the subcontractor's 
       account.

5.     Subject to the foregoing, the Contract shall inure to the benefit of 
       and shall be binding upon the successors and assigns of Canada and 
       of the Contractor, respectively. 

1026B  04     (1991-06-01)  Discounts

The Contractor shall, as far as practicable, take all trade discounts, 
rebates, refundable taxes and duties, credits, commissions and other 
allowances.  In determining the actual net cost of articles and materials 
of every kind required for the performance of this Contract, there shall be 
deducted from the gross cost thereof all trade discounts, rebates, 
refundable taxes and duties, credits, commissions and other allowances as 
aforesaid.  Such benefits lost through no fault or neglect on the part of 
the Contractor shall not be deducted from gross costs.

1026B  05     (1991-06-01)  Conduct of the Work

1.     The Contractor agrees to carry out the Work diligently and to 
       provide efficient supervision and inspection thereof and that the 
       Work will be of proper quality, material and workmanship and in full 
       conformity with the specifications, drawings, models or samples, if 
       any.

2.     No materials or parts shall be used or processed and no finished 
       work shall be submitted for acceptance or shall be delivered unless 
       or until approved by the Contractor's inspection staff and, wherever 
       practicable, marked with an approval stamp satisfactory to the 
       Inspector.  The Contractor shall keep proper and adequate inspection 
       records which shall at all times be open to examination by the 
       Inspector who may make copies thereof and take extracts therefrom.

3.     The Minister and the Inspector shall have access to the Work at all 
       times and to the plant and premises where any part of the work is 
       being carried on, and may make such inspections and tests of the 
       Work and of parts, materials and work in process as the Minister or 
       the Inspector may think fit.  he Contractor shall provide all 
       assistance and facilities, test pieces and samples which the 
       Minister or the Inspector may reasonably require for the carrying 
       out of any such inspections and any such tests as aforesaid and 
       shall forward such test pieces and samples to such person or 
       location as the Minister or the Inspector may direct.  The 
       Contractor shall provide the Minister and the Inspector with such 
       accommodation as they may require for the purpose of such 
       inspections and any such tests and for the exercise of any other 
       powers conferred upon them hereunder.

4.     The Contractor shall not stop or suspend Work pending the settlement 
       or determination of any differences arising under the Contract, 
       unless so instructed by the Minister. 

1026B  06     (1999-12-13)  Specifications, Drawings, etc.

All specifications, drawings, patterns, samples and other information 
furnished the Contractor in connection with the Contract shall be used by 
the Contractor solely for the purpose of carrying out the Work and for no 
other purpose except with the consent in writing of the Minister and shall 
remain the property of Canada and be returned to Canada or the Minister 
upon demand. 

1026B  07     (1991-06-01)  Inspection

All Work shall be subject to inspection by the Inspector prior to 
acceptance.  Should the Work be defective in materials or workmanship or 
otherwise not be in accordance with the requirements of the Contract, the 
Inspector shall have the right to reject the Work or to require its 
correction.  Inspection by the Inspector either at the plant of the 
Contractor or of any of its subcontractors shall not relieve the Contractor 
from responsibility for defects or other failure to meet the requirements 
of the Contract.  The Contractor agrees to accept and be bound by the 
Inspector's interpretation of the meaning of the specifications.

1026B  08     (2000-12-01)  Title and Acceptance

Except as otherwise provided in the Contract, title to the Work or any part 
thereof shall vest in Canada upon delivery to the consignee and acceptance 
thereof by the consignee.  Acceptance by the consignee of the Work or any 
part thereof shall be deemed to be acceptance thereof by Canada.

1026B  09     (2004-12-10)  Warranty

Notwithstanding prior acceptance of the finished work, and without 
restricting any other term of the Contract or any condition, warranty or 
provision implied or imposed by law, the Contractor, if requested by the 
Minister to do so at any time within twelve (12) months from the date of 
delivery, shall:

(a)    replace or make good at its own expense any finished work, excluding 
       Government Issue incorporated therein, which becomes defective or 
       which fails to conform to contract requirements as a result of 
       faulty or inefficient manufacture, material or workmanship

(b)    deliver such finished work free from all defects to the delivery 
       point specified in the Contract, unless otherwise agreed to by the 
       Minister;

provided that where, in the opinion of the Minister, it is not expedient to 
remove such defective finished work from its location, the Contractor shall 
replace or make good the defective finished work at such location, and 
shall be paid the actual cost incurred in so doing (including reasonable 
travelling and living expenses) with no allowance thereon by way of 
overhead or profit, less a sum equivalent to the cost of making good the 
defective finished work had it been made good at the Contractor's plant.

