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Hardware Purchase, Lease and Maintenance

Item Information

Remarks – Recommended Use of SACC Item

Use the following supplemental general conditions in contracts for the purchase or lease of hardware (which can include warranty and maintenance services) or for the separate purchase of maintenance services for existing equipment. If any software will be delivered under the contract, including any software necessary to run the hardware (other than firmware), use supplemental general conditions 4002 as applicable, and 4003. Use in conjunction with one of the following general conditions: 2010A, 2010B, 2030, 2035 or 2040, and with other supplemental general conditions, as applicable. Do not use with 2029 and 2010C.

When more than one supplemental general conditions apply to the requirement, contracting officers must list the supplemental general conditions in the priority of documents clause in ascending order based on the identification number.

If the contract requires deviations from these supplemental general conditions, contracting officers must be sure to note them in the Articles of Agreement. For example, include an alternate definition of the Principal Period of Maintenance if the one defined here does not meet the client's needs. Similarly, if Canada is e-purchasing hardware and the defined 12-month hardware warranty period does not meet the client's needs, contracting officers must redefine the hardware warranty period in the Articles of Agreement.

Contracting officers must also indicate in the Articles of Agreement which classes of hardware maintenance service are included in the contract. If no indication is given, the contractor will only be required to provide return-to-depot maintenance service.

If the hardware will be subject to a minimum availability level requirement, contracting officers must define that requirement in the Articles of Agreement. Articles 8 and 9 will only apply to the contract if the minimum level availability requirement has been defined.

Contracting officers must ensure that the name of the "technical" or "project" authority, as applicable, is provided in the contract.

Legal text for SACC item

Part I - Conditions Common to Hardware Transactions

The following information consists of conditions common to hardware transactions.

4001 01 (2010-01-11) Interpretation

  1. In the Contract, unless the context requires otherwise,
    "Delivery Date"
    means the date specified in the Contract for the delivery of the Hardware. If no date is specified elsewhere in the Contract, the Delivery Date is for any initial delivery, thirty (30) days from the date of the Contract; for any Hardware purchased or leased under an option, thirty (30) days from the date the option is exercised; and if the Contract provides for multiple orders, thirty (30) days from the date of each order;
    "Downtime"
    means the time, measured in hours and whole minutes, during which the Hardware is not available for Fully Functional Operation during User Time because of a malfunction of the Hardware. Downtime starts when Canada notifies the Contractor that the Hardware is not available for Fully Functional Operation and ends when the malfunction has been corrected and the Contractor notifies Canada that the Hardware has been restored to Fully Functional Operation, unless Canada then notifies the Contractor that the Hardware is still not available for Fully Functional Operation;
    "Firmware"
    means any computer programs stored in integrated circuits, read-only memory, or other similar devices within the Hardware;
    "Fully Functional Operation>"
    means that the Hardware is working according to all the Specifications, so that all of the functionalities of the Hardware can be used;
    "General Conditions"
    means the general conditions that form part of the Contract;
    "Hardware"
    means all the equipment, materials, matters and things to be provided, maintained, and supported, as applicable, by the Contractor under the Contract (including cables and other ancillary items). The term "Hardware" includes Firmware, if any, but does not include software or services. Unless the context requires otherwise, the term "Hardware" includes any Leased Hardware. Also, unless the context requires otherwise, each time the term "Hardware" is used, it will be read as also applying to each System delivered under the Contract;
    "Hardware Documentation"
    means all of the manuals, handbooks, user guides and other human-readable material to be provided by the Contractor to Canada for use with the Hardware, whether it is to be supplied in printed form or on an electronic storage medium, such as a CD-ROM;
    "Leased Hardware"
    means the Hardware leased under the Contract;
    "Hardware Maintenance Service"
    has the meaning given in Part V;
    "Operational Use Time"
    means the time, measured in hours and whole minutes, during which the Hardware performs its functions or activities in accordance with the Specifications during User Time, and includes all intervals between the stop and start times of the Hardware during User Time that do not constitute Downtime, such as maintenance scheduled in advance with Canada;
    "Ready for Use"
    describes the Hardware once the Contractor has delivered it and, if applicable, has installed, integrated and configured it so that it is available for Fully Functional Operation;
    "Specifications",
    despite the definition in the General Conditions, for the Hardware, means the functional or technical description of the Work set out or referred to in the Contract, including drawings, samples and models, and also includes, except to the extent inconsistent with anything in the Contract, any such description set out or referred to in any brochure, product literature or other documentation provided by the Contractor under the Contract, as well as any technical documentation published or made generally available by the manufacturer of any of the Hardware. For any System to be provided, if there is any inconsistency between the Specifications for an individual System component and the Specifications for the System as a whole, the Specifications for the System will prevail over the Specifications for any System component;
    "System"
    means the integrated combination of any of the Hardware delivered under the Contract and any other equipment, materials or software described in the Contract that are interconnected with or that otherwise interoperate with the Hardware together as a unit. There may be multiple "Systems" including different items of Hardware delivered under the Contract. A System may include Custom Software, if supplemental general conditions 4002 are part of the Contract and/or a System may include Licensed Software, if supplemental general conditions 4003 are part of the Contract;
    "User Time"
    means 7:00 a.m. to 7:00 p.m., Eastern Time, Mondays through Fridays, excluding statutory holidays observed by Canada at the site where the Hardware is being used.
  2. Words and expressions defined in the General Conditions and used in these supplemental general conditions have the meanings given to them in the General Conditions, unless provided otherwise. If the General Conditions contain sections entitled "Ownership" or "Warranty", those sections do not apply to the Hardware. Instead, the ownership and warranty provisions in these supplemental general conditions apply to the Hardware.
  3. If there is any inconsistency between the General Conditions and these supplemental general conditions, the applicable provisions of these supplemental general conditions prevail.
  4. Part I of these supplemental general conditions applies to the relationship between the Parties with respect to hardware transactions generally.
  5. Part II of these supplemental general conditions applies if any Hardware is being purchased or leased under the Contract.
  6. Part III of these supplemental general conditions applies if any Hardware is being purchased under the Contract, including Leased Hardware that is purchased because Canada exercises an option to purchase.
  7. Part IV of these supplemental general conditions applies if any Hardware is being leased under the Contract.
  8. Part V of these supplemental general conditions applies if either or both of Part III or Part IV applies, or if the Contract is for maintenance of Hardware already owned by Canada.

