ARCHIVED Rental and Maintenance of ADP Systems

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Legal text for SACC item

1278   01     (06/91)       Interpretation

(1) Unless the context otherwise requires,  

       (a) "agreement"  means the particular contract for a data processing 
       system of which these general conditions are a part, and of which 
       supplemental general conditions, specifications, labour conditions, 
       schedules and any other document may form a part;   
       (b) "data processing system" is the total complement of individual 
       machines operating as an integrated group;   
       (c) "equipment" is an all-inclusive term which refers either to 
       individual machines or to a complete data processing system;   
       (d) "finished work" means the supplies or projects or other work 
       completed in accordance with the provisions of the contract;   
       (e) "machine" means an individual component of an overall data 
       processing system such as a tape unit, card reader or a central 
       processing unit;   
       (f) "preventive maintenance" means that performed by the Contractor 
       to keep the equipment in proper operating condition and is 
       accomplished on a scheduled basis;   
       (g) "principal period of maintenance" is an uninterrupted time 
       period Mondays through Fridays, excluding holidays;   
       (h) "remedial maintenance" means that performed by the Contractor to 
       correct an equipment failure and is accomplished on an unscheduled 
       (i) "specifications" means the plans, drawings, designs, and models;   
       (j) "systems performance" is a measure of the performance of a 
       system and is expressed as a percentage;   
       (k) "work" means all of the requirements or services furnished and 
       performed in order to carry out the contract;   
       (l) "Government-supplied Material" means all goods, parts, 
       components, equipment, specifications, articles and things supplied 
       to the Contractor by or on behalf of the Minister for the purposes 
       of the work;   
       (m) "contract price" means the amount or amounts expressed in the 
       contract to be payable to the Contractor for the finished work;   
       (n) "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. 
       The Minister is the agent of the Government for all purposes of the 

1278   02     (06/91)       Assignment and Subletting

The Contractor shall not assign the contract or sublet any portion of the 
work without the prior written consent of the Minister and any assignment 
or subletting without such consent shall be of no effect.   

1278   03     (06/91)       Conduct of 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, if any, and all other requirements of the 

(2) 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.  

1278   04     (06/91)       Warranty and Maintenance

(1) The Contractor warrants that any equipment supplied under a rental 
contract, when installed, is in good working order and the Contractor shall 
make any adjustment, repair or replacement to maintain the equipment in 
good repair. Except as otherwise provided, there shall be no additional 
charges for:  

       (a) preventive maintenance, regardless of when performed;

       (b) replacement parts, unless such parts are required due to the 
       fault or negligence of the Government;  

       (c) remedial maintenance which was commenced during the Principal 
       Period of Maintenance, unless the maintenance was required due to 
       the fault or negligence of the Government;

       (d) remedial maintenance required when scheduled Preventive 
       Maintenance preceding the malfunction had not been performed, unless 
       the maintenance was required due to the fault or negligence of the 

1278   05     (06/91)       Installation

Equipment rented under this agreement shall be installed ready for use on 
the installation or delivery date specified in the contract. Any penalty 
for late delivery shall be specified in the individual rental contract. Any 
responsibility on the part of the Minister for preparation of the site in 
accordance with written Contractor's specifications is to be shown as part 
of the rental contract.  
1278   06     (06/91)       Programming Aids (Software)

(1) Upon request, standard programming aids, including programs, 
sub-routines, assemblers, translation compilers and related items which 
have been announced as available at no additional charge shall be provided 
to the Minister.  

(2) Special programming aids required to satisfy a specific Government 
application shall be detailed in the contract.  

1278   07     (06/91)       Period of Contract

Except as otherwise provided, the rental contract shall be for a period of 
one (1) year and may be terminated at any time thereafter without 
compensation, by either party upon written notice issued to the other party,  

       (a) ninety (90) days before termination of a system;   
       (b) thirty (30) days before termination of a machine; or

       (c) at any time when agreed to by the other party.  

1278   08     (06/91)       Termination

Notwithstanding any other condition of the contract, the Minister may, by 
giving notice to the Contractor, terminate the contract. In the event of 
such termination, the Contractor shall be entitled to compensation in such 
amount as may be agreed upon, but in no event shall the compensation exceed 
the balance that would have been due had the contract not been terminated.   

1278   09     (06/91)       Shipment

All initial and return transportation, rigging and drayage charges upon 
equipment are to be arranged for and prepaid by the Contractor who will 
invoice such costs to the Minister as a separate contract charge. 
Transportation charges associated with the replacement of malfunctioning 
equipment shall be borne by the Contractor, unless the replacement was due 
to the negligence of the Minister.   

1278   10     (06/91)       Title

Title to the equipment covered by a rental contract will, at all times, 
remain with the Contractor who will remove the said equipment within a 
reasonable period after expiration of the contract or upon due notice of 
1278   11     (06/91)       Insurance

The Minister is relieved from all risks of loss or damage to the equipment 
during periods of transportation, installation and during the entire time 
the equipment is in the possession of the Government except when loss or 
damage is due to the fault or negligence of the Government or due to 
nuclear reaction, nuclear radiation or radio-active contamination for which 
the Government may be legally responsible.  