1026B  10     (1999-12-13)  Government Issue

1.     All items comprised in any Government Issue shall be used by the 
       Contractor solely for the purposes of the Contract and shall always 
       be and remain the property of Canada and wherever feasible the 
       Contractor shall maintain adequate accounting records of all 
       Government Issue and shall mark the same as being Canada's property.

2.     All Government Issue (except such as are installed or incorporated 
       in the Work) shall be returned to Canada upon demand, in the same 
       condition as when supplied to the Contractor provided that the 
       Contractor shall not be responsible for any loss or damage resulting 
       from ordinary wear and tear or causes beyond the Contractor's 
       control.

3.     All scrap and waste materials derived from any Government Issue or 
       from any other materials, articles or things which are the property 
       of Canada, shall, unless otherwise specifically provided herein, 
       remain the property of Canada and shall be disposed of only as 
       prescribed by the Minister.

1026B  11     (1991-06-01)  Spoilage and Defective Work

The Contractor shall carry out the Work as economically as possible and 
shall avoid waste and spoilage. If the character and value of any spoiled 
and wasted materials, or defective Work, in the opinion of the Minister 
constitutes mismanagement on the part of the Contractor, the cost of the 
spoiled and wasted materials and the cost of re-working the defective Work 
to the extent directed by the Minister shall not be considered as part of 
the cost of the Work and the Contractor shall not be reimbursed therefor.

1026B  12     (1999-12-13)  Care of Crown Property

Except as otherwise provided in the Contract, no insurance shall be carried 
by the Contractor on any property, title to which is vested in Canada, 
including any machinery, equipment and production tooling which is the 
property of Canada.  The Contractor shall take reasonable and proper care 
of all property, title to which is vested in Canada, while the same is in, 
on or about the plant and premises of the Contractor or otherwise in his 
possession or subject to his control and shall be responsible for any loss 
or damage resulting from his failure to do so other than loss or damage 
caused by ordinary wear and tear.

1026B  13     (1991-06-01)  Time of Essence

Time shall be deemed to be of the essence of the Contract provided that the 
time for completing any of the Work which has been or is likely to be 
delayed by reason of force majeure or other cause beyond the reasonable 
control of the Contractor shall be extended by a period equal to the length 
of the delay so caused, provided that prompt notice in writing of the 
occurrence causing or likely to cause such delay is given to the Minister.

1026B  14     (1991-06-01)  Accounts

The Contractor shall keep proper accounts and records of the cost to the 
Contractor of the Work and of all expenditures or commitments made by the 
Contractor in connection therewith and such accounts and records together 
with the related invoices, receipts and vouchers shall be open to audit and 
inspection by the authorized representatives of the Minister (who may make 
copies thereof and take extracts therefrom) at any time until the 
expiration of six (6) years from the end of the calendar year in which the 
Contract is terminated or completed and the Contractor shall afford all 
facilities for such audits and inspections and shall furnish the Minister 
and his authorized representatives with all such information as he or they 
may from time to time require with reference to such accounts, records, 
invoices, receipts and vouchers.  The Contractor shall not, without the 
consent of the Minister, dispose of any such accounts, records, invoices, 
receipts and vouchers until the expiration of six (6) years from the end of 
the calendar year in which the Contract is terminated or completed, but 
shall preserve and keep the same available for audit and inspection at any 
time during such retention period. 

1026B  15     (2000-12-01)  Security and Protection of Work

1.     The Contractor shall keep confidential all information provided to 
       the Contractor by or on behalf of Canada in connection with the Work, 
       and all information developed by the Contractor as part of the Work, 
       and shall not disclose any such information to any person without 
       the written permission of the Minister, except that the Contractor 
       may disclose to a subcontractor, authorized in accordance with this 
       Contract, information necessary to the performance of the 
       subcontract. This section does not apply to any information that:

       (a)    is publicly available from a source other than the Contractor; 
              or

       (b)    is or becomes known to the Contractor from a source other 
              than Canada, except any source that is known to the 
              Contractor to be under an obligation to Canada not to 
              disclose the information.

2.     When the Contract, the Work, or any information referred to in 
       subsection 1 is identified as TOP SECRET, SECRET, CONFIDENTIAL or 
       PROTECTED by Canada, the Contractor shall, at all times, take all 
       measures reasonably necessary for the safeguarding of the material 
       so identified, including those set out in the Department of Public 
       Works and Government Services Industrial Security Manual and its 
       supplements and any other instructions issued by the Minister.