4001 02 (2010-01-11) Hardware Must be New

  1. All Hardware supplied by the Contractor, including parts used to provide the Hardware Maintenance Service under Part V, must be new and unused. The Hardware must also:
    1. be off-the-shelf, meaning it must be composed of standard equipment requiring no further research or development;
    2. be a model that is still in production by the manufacturer at the time of delivery; and
    3. conform to the version of the applicable specification or part number of the manufacturer in effect at the time of delivery.
  2. Unless the Contract provides otherwise, hardware or parts that have been refurbished or are certified as "equal to new quality" are not acceptable, including for the Hardware Maintenance Service.
  3. By supplying the Hardware, the Contractor is guaranteeing that the Hardware is not counterfeit, meaning it is not an unauthorized copy, replica, or substitute for the product manufactured by the original equipment manufacturer identified by name on the Hardware.

Part II - Conditions Common to Lease and Purchase

The following information consists of conditions common to lease and purchase.

4001 03 (2010-01-11) Delivery

The Contractor must deliver the Hardware to the location(s) designated by Canada by the Delivery Date. The Contractor must pay all costs associated with replacing any item damaged in transit to the final destination. The Contractor acknowledges that no item will be considered delivered on the Delivery Date if it is damaged or otherwise not ready for Canada to begin its acceptance procedures. The Contractor must, at a minimum, package the Hardware according to industry standards and include a packing slip with each shipment. The Contractor must also arrange for any rigging and drayage necessary to deliver the Hardware. All costs associated with packaging, shipping, transportation and delivery are included in the price of the Hardware.

4001 04 (2008-05-12) Special Site Delivery or Installation Preparation Requirements

  1. If the Contract describes special site preparation requirements, the Contractor must prepare the site for delivery or installation at its own expense according to those requirements, sufficiently in advance to meet the Delivery Date. All the costs associated with the special site preparation are included in the price of the Hardware.
  2. If the Contract provides that Canada is responsible for special site preparation requirements, then the following applies instead of subsection 1:
    1. Canada must prepare the site at its own expense in accordance with the site preparation requirements described in the Contract.
    2. If the Contract provides that there are special site preparation requirements, but does not describe them, the Contractor must deliver a complete written description of them to Canada immediately following the date of the Contract or, if the Delivery Date is more than thirty (30) days after the date of the Contract, at any time at least thirty (30) days before the Delivery Date. If the Contractor delivers the special site preparation requirements to Canada by this time, and Canada does not object to any of the Contractor's requirements within ten (10) days, Canada must prepare the site according to these requirements. If Canada is required to make any alterations or modifications because the Contractor's special site preparation requirements were incomplete or incorrect, the Contractor must reimburse Canada for any additional expenses it incurs. The Contractor guarantees that, if the site is prepared and maintained by Canada according to the special site preparation requirements, the resulting environment will permit the Hardware to operate according to the Specifications.
    3. Canada must complete the special site preparations and notify the Contractor that the site is ready at least five (5) working days before the Delivery Date, after which the Contractor may inspect the site at a time agreed to by Canada. Inspection by the Contractor does not relieve Canada of its obligation to prepare the site according to the special site preparation requirements described in the Contract.
    4. If Canada does not prepare the site according to the special site preparation specifications on time, unless the delay is due to an event reasonably beyond Canada's control, the Contractor will be entitled to be reimbursed for any additional costs that it can demonstrate that it reasonably and properly incurred as a direct result of the delay.
  3. If the Contract does not describe any special site preparation requirements, subsections 1 and 2 do not apply, and instead the Contractor guarantees that none are required for the Hardware to operate according to the Specifications.

4001 05 (2008-05-12) Installation, Integration and Configuration

  1. Unless provided otherwise in the Contract, the Contractor must unpack, assemble, install, integrate, interconnect, and configure all the Hardware at the location(s) specified in the Contract. Where necessary to complete this part of the Work, the Contractor must provide all required moving and installation resources, including but not limited to personnel, packing material, vehicles, cranes, and floor protection panels. After completing this part of the Work, the Contractor must provide Canada's on-site representative with written notification that the Hardware is Ready for Use. If either or both of Supplemental General Conditions 4002 and/or 4003 apply to the Contract, and the Contract provides that the System consists of the Hardware together with Licensed Software and/or Custom Software, the Work described in this article also applies to the entire System.
  2. The Contractor must supply all materials required to complete the assembly, installation, integration, interconnection, and configuration of the Hardware at the location(s) specified in the Contract so that it is Ready for Use and acceptance, including providing and setting up all the required connections to the power supply and any other necessary utilities, cables, and any other accessories or supplies.
  3. The Contractor must leave all work areas clean and tidy at the end of each workday and once the Work is complete, which includes removing and disposing of all packing materials.
  4. All costs associated with the Work described in this section are included in the price of the Hardware.