1278   12     (06/91)       System Performance

(1) Data processing systems installed under the rental contract shall be 
subject to inspection and acceptance by the Government. The Government's 
acceptance of a data processing system will be contingent upon that system 
maintaining a level of system performance of at least 90% for a period of 
thirty (30) consecutive days following installation. Should the 90% level 
not be attained in the first thirty (30) days following installation, the 
period of acceptance will be extended until a 90% level is maintained for 
thirty (30) consecutive days. Rental charges shall apply beginning on the 
first day of the successful thirty-day period.  

(2) The system average effectiveness level (system performance) is a 
percentage figure determined by dividing the total number of metered hours 
of the central processing unit by the number of such metered hours plus 
equipment failure downtime. Equipment failure downtime shall be measured by 
those intervals during the performance period when no jobs are run on the 
central processing unit because of equipment failure and shall begin with 
the time that the Contractor is notified of equipment failure and end at 
the time that the equipment is returned to the Government in proper 
operating condition exclusive of actual travel time required by Contractor'
s maintenance personnel not in excess of one hour per day on which such 
service was requested.


The system average effectiveness level (system performance) is a percentage 
figure determined by dividing the total productive operational use time by 
the total productive operational use time plus system failure downtime. The 
system is considered down when any machine(s) in the system is inoperable 
due to equipment failure. If two machines are inoperable at the same time, 
the downtime during the overlapping period will be computed as if only one 
machine were inoperable. System operational use time for the purpose of the 
Standard of Performance is defined as the time during which the Central 
Processing Unit is in actual operation including all intervals of time 
between start and stop time of the Central Processing Unit. 
(3) The use of the machines will be under the Government's exclusive 
management and control. The Government is responsible for assuring the 
proper use, management and supervision of the machines and programs, audit 
controls, operating methods and office procedures, and for establishing all 
proper checkpoints necessary for the Government's intended use of the 
machines. The Contractor shall have no obligations or liabilities for 
consequential damages caused by the Government's failure to fulfil any 
Government responsibilities.  

1278   13     (06/91)       Charges

(1) Rental and maintenance charges will normally be on a calendar month 
basis and the charges are to be firm for a period of one (1) year or the 
duration of the contract, whichever is less. Rental and maintenance charges 
shall not be payable until the month following the month for which the 
charges accrue. Rental and maintenance charges as set forth in the contract 
shall begin on the installation date which is established as the first work 
day following the day on which the equipment is installed ready for use and 
accepted by the Government.  

(2) All time charged for rental and maintenance shall be verified by the 
using agency and may be subject to Government audit.  

1278   14     (06/91)       Taxes

Unless otherwise stated, the monthly rental charges will include federal 
sales tax and duties, where applicable.   

1278   15     (06/91)       Option to Purchase

The Minister will have an option to purchase any item or all the equipment 
covered by a rental contract. The terms of purchase shall be stipulated in 
the contract.   

1278   16     (06/91)       Training and Technical Support

Training and technical supporting services to be provided by the Contractor 
shall be detailed in the rental contract.  

1278   17     (06/91)       Patents

All equipment furnished by the Contractor pursuant to the contract shall be 
free and clear of infringement of any patent or trademark and the 
Contractor shall defend any and all actions and suits charging such 
infringement and will save the Minister harmless from any loss, damage or 
expense whatsoever, including attorney's fees, in case any suit, action or 
claim is commenced or made alleging any such infringement. The Government 
shall provide prompt notice to the Contractor of any charge of infringement. 
In the event any device furnished by the Contractor does become or is 
likely to become the subject of a claim for patent infringement, the 
Contractor shall, at its own expense, procure the right for the Government 
to continue to use the said device or to promptly modify it to become 
non-infringing, or remove the equipment at no cost to the Government except 
for the charges up until the Government is enjoined from using such 

1278   18     (06/91)       Default

(1) If the Contractor is in default in carrying out any of the terms, 
conditions, covenants or obligations of the contract, the Minister may, by 
giving notice in writing, terminate the said contract.  

(2) If the Contractor becomes bankrupt or insolvent or has a receiving 
order made against it or makes an assignment for the benefit or creditors, 
or if an order is made or resolution passed for the winding up of the 
Contractor or if the Contractor takes the benefit or a statute for the time 
being in force relating to bankrupt or insolvent debtors, the Minister may, 
upon giving notice in writing to the Contractor, terminate the contract.  

(3) The Contractor shall not be liable for any loss or damage if the 
failure to perform the contract on which the notice of termination is based 
arises out of causes beyond the control and without the fault or negligence 
of the Contractor. Such causes include but are not restricted to strikes, 
floods, fires, epidemics, or acts of God.  

1278   19     (06/91)       No Bribe, Etc.

The Contractor warrants that no bribe, gifts, or other inducement has been 
paid, given or promised or offered any official or employee of the 
Government for, or with a view to, the obtaining of the contract.  

1278   20     (06/91)       Members of the House of Commons

No members of the House of Commons shall be admitted to any share or any 
part of the contract or to any benefit to arise therefrom.   
1278   21     (06/91)       Foreign Exchange

Unless otherwise provided in the contract or agreed to by the Minister, the 
Contractor shall not be entitled to any increase in the contract price by 
reason of foreign exchange fluctuations.  

1278   22     (06/91)       Alterations to Equipment

The Minister shall make no alterations to the leased equipment without the 
Contractor's written approval.   

1278   23     (06/91)       Removal of Equipment

The equipment shall not be moved from one geographical location to another 
or from one Government department to another without the Contractor's 
written approval.