3.     Without limiting the generality of subsections 1 and 2, when the 
       Contract, the Work, or any information referred to in subsection 1 
       is identified as TOP SECRET, SECRET, CONFIDENTIAL or PROTECTED by 
       Canada, the Minister shall be entitled to inspect the Contractor's 
       premises and the premises of a subcontractor at any tier for 
       security purposes at any time during the term of the Contract, and 
       the Contractor shall comply with, and ensure that any such 
       subcontractor complies with, all written instructions issued by the 
       Minister dealing with the material so identified, including any 
       requirement that employees of the Contractor or of any such 
       subcontractor execute and deliver declarations relating to 
       reliability screenings, security clearances and other procedures.

1026B  16     (2000-12-01)  Patent Claims and Royalties

1.     In this section, "royalties" includes license fees and all other 
       payments analogous to royalties for, and also claims for damages 
       based upon, the use or infringement of any patent, registered 
       industrial design, or copyright by the Contractor in, or the 
       furnishing of any engineering or technical assistance or services to 
       the Contractor for the performance of the Contract or any part 
       thereof.

2.     Canada shall indemnify the Contractor against claims, actions or 
       proceedings for the payment of royalties in respect of anything, the 
       model, plan, design or specification of which shall have been 
       supplied by or on behalf of Canada to the Contractor, but this 
       indemnity shall apply only to the Contract.

3.     Except as provided in subsection 2 of this section, and subject as 
       hereinafter provided, the Contractor shall indemnify Canada against 
       claims, actions, or proceedings for the payment of royalties in 
       respect of the carrying out of the Contract, or in respect of the 
       use of or disposal by or for Canada of articles and supplies 
       furnished hereunder.

4.     The Contractor shall forthwith notify the Minister of all royalties 
       which the Contractor or any of its subcontractors will or may be 
       obligated to pay or proposes to pay for or in respect of the 
       carrying out of the Contract, and the basis thereof, and the parties 
       to whom the same are payable, and shall from time to time promptly 
       advise the Minister of any and all claims or arrangements made or 
       proposed which would or might result in further or different 
       payments by way of royalties being made by the Contractor or any of 
       its subcontractors.

5.     If and to the extent that the Minister so directs, the Contractor 
       shall not pay, and shall direct its subcontractors not to pay any 
       royalties in respect of the carrying out of the Contract except with 
       the consent in writing of the Minister and subject to such 
       conditions as the Minister may impose.

6.     From and after the giving of any such direction, and subject to 
       compliance by the Contractor with the foregoing provisions, Canada 
       shall relieve and indemnify the Contractor from and against all 
       claims, actions or proceedings for payment of such royalties as are 
       covered by such direction. 

1026B  17     (2000-12-01)  Patent Licenses and Use of Technical 
Information

1.     The Contractor shall promptly report and fully disclose to the 
       Minister any and all inventions, methods or processes, whether 
       patented or unpatented, conceived or made in the course of carrying 
       out the Work and the Contractor agrees to and does hereby grant unto 
       Canada a non-exclusive, irrevocable, royalty-free license to make, 
       have made and use for military purposes throughout the world and to 
       sell or otherwise dispose of any article or thing embodying or using 
       any and all such inventions, methods or processes, and a similar 
       license to practice or cause to be practiced any such methods or 
       processes.

2.     Canada may duplicate, use, and disclose in any manner for Government 
       purposes, including delivery to other governments for the 
       furtherance of mutual defense of Canadian and such other governments, 
       all or any part of the technical information including reports, 
       drawings, blueprints, and other data specified to be delivered by 
       the Contractor under this Contract. 

1026B  18     (1992-04-01)  Use of Canadian Labour and Materials

CANCELLED.

1026B  19     (2004-12-10)  Conditions Precedent to Payment

No payment shall be made to the Contractor unless or until:

(a)    invoices, inspection notes and all other documents prescribed from 
       time to time by the Minister or Inspector are submitted in 
       accordance with the terms of the Contract or instructions of the 
       Minister, and

(b)    the Contractor, if required to do so, establishes to the 
       satisfaction of the Minister that all materials, parts, work in 
       process or finished work in respect of which payment is being made 
       are free from all claims, liens, attachments, charges or 
       encumbrances.

1026B  20     (2004-12-10)  Indemnity Against Claims

Except as otherwise provided in the Contract, the Contractor shall 
indemnify and save harmless Canada and the Minister from and against any 
and all claims, damages, loss, costs and expenses which they or either of 
them may at any time incur or suffer as a result of or arising out of:

(a)    any injury to persons (including injuries resulting in death) or 
       loss of or damage to property of others which may be or be alleged 
       to be caused by or suffered as a result of the carrying out of the 
       Work or any part thereof, and

(b)    any liens, attachments, charges or other encumbrances or claims upon 
       or in respect of any materials, parts, work in process or finished 
       work delivered to or in respect of which any payment has been made 
       by Canada.