4001 06 (2008-05-12) Certification of Electrical Equipment

The Contractor guarantees that all electrical equipment delivered under the Contract is either:

  1. certified by an organization accredited by the Standards Council of Canada in accordance with Part I of the Canadian Electrical Code; or
  2. has been inspected by an organization acceptable to the Chief Electrical Inspector in the province, territory or city in Canada where the electrical equipment will be delivered, in which case the Contractor must present evidence of this inspection if requested by Canada.

4001 07 (2008-05-12) Hardware Documentation

  1. The Contractor must provide to Canada the same Hardware Documentation that it provides to other purchasers of similar hardware, and must include all supplements and revisions to the Hardware Documentation effective up to the Delivery Date. The Hardware Documentation must at least include all the documentation available to consumers from the manufacturer of the Hardware about the technical specifications of the Hardware and the Firmware, installation requirements, and operating instructions, as well as details about the software programs with which the Hardware functions, regardless of whether licenses to those software programs are provided under the Contract.
  2. The Contractor guarantees that the Hardware Documentation it provides is sufficiently detailed to allow Canada to use and test all the Hardware's functions.
  3. If the Contract states that the Contractor must provide maintenance documentation, the Contractor guarantees that the Hardware Documentation it provides is sufficiently detailed to permit Canada, or someone authorized by Canada, to maintain and repair the Hardware properly, and to test it for that purpose.
  4. The Contractor must deliver the Hardware Documentation to Canada with the Hardware. If multiple units are delivered, unless the Contract specifically provides otherwise, the Contractor must provide one complete set of Hardware Documentation with each item of Hardware.
  5. If there are changes to the Hardware during the contract period, the Contractor must update the Hardware Documentation, at no additional cost to Canada. The Contractor must provide these updates within ten (10) days of the updates being made available by the manufacturer. If available from the manufacturer, the updates must include supporting documentation that identifies any problem resolved or enhancement made to the Hardware, any new feature(s) added, and any necessary installation instructions.
  6. Despite anything in the General Conditions concerning copyright, the copyright in the Hardware Documentation will not be owned or transferred to Canada. However, Canada has the right to use the Hardware Documentation and may, for its own internal purposes, copy it for use by individuals using or supporting the Hardware, as long as Canada includes any copyright and proprietary right notices that are part of the original document.
  7. Unless provided otherwise in the Contract, the Hardware Documentation must be delivered in both English and French. If the Contract provides that the Hardware Documentation is only required to be provided in one of Canada's official languages, Canada has the right to translate it or have it translated for its own use. Canada owns any translation and is not required to provide it to the Contractor. Canada must include any copyright and proprietary right notices that are part of the original document in any translation. The Contractor is not responsible for technical errors that arise as a result of any translation made by Canada.

4001 08 (2010-01-11) Minimum Availability Level Requirement

  1. Each item of Hardware must achieve the minimum availability level specified in the Contract during each month of the contract period. If no minimum availability level is specified, this section does not apply to the Contract.
  2. The availability level achieved each month must be calculated as follows:

    Operational Use Time / [Operational Use Time + Downtime] x 100%

  3. The Contractor must monitor the performance of the Hardware and submit written monthly reports regarding the availability level during each calendar month of the contract period. The report must be submitted to the Contracting Authority and the Technical or Project Authority within thirty (30) days of the end of the month covered by the report.
  4. If the Contract states that no availability level reports are required, the Contractor acknowledges that Canada may monitor the availability level or perform testing at any time during the contract period.
  5. If any Hardware does not meet the minimum availability level in any given month, in addition to any other remedy provided for in the Contract, the Contractor must immediately perform Hardware Maintenance Service to restore the Hardware to Fully Functional Operation at the minimum availability level.

