Exchange rate fluctuation adjustment

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Archived - Standard Acquisition Clauses and Conditions Manual | CanadaBuys

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Legal text for SACC item

  1. The foreign currency component (FCC) is defined as the portion of the price or rate that will be directly affected by exchange rate fluctuation. The FCC should include all related taxes, duties and other costs paid by the Bidder and which are to be included in the adjustment amount.
  2. For each line item where a FCC is identified, Canada assumes the risks and benefits for exchange rate fluctuation, as shown in the Basis of Payment. For such items, the exchange rate fluctuation amount is determined in accordance with the provision of this clause.
  3. The total price paid by Canada on each invoice will be adjusted at the time of payment. The exchange rate adjustment amount will be calculated in accordance with the following formula:
    Exchange rate adjustment = FCC x Qty x ( i1 - i0 ) / i0
    where formula variables correspond to:
    FCC
    Foreign currency component (per unit)
    Qty
    quantity of units
    i0
    Initial exchange rate (CAN$ per unit of foreign currency [for example US$1]).
    The initial exchange rate is set as the Bank of Canada rate on the solicitation closing date. The Bank of Canada publishes its rates each business day by 16:30 Eastern Time.
    i1
    Exchange rate for adjustments (ERA) (CAN$ per unit of foreign currency [for example US$1]). The Bank of Canada publishes its rates each business day by 16:30 Eastern Time.
    1. The ERA for goods will be the Bank of Canada rate on the date the goods were delivered.
    2. The ERA for services will be the Bank of Canada rate on the last business day of the month for which the services were performed.
    3. The ERA for advance payments will be the Bank of Canada rate on the last business day prior to the payment. The last published business day rate will be used for non-business days.
  4. The Contractor must indicate the total exchange rate adjustment amounts (whether they are upward, downward or present no change) as a separate item on each invoice or claim for payment submitted under the Contract. Where an adjustment applies, the Contractor must submit with their invoice form PWGSC-TPSGC 450The information is only accessible to federal government department and agency employees., Claim for Exchange Rate Adjustments.
  5. The exchange rate adjustment will only impact the payment to be made by Canada where the exchange rate fluctuation is greater than 2% (increase or decrease), calculated in accordance with column 8 of form PWGSC-TPSGC 450The information is only accessible to federal government department and agency employees. (that is [ i1 - i0 ) / i0]).
  6. Canada reserves the right to audit any revision to costs and prices under this clause.
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