1026B  21     (2000-12-01)  Title on Progress Payments

Upon any payment being made to the Contractor for or on account of 
materials, parts, work in process, or finished work, either by way of 
progress payments or accountable advances or otherwise, title in and to all 
materials, parts, work in process and finished work so paid for by such 
progress payments or accountable advances or otherwise shall vest and 
remain in Canada, unless already so vested under any provision of the 
Contract, and the Contractor shall be responsible therefor in accordance 
with the provisions of section 12 hereof, it being understood and agreed 
that such vesting of title in Canada shall not constitute acceptance by 
Canada of such materials, parts, work in process and finished work and 
shall not relieve the Contractor of its obligations to perform the Work in 
conformity with the requirements of the Contract.

1026B  22     (1999-12-13)  Further Assurances

Wherever it is herein provided that title to any parts, materials, work in 
process or finished work becomes vested in Canada, the Contractor shall 
execute such conveyances thereof and other instruments as the Minister may 
request.

1026B  23     (1991-06-01)  Suspension of Work and Changes in 
Specifications

The Minister may at any time and from time to time order a suspension of 
the Work, in whole or in part, and make modifications of, changes in or 
additions to the specifications, changes in methods of shipment or packing 
and in the place or time of delivery.  All directions given by the Minister 
with respect to the foregoing shall be complied with by the Contractor.  
Should any such suspension, modification, change or addition result in a 
material increase or decrease in the scope of the Work, the Minister may 
make an adjustment in the Contractor's fee and the Minister's decision on 
the adjustment to be made shall be final.

1026B  24     (2000-12-01)  Default by Contractor

1.     If the Contractor is in default in carrying out any of the terms, 
       conditions, covenants or obligations of the Contract, or if the 
       Contractor becomes bankrupt or insolvent, or has a receiving order 
       made against it, or makes an assignment for the benefit of creditors, 
       or if an order is made or resolution passed for the winding up of 
       the Contractor, or if the Contractor takes the benefit of any 
       statute for the time being in force relating to bankrupt or 
       insolvent debtors, the Minister may, by giving notice in writing to 
       the Contractor, terminate the whole or any part of the Contract.  In 
       such event, the Contractor shall not be entitled to the payment of 
       any fee or any portion thereof with respect to any of the Work not 
       completed by the Contractor in accordance with the terms of the 
       Contract at the time of the said notice in writing to the Contractor.

2.     If after notice of termination of the Contract under the provisions 
       of subsection 1 of this section, it is determined by the Minister 
       that the default of the Contractor is due to causes beyond the 
       control of the Contractor, such notice of termination shall be 
       deemed to have been issued pursuant to section 25 of these general 
       conditions, and the rights and obligations of the parties hereto 
       shall be governed by that section.

3.     Upon termination of the Contract under this section, the Minister 
       may require the Contractor to deliver to Canada, in the manner and 
       to the extent directed by the Minister, any finished work which has 
       not been delivered and accepted prior to such termination and any 
       materials, parts, work in process or tools which the Contractor has 
       specifically acquired or produced for the fulfilment of the Contract. 
       Canada shall pay the Contractor for all such finished work delivered 
       pursuant to such direction and accepted by Canada, the cost to the 
       Contractor of such finished work plus the proportionate part of any 
       fee fixed by the said Contract and shall pay or reimburse the 
       Contractor the reasonable and proper cost to the Contractor of all 
       materials, parts or work in process delivered to Canada pursuant to 
       such direction.

1026B  25     (2004-12-10)  Termination

1.     Notwithstanding anything in the Contract contained, the Minister may, 
       by giving notice to the Contractor, terminate the Contract as 
       regards all or any part or parts of the Work not theretofore 
       completed.  Upon such notice being given, the Contractor shall cease 
       Work (including the manufacturing and procuring of materials for the 
       fulfilment of the Contract) in accordance with and to the extent 
       specified in such notice but shall proceed with all reasonable speed 
       to complete such part or parts (if any) of the Work as are by the 
       terms of such notice to be completed and shall also proceed with all 
       reasonable speed to complete up to such time or stage as may be 
       specified in the notice any part or parts of the Work as required by 
       such notice.  Furthermore, the Minister may, at any time or from 
       time to time, give one or more additional notices with respect to 
       any or all parts of the Work which remain to be completed after the 
       giving of any previous notice or notices.