4001 09 (2010-01-11) Availability-Level Testing Before Acceptance

  1. Availability-level testing may be required by Canada before acceptance if the Contract specifies a Minimum Availability Level. If no Minimum Availability Level is specified, this section does not apply to the Contract.
  2. The Contractor must notify the Technical or Project Authority in writing once the work under section 5 is complete and the Hardware is Ready for Use. Canada must start any availability-level testing within five (5) working days after receiving this notice or by the Ready-for-Use date specified in the Contract, whichever is later.
  3. If the Contract provides that section 5 does not apply to the Contract, and Canada intends to conduct availability-level testing on the Hardware, Canada agrees to install the Hardware within ten (10) working days after receiving the Hardware or ten (10) working days after the Delivery Date, whichever is later. Canada agrees to start any availability-level testing within two (2) working days of completing the installation.
  4. Without affecting any of Canada's other rights or remedies under the Contract, Canada must have full access to the Hardware and may make unrestricted operational use of it after the Contractor has given notice that it is Ready for Use or, where installation is Canada's responsibility, after it is delivered to and installed by Canada. However, Canada must provide the Contractor, at all times before the Hardware is accepted, priority access to the Hardware to maintain it and to perform the Contract.
  5. To pass the availability-level test, the Hardware must achieve the Minimum Availability Level for thirty (30) consecutive days within ninety (90) days of the testing beginning. During availability-level testing, the Contractor must provide weekly written reports to Canada showing the Hardware performance in relation to the Minimum Availability Level.
  6. If the Hardware does not pass the availability-level tests in the time described in subsection 5, Canada may, without affecting any other rights or remedies described in the Contract, choose to do one or more of the following:
    1. require the Contractor to replace some or all of the Hardware with new Hardware, which would again be subject to availability-level testing and acceptance;
    2. extend the availability-level testing period; and
    3. terminate the Contract for default, at no cost to Canada.
  7. If Canada does not carry out any availability-level testing within the time described in this section, when the availability level of the Hardware is calculated, the time during which Canada otherwise would have conducted that testing will be considered uninterrupted Operational Use Time. However, this will not apply if Canada is unable to start or continue the availability-level testing because of an event reasonably beyond Canada's control. In that case, Canada may temporarily suspend the availability-level testing and the time limits for testing referred to in this section or elsewhere in the Contract will be extended by the number of days that testing is suspended, up to a maximum extension of sixty (60) days.
  8. If Canada determines that the Hardware successfully passes the availability-level testing, which in addition to the above may include tests of any function of the Hardware to determine whether it meets the Specifications, the first day of the 30-day period in which the Hardware achieves the Minimum Availability Level will be considered the acceptance date.

4001 10 (2008-05-12) Acceptance

  1. The Hardware, including all the Work related to it, is subject to acceptance by Canada. As part of its acceptance process, Canada may test any function of the Hardware to determine whether it meets the Specifications. If any of the Work does not meet the requirements of the Contract, Canada may reject it or require that it be corrected at the Contractor's expense before accepting it. No payments for the Hardware are due under the Contract unless the Hardware is accepted.
  2. Acceptance by Canada does not relieve the Contractor of its responsibility for defects in the Hardware or other failures to meet the requirements of the Contract or of its warranty or maintenance obligations under the Contract.
  3. Except where section 9 applies, the procedure for acceptance will be as follows:
    1. the Contractor must notify the Contracting Authority in writing once the Hardware is Ready for Use by referring to this provision of the Contract and requesting acceptance of the Work;
    2. Canada will have thirty (30) days to perform its acceptance procedures (the "Acceptance Period"); and
    3. if Canada provides notice of any deficiency during the Acceptance Period, the Contractor must address the deficiency at no cost to Canada as soon as possible and notify Canada in writing once the Work is complete, at which time Canada will be entitled to re-inspect the Work and the Acceptance Period will start again.
  4. Despite Supplemental General Conditions 4002 and 4003, if either or both apply to the Contract, if the Contract states that the System consists of the Hardware together with Licensed Software and/or Custom Software, the period for conducting any acceptance tests for the System, including any Licensed Software and any Custom Software components of the System, will be the acceptance period for the Hardware specified in these supplemental general conditions.

4001 11 (2008-05-12) Firmware

  1. The Contractor must deliver the Hardware equipped with all the Firmware required to use all the Hardware's functions.
  2. Canada will not own any of the Firmware, but the Contractor grants to Canada a perpetual, non-exclusive, irrevocable, royalty-free license to use the Firmware with the Hardware. Canada may transfer this license if Canada transfers ownership of the Hardware to a third party. Any reference in the Contract to the Firmware being a deliverable is a reference to the license to use that Firmware, not ownership of the Firmware.
  3. The Contractor guarantees that it has the right to license the Firmware and full power and authority to grant to Canada the rights to use the Firmware described in this section. The Contractor also guarantees that all necessary consents to that grant have been obtained.

4001 12 (2008-05-12) Total System Responsibility

  1. If the Contract provides that the Hardware is part of one or more Systems, the Contractor must supply the System(s) as a whole and ensure that each System is available for Fully Functional Operation at all times.
  2. If the Contract provides that the Contractor must incorporate Government Property into the System, the obligations under subsection 1 include the Government Property and the Contractor must make any adjustments to the Government Property required to ensure compatibility with the rest of the System. If requested by Canada during the Hardware Warranty Period (defined below), the Contractor must as soon as possible correct any failure of the System to conform to the Specifications that is caused by the improper interconnection or integration of any Government Property into the System. This provision survives acceptance of the Work and does not limit any of the Contractor's warranty or maintenance obligations under the Contract.
  3. Despite subsections 1 and 2, the Contractor is not responsible for a failure of the System to meet the Specifications, if that failure is directly caused by a defect in any Government Property, or by any failure of Government Property to meet its specifications. This subsection does not apply to any Government Property that was originally supplied to Canada by the Contractor, but is then made available by Canada to the Contractor for use under the Contract.

Part III - Additional Conditions: Purchase

The following information consists of additional conditions regarding purchases.