2.     In the event of any notice given under the provisions of this 
       section, and subject as hereinafter provided:

       (a)    All Work completed by the Contractor hereunder before the 
              giving of such notice, and all Work completed thereafter 
              pursuant to such notice, shall be paid for (subject to 
              inspection and acceptance by Canada) in accordance with the 
              terms hereof;

       (b)    In respect of Work not completed hereunder before the giving 
              of such notice, and not completed thereafter pursuant to such 
              notice, Canada shall pay the Contractor's cost thereof as 
              determined under the provision hereof, and in addition an 
              amount representing a fair and reasonable profit in respect 
              of Work done thereon;

       (c)    Subject as provided in paragraph (d) of this subsection 2, if 
              the Contract shall have specifically authorized or if the 
              Minister shall have specifically approved the making of 
              capital expenditures by the Contractor to enable it to carry 
              out the Contract, the Contractor shall be entitled to be 
              reimbursed the amount of such capital expenditures so 
              authorized or approved (and actually made or incurred) to the 
              extent that the same (less any depreciation in respect 
              thereof already taken into account in determining cost in 
              accordance with the provisions of the Contract) were 
              reasonably and properly incurred by the Contractor in respect 
              of and are properly apportionable to the performance of the 
              Contract;

       (d)    If the Contract is exclusively a Contract for the making of 
              capital expenditures in respect of additional equipment or 
              plant additions, the foregoing paragraphs (a) to (c) 
              inclusive of this subsection 2 shall not apply, but Canada 
              shall pay or reimburse the Contractor for the reasonable and 
              proper cost to the Contractor (not previously paid by Canada) 
              of:

              (i)    all additional equipment which, prior to the giving of 
                     the termination notice, shall have been purchased, 
                     acquired or manufactured by the Contractor, or 
                     contracted for and for which the Contractor is 
                     obligated to make payments, and

              (ii)   all additional equipment in process of manufacture by 
                     the Contractor as at the date of the giving of such 
                     notice and all Work in connection with the 
                     construction of the plant addition up to the said date, 
                     including the cost of materials and parts contracted 
                     for by the Contractor for the purpose of such 
                     manufacture of construction and for which the 
                     Contractor is obligated to make payment.

3.     Notwithstanding the provisions of subsections 1 and 2, the amounts 
       which the Contractor shall be entitled to be reimbursed in the event 
       of the giving of a termination notice under this section 25 shall 
       include, subject as hereinafter provided, the costs of the 
       Contractor of and incidental to the cancellation of obligations 
       incurred by the Contractor pursuant to the termination notice, the 
       cost of preparing the necessary accounts and statements with respect 
       to the Work performed to the effective date of such termination and 
       commitments made by the Contractor with respect to the terminated 
       portions of the Work, wages which the Contractor is obligated under 
       any laws or regulations for the time being in force, to pay to 
       employees whose services are no longer required by reason of such 
       termination, the costs of and incidental to the taking of an 
       inventory of materials, components, work in process and finished 
       work on hand at the effective date of the termination and other 
       costs and expenses of and incidental to the termination in whole or 
       in part, of operations under the Contract provided always that 
       payment and reimbursement under the provisions of this subsection 
       shall be made only to the extent that is established to the 
       satisfaction of the Minister that the costs and expenses aforesaid 
       were actually incurred by the Contractor and that the same are 
       reasonable and are properly attributable to the termination of the 
       Work or the part thereof so terminated.

4.     In the procuring of materials and parts required for the performance 
       of the Contract and in subletting of any Work hereunder, the 
       Contractor, unless otherwise authorized by the Minister, shall 
       procure or sublet on terms that will enable the Contractor to 
       terminate any contracts entered into by the Contractor upon the same 
       conditions and terms as those provided for in this section in 
       respect of the termination of the Contract by the Minister and the 
       giving of a notice or notices as aforesaid and upon the same 
       conditions and terms in respect of reimbursement and profit as those 
       contained in this section and in the event of the termination of the 
       Contract as herein provided as regards all or any part of the Work, 
       the Contractor shall co-operate with Canada and the Minister and do 
       everything reasonably within its power at all times to minimize and 
       reduce the amount of Canada's obligations under the provisions of 
       this section.

5.     In case of disagreement as to the amount which the Contractor is 
       entitled to be reimbursed, the matter shall be referred to the 
       Federal Court.

6.     Upon reimbursement being made the Contractor as herein provided, 
       title to the materials, parts, plant, equipment and work in process 
       in respect of which such reimbursement is made shall pass to and 
       vest in Canada (the Contractor hereby agreeing to execute and 
       deliver all requisite instruments by way of further assurance) and 
       such materials, parts, plant, equipment and work in process shall be 
       delivered to the order of the Minister, but the materials thus taken 
       over will in no case be in excess of what would have been required 
       for performing the Contract in full if no notice has been given 
       under the provisions hereof.

7.     If it is established to the satisfaction of the Minister by the 
       Contractor that by reason of any action taken by the Minister under 
       the provisions of this section exceptional hardship has resulted to 
       the Contractor, then the Minister may, notwithstanding any other 
       provisions of this section, in his absolute discretion grant such 
       allowance (not to include in any case, however, any allowance or 
       compensation for loss of profit) to the Contractor as, in the 
       opinion of the Minister, is warranted by the circumstances.

8.     The Contractor shall have no claim for damages, compensation, loss 
       of profit, allowance or otherwise by reason of or directly or 
       indirectly arising out of any action taken or notice given by the 
       Minister under or pursuant to the provisions of this section except 
       as and to the extent in this section expressly provided.

9.     The right of termination and of giving notice herein before provided 
       for shall be in addition to and not in substitution for any other 
       right possessed by Canada and the Minister. 

1026B  26     (1991-06-01)  Notice

Any notice to the Contractor hereunder shall be effectively given if sent 
by letter or by telegram, postage prepaid or with charges prepaid as the 
case may be, addressed to the Contractor at its address as given in the 
Contract or, if no address is given, at its address as shown by the records 
of the Minister. Any notice so given shall be deemed to have been received 
by the Contractor at the time when in the ordinary course such letter or 
telegram should have reached its destination.

1026B  27     (1999-12-13)  No Bribe, etc.

The Contractor warrants that no bribe, gift, or other inducement has been 
paid, given, promised or offered to any official or employee of Canada for, 
or with a view to, the obtaining of the Contract by the Contractor. 
1026B  28     (1991-06-01)  Labour and Health Conditions

The Contractor shall comply with all labour conditions, and with all health 
conditions and requirements, from time to time applicable to the Work. 

1026B  29     (1991-06-01)  Members of the House of Commons

No member of the House of Commons shall be admitted to any share or part of 
the Contract or to any benefit to arise therefrom.

1026B  30     (1991-06-01)  Extras

Except as otherwise provided in the Contract, no payment for extras shall 
be made unless such extras and the price thereof have been authorized in 
writing by the Minister.

1026B  31     (1994-06-06)  Certification - Contingency Fees

1.     The Contractor certifies that it has not directly or indirectly paid 
       or agreed to pay and covenants that it will not directly or 
       indirectly pay a contingency fee for the solicitation, negotiation 
       or obtaining of this Contract to any person other than an employee 
       acting in the normal course of the employee's duties.

2.     All accounts and records pertaining to payments of fees or other 
       compensation for the solicitation, obtaining or negotiation of the 
       Contract shall be subject to the Accounts and Audit provisions of 
       the Contract.

3.     If the Contractor certifies falsely under this section or is in 
       default of the obligations contained therein, the Minister may 
       either terminate this Contract for default in accordance with the 
       termination for default provisions of the Contract or recover from 
       the Contractor by way of reduction to the Contract Price or 
       otherwise the full amount of the contingency fee.

4.     In this section:

       "contingency fee" means any payment or other compensation that is 
       contingent upon or is calculated upon the basis of a degree of 
       success in soliciting or obtaining a government contract or 
       negotiating the whole or any part of its terms;

       "employee" means a person with whom the Contractor has an employer/
       employee relationship;

       "person" includes an individual or group of individuals, a 
       corporation, a partnership, an organization and an association and, 
       without restricting the generality of the foregoing, includes any 
       individual who is required to file a return with the registrar 
       pursuant to section 5 of the Lobbyist Registration Act, R.S. 1985 c.44 
       (4th Supplement) as the same may be amended from time to time.

1026B  32     (2000-12-01)  Interest on Overdue Accounts

1.     For the purposes of this section:

       "Average Rate" means the simple arithmetic mean of the Bank Rates in 
       effect at 4:00 p.m. Eastern Standard Time each day during the 
       calendar month which immediately precedes the calendar month in 
       which payment is made, where the "Bank Rate" means the rate of 
       interest established from time to time by the Bank of Canada as the 
       minimum rate at which the Bank of Canada makes short term advances 
       to members of the Canadian Payments Association.

       "date of payment" means the date of the negotiable instrument drawn 
       by the Receiver General for Canada and given for payment of an 
       amount due and payable;

       an amount is "due and payable" when it is due and payable by Canada 
       to the Contractor in accordance with the conditions of the Contract; 
       and

       an amount becomes "overdue" when it is unpaid on the first day 
       following the day upon which it is due and payable.