4001 13 (2008-05-12) Ownership of the Purchased Hardware and Risk of Loss or Damage

  1. Unless provided otherwise in the Contract, including subsection 2, Canada becomes the owner of the Hardware once the Hardware has been delivered to and accepted by Canada according to the conditions of the Contract.
  2. If Canada pays the Contractor for any materials, parts, work-in-process, or finished work, either by way of progress payments or otherwise, then Canada will own them once the payment is made, unless ownership has already passed to Canada under another provision of the Contract. The fact that ownership has transferred to Canada does not mean that Canada has accepted the materials, parts, work-in-process or finished work, and does not relieve the Contractor of its obligation to perform the Work in accordance with the Contract. Also, the risk of loss or damage to the materials, parts, work-in-process or finished work remains with the Contractor until they are delivered to Canada in accordance with the Contract, even if ownership has transferred to Canada.
  3. After delivery, the Contractor remains responsible for loss or damage to any part of the Work caused by the Contractor or any subcontractor or any person for whom either is responsible.
  4. The Contractor guarantees that it has the right to transfer ownership of the Hardware to Canada and that there are no liens, attachments, charges, encumbrances, or claims affecting the Hardware. Once ownership passes to Canada, the Contractor must, if Canada requests, establish to the Contracting Authority's satisfaction that the title is free and clear of all liens, attachments, charges, encumbrances, or claims. If requested by the Contracting Authority, the Contractor must execute any transfer documentation and take any other steps that are necessary to perfect Canada's title.

4001 14 (2010-01-11) Warranty for Purchased Hardware

  1. Even if Canada has accepted the Work, the Contractor guarantees that, for twelve (12) months after the Hardware is accepted (the "Hardware Warranty Period"), it will be free from all defects in materials or workmanship, be free from all design defects, and conform in all ways with the requirements of the Contract, including the Specifications and any Minimum Availability Level requirements. Because items of Hardware may be accepted on different days, the Hardware Warranty Period for different items of Hardware delivered under the Contract may begin and end on different days. If the Contract provides that the System consists of the Hardware together with Licensed Software and/or Custom Software, the Hardware Warranty Period will also apply to the Licensed Software and/or Custom Software components of the System and this longer period will apply to all the warranty, maintenance and support obligations described in Supplemental General Conditions 4002 and 4003.
  2. This warranty does not apply to a specific item of Hardware if the only reason that item fails to conform to the requirements of the Contract is because:
    1. Canada is negligent or does not use the Hardware in accordance with the Specifications;
    2. electric power or air conditioning or humidity control at the site does not perform according to any special site preparation requirements described in the Contract;
    3. a person other than the Contractor, a subcontractor, or a person approved by either of them modifies the Hardware or attaches equipment to the Hardware that was not designed or approved for use with the Hardware by the Contractor, a subcontractor, or the manufacturer of the Hardware; or
    4. Canada uses consumable supplies or materials in or on the Hardware that are supplied by a person other than the Contractor or a subcontractor or a person for whom either of them is responsible, if those consumables or materials do not conform to the Specifications or to the Hardware manufacturer's instructions to consumers.
  3. The Contractor must provide Hardware Maintenance Service for the Hardware throughout the Hardware Warranty Period. All charges and costs associated with providing the Hardware Maintenance Service during the Hardware Warranty Period are included in the price of the Hardware. The Contractor must continue to provide Hardware Maintenance Service for any part of the Hardware that is repaired, replaced or otherwise made good as part of the Hardware Maintenance Service for the remainder of the Hardware Warranty Period that applied to the original item of Hardware.

Part IV - Additional Conditions: Lease

The following information consists of additional conditions regarding leases.

4001 15 (2008-05-12) Ownership of Leased Hardware

  1. The Contractor will remain the owner of all the Leased Hardware, unless Canada either exercises any option to purchase the Hardware included in the Contract, or purchases the Hardware under a separate agreement.
  2. If the Contract contains an option to purchase the Hardware or any part of it, Canada will become the owner of that Hardware on the date it exercises that option, or the date Canada specifies when it exercises the option, if any. At the time of that purchase, the provisions of Part III automatically apply to the purchased Hardware. Once Canada becomes the owner, Canada bears the risk of loss or damage to the purchased Hardware, but the Contractor must honour the warranty in section 14. Once Canada becomes the owner, no more lease payments are due under the Contract for the purchased Hardware.

4001 16 (2008-05-12) Lease Period

  1. The period of the lease starts on the day the Hardware is accepted and ends when it expires in accordance with the Contract (Lease Period), unless the lease is terminated earlier in accordance with the Contract. If it is not specified elsewhere in the Contract, the Lease Period is twelve (12) months.
  2. Unless provided otherwise in the Contract, if the Contract allows for additional items to be leased during the contract period, regardless of when those items become part of the Leased Hardware, the Lease Period for all the Leased Hardware will end on the day that the Lease Period for the first item of Hardware leased under the Contract expires.
  3. If the first day of the Lease Period is not on the first day of a calendar month, then the charge for the first and last months of the lease will be the portion of the specified monthly charge determined by multiplying the number of days in the month during which the lease is in effect by 1/30 of the monthly lease charge in effect under the Contract at the time.