2.     Subject to the Contract, Canada shall be liable to pay to the 
       Contractor simple interest at the Average Rate plus 3 percent per 
       annum on any amount that is overdue, from the date such amount 
       becomes overdue until the day prior to the date of payment, 
       inclusive.  Interest shall be paid without notice from the 
       Contractor.

3.     Canada shall not be liable to pay interest in accordance with this 
       section if Canada is not responsible for the delay in paying the 
       Contractor.

4.     Canada shall not be liable to pay interest on overdue advance 
payments.

1026B  33     (2005-12-16)  Conflict of Interest

The Contractor agrees that it is a term of the Contract that no person who 
is not in compliance with the provisions of the Conflict of Interest and 
Post-Employment Code for Public Office Holders, the Values and Ethics Code 
for the Public Service, or the Defence Administrative Orders and Directives 
governing Conflict of Interest and Post-Employment, shall derive any direct 
benefit from this Contract.

1026B  34     (2007-05-25)  Taxes

1.     Municipal Taxes 
       Municipal Taxes are not applicable.

2.     Provincial Taxes 

       (a)    Excluding legislated exceptions, federal government 
              departments and agencies are not required to pay any ad 
              valorem sales tax levied by the province in which the taxable 
              goods or services are delivered.  This exemption has been 
              provided to federal government departments and agencies under 
              the authority of one of the following:

              (i)    Provincial Sales Tax (PST) exemption license numbers 
                     for the provinces of:

                     Prince Edward Island OP-10000-250
                     Ontario                     11708174G
                     Manitoba             390-516-0
                     British Columbia     R005521

              (ii)   For Quebec, Saskatchewan, the Yukon Territory, the 
                     Northwest Territories and Nunavut, an exemption 
                     certificate, which certifies that the goods or 
                     services purchased are not subject to the provincial/
                     territorial sales and consumption taxes because they 
                     are being purchased by the federal government with 
                     Canada funds for the use of the federal government. 

       (b)    Currently, in Alberta, the Yukon Territory, the Northwest 
              Territories and Nunavut, there is no general PST.  However, 
              should a PST be introduced in the Northwest Territories, 
              Nunavut, or Yukon Territory, the sales tax exemption 
              certificate would be required on the purchasing document.

       (c)    Federal departments are required to pay the HST in the 
              participating provinces of Newfoundland and Labrador, Nova 
              Scotia and New Brunswick.

       (d)    The Contractor is not exempt from paying PST under the above 
              exemption license numbers or exemption certificate.  The 
              Contractor is required to pay the PST on taxable goods or 
              services used or consumed in the performance of the Contract 
              (as per appropriate provincial legislation), including 
              material incorporated into real property.

3.     Changes to Taxes and Duties

In the event of any change in any tax imposed under the Excise Act, R.S.C 
1985, c. E-14, and Excise Tax Act, R.S.C. 1985, c. E-15, or any duties 
imposed under the Customs Tariff or any other federal or provincial sales, 
excise or other like duties, taxes, charges or impositions after the bid 
submission date and which affects the costs of the Work to the Contractor, 
the Contract price will be adjusted to reflect the increase or decrease in 
the cost to the Contractor.

4.     Goods and Services Tax/Harmonized Sales Tax

The estimated Goods and Services Tax (GST) or Harmonized Sales Tax (HST), 
if applicable, is included in the total estimated cost on page 1 of the 
Contract.  The GST or HST is not included in the Contract price but will be 
paid by Canada as provided in the Invoice Submission clause below.  The 
Contractor agrees to remit to Canada Revenue Agency any amounts of GST and 
HST paid or due.

1026B  35     (2007-05-25)  Invoice Submission

Invoices must be submitted in the name of the Contractor.  They must show 
the name and address of the client department, item/reference number, 
deliverable and/or description of Work, contract serial number, Client 
Reference Number (CRN), Procurement Business Number (PBN) and financial 
code(s).  If applicable, the method of shipment together with date, case 
numbers and part or reference numbers, item, quantity, unit of issue, unit 
price, and additional charges will be shown on the invoice.  If applicable, 
fixed-time labour rates and level of effort and, the amount invoiced 
(exclusive of the GST or HST as appropriate), will be shown separately.

GST or HST, if applicable, will be incorporated into all invoices and shown 
as a separate item on invoices.  All items that are zero-rated, exempt or 
to which the GST or HST does not apply, are to be identified as such on all 
invoices.  Invoices must be submitted for each delivery/shipment and must 
apply to one contract only.  Each invoice must indicate whether it covers 
partial or final delivery.