4001 17 (2010-01-11) Warranty for Leased Hardware

  1. Even if Canada has accepted the Leased Hardware, the Contractor warrants that, throughout the Lease Period (which is also the "Hardware Warranty Period"), it will be free from all defects in materials or workmanship, be free from all design defects, and conform in all ways with the requirements of the Contract, including the Specifications and any Minimum Availability Level requirements. If the Contract provides that the System consists of the Hardware together with Licensed Software and/or Custom Software, the Hardware Warranty Period will also apply to the Licensed Software and/or Custom Software components of the System and this longer period will apply to all the warranty, maintenance and support obligations described in Supplemental General Conditions 4002 and 4003.
  2. This warranty does not apply to a specific item of Leased Hardware if the only reason that item fails to conform to the requirements of the Contract is because:
    1. Canada is negligent or does not use the Hardware in accordance with the Specifications;
    2. electric power or air conditioning or humidity control at the site does not perform according to any special site preparation requirements described in the Contract;
    3. a person other than the Contractor, a subcontractor, or a person approved by either of them modifies the Hardware or attaches equipment to the Hardware that was not designed or approved for use with the Hardware by the Contractor, a subcontractor, or the manufacturer of the Hardware; or
    4. Canada uses consumable supplies or materials in or on the Hardware that are supplied by a person other than the Contractor or a subcontractor or a person for whom either of them is responsible, if those consumables or materials do not conform to the Specifications or to the Hardware manufacturer's instructions to consumers.
  3. The Contractor must provide Hardware Maintenance Service for the Leased Hardware throughout the Hardware Warranty Period. All charges and costs associated with providing the Hardware Maintenance Service during the Hardware Warranty Period are included in the lease rates. The Contractor must continue to provide Hardware Maintenance Service for any part of the Leased Hardware that is repaired, replaced or otherwise made good as part of the Hardware Maintenance Service for the remainder of the Hardware Warranty Period that applied to the original item of Leased Hardware.

4001 18 (2008-05-12) Termination of Lease for Convenience

  1. Instead of the section of the General Conditions entitled "Termination for Convenience", this section applies to the Leased Hardware.
  2. Despite anything contained in the Contract, Canada may terminate the lease for all or any part of the Leased Hardware at any time during the Lease Period by giving notice to the Contractor sixty (60) days in advance.
  3. If the Contracting Authority issues a termination notice under subsection 2, the only amounts that the Contractor will be entitled to be paid in connection with the termination are:
    1. the monthly lease charges for the Leased Hardware, or the part of the Leased Hardware for which the lease is terminated, up to the date of termination, prorated as necessary if the termination date does not coincide with the end of the month; and
    2. the lease termination charge, if one is specifically set out in the Contract.
  4. Despite subsection 3, the total amount that the Contractor will be entitled to be paid in connection with the termination under subsection 3, together with any amounts already paid to the Contractor for the lease of the Hardware, must not exceed the total Contract Price for the lease of the Hardware, or, in the case of a partial termination, the portion of the Contract Price that applies to the portion of the lease that is terminated.

4001 19 (2008-05-12) Risk of Loss or Damage to Leased Hardware

  1. The Contractor agrees to bear the risk of loss of or damage to the Hardware while it is being transported or installed and during the entire time the Hardware is in Canada's possession, except losses or damages caused by the negligence of Canada or someone acting on Canada's behalf.
  2. If the Hardware is lost or damaged during the Lease Period, unless the loss or damage is caused by Canada or by someone acting on Canada's behalf, Canada is not required to make lease payments while the Contractor repairs or replaces the Hardware and, at Canada's option, the Lease Period will be extended by the amount of time the Contractor takes to repair or replace the Hardware. This subsection does not prevent Canada from terminating the Contract for default, if the Hardware is unavailable for Fully Functional Operation for more than thirty (30) days.

4001 20 (2008-05-12) Modifications to Leased Hardware

Canada agrees not to modify the Leased Hardware unless it obtains the Contractor's written approval, which the Contractor must not unreasonably withhold.

4001 21 (2008-05-12) Relocation of Leased Hardware

Canada may, at its option and cost, relocate the Leased Hardware within the facility where the Leased Hardware is in use or to another facility, using the moving resources of its choice. Any relocation in no way affects the Contractor's warranty or its obligation to provide Hardware Maintenance Service for the Leased Hardware, unless the Contractor can demonstrate that the relocation is directly responsible for the failure or malfunction of the Leased Hardware. In that case, Canada will be responsible for repairing any damage caused by the relocation, or for paying the Contractor to repair that damage, and the remainder of the Contractor's warranty and maintenance obligations will remain in effect.

4001 22 (2008-05-12) De-installation and Removal of Leased Hardware

  1. The Contractor must de-install and remove the Hardware promptly after the expiration or termination of the lease. If the Lease Period is different for different items of Hardware, this obligation applies to each item of Hardware when the lease ends. The Contractor must provide all necessary removal resources, including cranes, and must arrange for any necessary transportation, rigging and drayage in connection with the removal of the Hardware from Canada's premises. All costs associated with the de-installation, removal and transportation to the Contractor's premises are included in the lease rates.
  2. If the Contractor does not de-install and remove the Hardware within thirty (30) days of the end or termination of the lease, at Canada's option, ownership of the Leased Hardware will automatically transfer to Canada or Canada may arrange for the de-installation and removal of the Leased Hardware, at the Contractor's cost. Canada may deduct this amount from any amount owing by Canada to the Contractor from time to time, under the Contract or otherwise.

4001 23 (2008-05-12) Quiet Enjoyment

The Contractor guarantees that it has full power and authority to lease the Hardware to Canada. The Contractor also guarantees that, during the Lease Period, if Canada is performing its obligations under the Contract, Canada will have unlimited use of the Hardware without disturbance by the Contractor, or any person acting on behalf of the Contractor or who has rights granted by the Contractor, except when the Contractor is performing Hardware Maintenance Service under the Contract.