1026B  36     (2007-05-25)  Shipment Documentation

For the shipment of goods, the transportation bill of lading must accompany 
the original invoice, except for "collect" shipments (if and when 
stipulated), in which event it must accompany the shipment.  In addition, a 
packing slip must accompany each shipment, showing item, quantity, part or 
reference numbers, description of suppliers and contract reference numbers, 
including the CRN and PBN.  If the goods have been inspected at the 
Contractor's plant, the signed inspection voucher must be attached to the 
packing slip normally enclosed in the packing note envelope.

1026B  37     (2007-11-30)  Condition of Material

Unless specified otherwise in the Contract, material supplied must be new 
and conform to the latest issue of the applicable drawing, specification 
and/or part number that is in effect on the solicitation closing date.

1026B  38     (2010-01-11)  Transportation Costs

If transportation costs are payable by Canada under the Contract and the 
Contractor makes the transportation arrangements, shipments must be made by 
the most direct and economical means consistent with normal shipping 
practice.  The costs must be shown as a separate item on the invoice.

1026B  39     (2007-05-25)  Shipment into Canada

Goods shipped into Canada from another country are to be consigned to 
destination, in bond, unless otherwise directed.

1026B  40     (2010-01-11)  International Sanctions

1.     Persons in Canada, and Canadians outside of Canada, are bound by 
       economic sanctions imposed by Canada.  As a result, the Government 
       of Canada cannot accept delivery of goods or services that originate, 
       either directly or indirectly, from the countries or persons subject 
       to economic sanctions.

2.     The Contractor must not supply to the Government of Canada any goods 
       or services which are subject to economic sanctions.

3.     The Contractor must comply with changes to the regulations imposed 
       during the period of the Contract. The Contractor must immediately 
       advise Canada if it is unable to perform the Work as a result of the 
       imposition of economic sanctions against a country or person or the 
       addition of a good or service to the list of sanctioned goods or 
       services. If the Parties cannot agree on a work around plan, the 
       Contract will be terminated in accordance with section 25.

1026B  41     (2007-05-25)  Standard Clauses and Conditions

Pursuant to the Department of Public Works and Government Services Act, S.C. 
1996, c. 16, the clauses and conditions identified in the Contract by 
number, date and title are incorporated by reference into and form part of 
the Contract as though expressly set out in the Contract.

1026B  42     (2008-05-12)  Code of Conduct for Procurement

The Contractor confirms that it has read the Code of Conduct for 
Procurement and agrees to be bound by its terms.

1026B  43     (2008-05-12)  Payment Period

1.     Canada's standard payment period is thirty (30) days. The payment 
       period is measured from the date an invoice in acceptable form and 
       content is received in accordance with the Contract or the date the 
       Work is delivered in acceptable condition as required in the 
       Contract, whichever is later. A payment is considered overdue on the 
       31st day following that date and interest will be paid automatically 
       in accordance with the section 32 entitled Interest on Overdue 
       Accounts.

2.     If the content of the invoice and its substantiating documentation 
       are not in accordance with the Contract or the Work is not in 
       acceptable condition, Canada will notify the Contractor within 
       fifteen (15) days of receipt. The 30-day payment period begins upon 
       receipt of the revised invoice or the replacement or corrected Work. 
       Failure by Canada to notify the Contractor within fifteen (15) days 
       will only result in the date specified in subsection 1 of the clause 
       to apply for the sole purpose of calculating interest on overdue 
       accounts.

1026B  44     (2008-05-12)   Right of set off

Without restricting any right of set-off given by law, Canada may set-off 
against any amount payable to the Contractor under the Contract, any amount 
payable to Canada by the Contractor under the Contract or under any other 
current contract. Canada may, when making a payment pursuant to the 
Contract, deduct from the amount payable to the Contractor any such amount 
payable to Canada by the Contractor which, by virtue of the right of 
set-off, may be retained by Canada.

1026B  45     (2008-05-12)  Entire Agreement

The Contract constitutes the entire and only agreement between the Parties 
and supersedes all previous negotiations, communications and other 
agreements, whether written or oral, unless they are incorporated by 
reference in the Contract. There are no terms, covenants, representations, 
statements or conditions binding on the Parties other than those contained 
in the Contract.

1026B  46     (2010-01-11)  Transportation Carriers' Liability

The federal government's policy of underwriting its own risks precludes 
payment of insurance or valuation charges for transportation beyond the 
point at which ownership of goods passes to the federal government 
(determined by the FOB point or Incoterms).  Where increased carrier 
liability is available without charge, the Contractor must obtain the 
increased liability for shipment.