4001 24 (2008-05-12) Right to Withhold Lease Payments

If the Contractor is not carrying out all of its obligations under the Contract, Canada may, without affecting any other right that Canada may have, including the right to terminate for default, withhold the lease payments from the Contractor until the default is cured. The Contracting Authority may exercise this right by sending a notice to the Contractor that describes the default.

Part V - Additional Conditions: Maintenance

The following information consists of additional conditions regarding maintenance.

4001 25 (2010-01-11) Hardware Maintenance Service

  1. In this Part, the "Hardware Maintenance Period" means:
    1. for Hardware purchased under the Contract, the Hardware Warranty Period described in section 14, plus any time by which the Hardware Maintenance Period is extended if the Contract includes an option for extending the Hardware Maintenance Service or the Contract is otherwise amended to extend the Hardware Maintenance Period;
    2. for the Leased Hardware, the entire Lease Period;
    3. for Leased Hardware that is later purchased under the Contract, both the Lease Period and, beginning on the date of purchase, the period described in (a); and
    4. for Hardware that is neither purchased nor leased under the Contract, but for which the Contractor is providing Hardware Maintenance Service under the Contract, the complete contract period, unless the Contract provides for a shorter period.
  2. The Contractor agrees to maintain the Hardware according to this Part to ensure that it remains capable of Fully Functional Operation throughout the Hardware Maintenance Period (the "Hardware Maintenance Service"). As part of the Hardware Maintenance Service, the Contractor agrees to diagnose and resolve all problems that occur in the Hardware by repairing, replacing or otherwise making good the part or parts of the Hardware that are defective or do not meet the Specifications as soon as possible. The Contractor agrees that a problem is not resolved until the Hardware is restored to Fully Functional Operation.
  3. The cost of providing all labour, parts and other materials or travel required to restore the Hardware to Fully Functional Operation or perform any other part of the Hardware Maintenance Service described in this section is included in the Hardware Maintenance Service. No additional charges for time, material or other costs related to maintaining the Hardware can be made during the Hardware Maintenance Period, other than the charges contemplated by subsections 26(3)(e) and (f).
  4. The Contractor must accept and respond to Hardware Maintenance Service calls during the "Principal Period of Maintenance" (PPM). If the PPM is not defined elsewhere in the Contract, the PPM is twelve (12) hours each day, from 7 a.m. to 7 p.m., Eastern Time, Monday to Friday, not including statutory holidays observed by Canada.
  5. As part of the Hardware Maintenance Service, the Contractor must provide Canada with technical support through a single toll-free hotline with service available in English and French, based on the caller's language preference, in accordance with the following:
    1. The Contractor's hotline must be staffed by qualified personnel who are able to respond to user questions and, to the extent possible, resolve user problems and provide advice about problems relating to all the Hardware and the Hardware Documentation, as well as installation, configuration, integration and interconnection issues relating to the Hardware. For all user problems that cannot be resolved over the telephone, the Contractor must issue a trouble ticket for Hardware Maintenance Service, either for Return-to-Depot Maintenance Service or On-Site Maintenance Service described in section 26, as applicable.
    2. The Contractor's hotline must be available, at a minimum, throughout the PPM.
    3. The Contractor must provide its hotline telephone number to the Contracting Authority immediately after the Contract is awarded.
    4. The Contractor must pick up all hotline calls within 5 rings 95 percent of the time. The Contractor must answer all calls, with a live service agent, within 2 minutes 95 percent of the time.
  6. As part of the Hardware Maintenance Service, the Contractor must also provide Canada with technical support through a Web site support service, which must include, as a minimum, frequently asked questions and, if applicable, on-line software diagnostic routines, support tools, and services. The Contractor's Web site must provide support in English and in French. The Contractor's Web site must be available to Canada's users twenty-four (24) hours a day, 365 days a year, and must be available 99 percent of the time. The Contractor must provide its Web site address to the Contracting Authority immediately after the Contract is awarded.
  7. Each time the Contractor provides Hardware Maintenance Service, except Hardware Maintenance Service under sections 5 or 6, the Contractor's service technician must prepare a Hardware Maintenance Service report. For any Hardware Maintenance Service provided on site, the Contractor must provide one copy of this report to the representative of Canada at the site when the work is completed. For any Hardware Maintenance Service performed off site, the Contractor must include a copy of this report with the Hardware when it is returned to Canada. The Contractor must keep copies of the reports for six (6) years from the date the Contract expires or is terminated and provide a copy of any Hardware Maintenance Service reports to the Contracting Authority on request. Each Hardware Maintenance Service report must include the following:
    1. the date and time the Contractor received the maintenance call;
    2. the service location that received or responded to the maintenance call;
    3. the serial number for the item of Hardware;
    4. the name of person who performed the maintenance;
    5. if the maintenance is performed on site, the time the service technician arrived at the site, and all the time spent working at the site, including the number of hours and date for each day worked at the site;
    6. a description of symptom;
    7. the diagnosis of problem;
    8. a list of all parts replaced or installed;
    9. the identification number of each major assembly removed or exchanged, if any; and
    10. if the maintenance was performed on site, both the name of the Contractor's service technician and the service location from which the representative works, as well as the name and signature of Canada's representative at the site who accepts that the Hardware appears to have been restored to Fully Functional Operation.
  8. The Contractor guarantees that the parts required to perform the Hardware Maintenance Service will be available throughout the Hardware Maintenance Period.
  9. Canada becomes the owner of any parts used to repair or maintain the Hardware (which themselves become part of the Hardware), except for Leased Hardware.
  10. Canada acknowledges that, in performing the Hardware Maintenance Service, the Contractor and its employees, agents, and subcontractors may develop and share with Canada ideas, know-how, teaching techniques, and other intellectual property. Except as otherwise provided in the Contract, ownership of that intellectual property will belong to the Contractor. As long as the Contractor at all times observes the confidentiality provisions of the Contract, the Contractor will be entitled to use that intellectual property for whatever purposes it sees fit, including in the services it provides to its other customers, on the condition that Canada also has the right, without cost, to use that intellectual property for its own purposes.

4001 26 (2010-01-11) Classes of Hardware Maintenance Service

  1. This section describes two classes of Hardware Maintenance Service: "Return-to-Depot Maintenance Service" and "On-Site Maintenance Service". If the Contract specifies that more than one class of service applies, Canada may specify the class of service required for each item of Hardware, either in the Articles of Agreement or, if the Contract contemplates multiple orders for the purchase or lease of Hardware, in the individual order at the time the Hardware is purchased or leased. If the Contract does not specify the required class of service, the Contractor must provide Return-to-Depot Maintenance Service only.
  2. For Return-to-Depot Maintenance Service, during the PPM throughout the Hardware Maintenance Period, the Contractor must pick up and return the Hardware to and from the location in Canada where the Hardware was in use at the time the problem occurred. The Contractor must pick up the Hardware requiring maintenance within forty-eight (48) hours of Canada requesting maintenance. Within six (6) working days of Canada requesting maintenance, the Contractor must restore the Hardware to Fully Functional Operation and return it to Canada at the location where it was in use at the time the problem occurred, or must deliver a replacement that meets the requirements of the Contract.
  3. For On-Site Maintenance Service, during the PPM throughout the Hardware Maintenance Period, the Contractor must perform on-site maintenance on any Hardware for which a problem is reported at the location in Canada where the Hardware was in use at the time the problem occurred, in accordance with the following:
    1. The Contractor must arrive on site within the following timeframes:
      1. If the equipment is located within a radius of 100 km from any population center of at least 100,000 people, a service technician must respond by telephone within 1 hour of the telephone call for service and a service technician must arrive at the site within twenty-four (24) hours of the initial call requesting service;
      2. If the equipment is located within a radius of 100 km from any population center of 30,000 to 99,999 people, a service technician must respond by telephone within 1 hour of the telephone call for service and a service technician must arrive at the site within forty-eight (48) hours of the initial call requesting service; and
      3. For all other locations within Canada, a service technician must respond by telephone within 1 hour of the telephone call for service and a service technician must arrive at the site within seventy-two (72) hours of the initial call requesting service.
    2. After starting the maintenance, the Contractor must work continuously throughout the PPM until it returns the Hardware to Fully Functional Operation or until Canada suspends the work.
    3. The period from the time that Canada notifies the Contractor to suspend the Work until Canada notifies the Contractor to resume work will not be considered Downtime in the availability level calculation, if applicable. If the Hardware requires maintenance at a time when the required response time would result in the Contractor's service technician arriving at the site outside of the PPM, and Canada does not request service outside of the PPM at the applicable rate, if available under the Contract, then the period until the next PPM will not be considered Downtime in any availability level calculation.
    4. Within 4 working days of Canada requesting maintenance, the Contractor must restore the Hardware to Fully Functional Operation or must deliver a replacement that meets the requirements of the Contract.
    5. If the Contract includes a separate hourly rate for On-Site Maintenance Service performed outside the PPM, and the user placing the call for Hardware Maintenance Service specifically requests that the service be performed outside the PPM at an additional charge, the Contractor must arrive at the site within the timeframes specified in subsection 3(a) as though the service were being performed within the PPM. In this case, the Contractor is entitled to include a charge on the next invoice, at the On-Site Maintenance Service hourly rate for work outside the PPM specified in the Contract, for the hours worked outside the PPM. The Contractor is entitled to charge for the actual time worked outside of the PPM or two (2) hours, whichever is more, but is not entitled to charge for travel time. Where the Contractor performs the Hardware Maintenance Service outside the PPM, the time outside the PPM until the Hardware is restored to Fully Functional Operation will be considered Downtime.
    6. The Contractor may also submit a charge on its next invoice, at the On-Site Maintenance Service hourly rate for work outside the PPM specified in the Contract, for hours worked outside the PPM where the Contractor arrives at the site during the PPM and begins the Work, but is unable to complete the Work during the PPM, if Canada's on-site representative specifically requests that the service technician remain after the PPM ends to complete the Work at an additional charge. To submit this charge, the Contractor must obtain the signature of Canada's on-site representative agreeing to the additional charge. Because the Contractor's service technician is already at the site, the Contractor must only charge for the actual time worked outside the PPM, and no minimum charge applies. Where the Contractor performs the Hardware Maintenance Service outside the PPM, the time outside the PPM until the Hardware is restored to Fully Functional Operation will be considered Downtime.
    7. If no On-Site Maintenance Service hourly rate for work outside the PPM is specified in the Contract, the Contractor is not required to perform the Hardware Maintenance Service outside the PPM and must not submit a charge if it chooses to complete the Work outside the PPM.