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Public Works and Government Services Canada

1. Chapter 1 - Public Procurement

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1.1 Overview of public procurement

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  1. The mandate of Public Works and Government Services Canada (PWGSC) is to provide services to all Canadian federal departments, and is summarized in section 5 of the Department of Public Works and Government Services Act. This section stipulates that:
    "The Department shall operate as a common service agency for the Government of Canada, and its activities as a common service agency shall be directed mainly toward providing the departments, boards and agencies of the Government of Canada with services in support of their programs."
  2. The role of PWGSC as a common service provider of both mandatory and optional acquisition services is further elaborated in the Treasury Board (TB) Common Services Policy.
  3. Public procurement by Canada is legislated and guided by a number of international and national trade agreements, and acts, as well as policies, directives, and guidelines provided by TB, the Treasury Board Secretariat (TBS) and PWGSC. Certain departments such as Indian and Northern Affairs Canada and Industry Canada are responsible for programs that have a direct impact on procurement. In addition to the above, and the content in this Supply Manual, contracting officers must also be cognisant of policy notifications, relevant communiqués and internal operating procedures.

1.5 About the Supply Manual

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  1. The Supply Manual with its policies and procedures is written for the use of contracting officers from Public Works and Government Services Canada (PWGSC) Acquisitions Branch and regional acquisitions offices to assist them in providing procurement services as a common service provider. Contracting officers from PWGSC Acquisitions Branch and regional acquisitions offices may contact the Strategic Policy Development and Integration Directorate for guidance by email at dppapublications.appdpublications@tpsgc-pwgsc.gc.ca. Whenever the term "contracting officer" is used throughout this manual, it refers to contracting officers within Acquisitions Branch and the regional acquisitions offices of PWGSC.
  2. PWGSC staff undertaking internal contracting activities, and not providing services in PWGSC's role as a common service provider for procurement under the TB Common Services Policy, should refer to PWGSC internal procurement policies such as the PWGSC Departmental Policy (DP) 099 Policy on ProcurementThe information is only accessible to federal government department and agency employees. and procedures such as the Contract Management Guide, or refer to the TB policies and directives on procurement. The Supply Manual may be used as a reference source for such internal procurements, however, it does not supersede the information contained in the above noted policies, guides, and directives.
  3. Other government departments and agencies are encouraged to use this Supply Manual as reference material for general procurement knowledge. However, for guidance on their own procurement practices, they should refer to their own organizations' policy and guidance procedures as well as Treasury Board contracting policies and directives. Other government departments and agencies should seek advice from their own internal policy group as some Supply Manual policies and procedures are applicable only to PWGSC Acquisitions Branch and the regional acquisitions offices.
  4. The Supply Manual describes the acquisitions-related activities of PWGSC's Acquisitions Branch and regional acquisitions offices. It references laws, regulations, government and departmental policies, directives, and procedures that have an impact on the contracting and procurement activities of the Acquisitions Branch and the regional acquisitions offices.
  5. Contracting officers should be aware that this manual and the contracting policies referenced may be read by and referred to by a number of parties interested in procurement activities such as clients, suppliers, the general public, and the media.
  6. Canadian government procurement is carried out in a decentralized manner. Individual departments award contracts under their own authorities for services, and under certain authorities for goods and construction as delegated by the Minister of PWGSC. They make a considerable number of lower dollar value purchases through the use of these authorities and make purchases of varying values through their authorized use of procurement instruments put in place by PWGSC.
  7. The Supply Manual is to be read in conjunction with other government policies and directives, in particular those released by TB and TBS. Acquisition policies are regularly updated by Policy Notifications as well as by TB Contracting Policy Notices. The Standard Acquisition Clauses and Conditions Manual must be read as a complementary document to the Supply Manual.

1.5.1 Organization of the Manual

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The Manual generally follows the sequence of a typical procurement process. The structure is as follows:

  1. Chapter 1, Public Procurement, provides an overview of the context and the legal framework relating to public procurement for the acquisition of goods or services, including construction.
  2. Chapter 2, Defining the Requirement and Requisition Receipt, is about defining the requirement for the bid solicitation. While this is often the responsibility of the client department, PWGSC involvement is still important.
  3. Chapter 3, Procurement Strategy, describes what the procurement strategy is. This determines how the request will be satisfied.
  4. Chapter 4, Solicitation Process, outlines the actual bid solicitation preparation and process. Most of the various methods of solicitation and items that need to be included in the bid solicitation are found in this chapter.
  5. Chapter 5, Evaluation and Selecting the Contractor, explains how to evaluate and select the contractor based on the solicitations.
  6. Chapter 6, Approvals and Authorities, provides the details of the approvals that need to be obtained before awarding a contract.
  7. Chapter 7, Award of Contracts and Issuance of Standing Offers and Supply Arrangements, relates to the award of contracts, issuance of standing offers and supply arrangements, debriefings, notification to unsuccessful bidders, and other matters surrounding contract award and the issuance of standing offers and supply arrangements.
  8. Chapter 8, Contract Management, offers information regarding contract management during the contract. Non-exhaustive examples of this information are contract performance, progress payments, subcontracting, warranty work, disputes, terminations and the Vendor Performance Corrective Measure Policy.
  9. Chapter 9, Special Procurements, details procurements where PWGSC has implemented special procedures applicable to identified commodities, clients or projects.
  10. Chapter 10, Cost and Profit, is generally used when a contract is to be awarded on a non-competitive basis for non-commercial goods or services, or in the case of a competitive process for such goods or services, only one compliant bid is received, so price negotiations with this bidder may be required.
  11. The Glossary includes words, concepts, titles, etc., used throughout the Manual.

1.5.5 Supply Manual Format

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  1. Each chapter refers to particular subjects by heading, and subsequent sub-heading numbers. Each chapter also commences with a Table of Contents and concludes with annexes specific to that chapter.
  2. Subjects are numbered as they appear in the chapters, i.e. 1.5.5 appears in Chapter 1 and 8.65.5 Release of Contract Financial Security appears in Chapter 8.
  3. Section and subsection numbering includes gaps to provide for future additions to the Supply Manual.

1.10 PWGSC Procurement Process

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There is one over-arching principle for all PWGSC procurement activities: Integrity. Subordinate to this are guiding principles, which provide the framework for PWGSC procurement process. Contracting officers must always respect these principles, regardless of whether or not the actions are clearly set out in this manual.

1.10.1 Integrity

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PWGSC procurement processes will be open, fair and honest.

1.10.5 Guiding Principles

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All those involved in the procurement process must apply prudence, probity and transparency at each stage of the process.

  1. Client Service
    PWGSC will make every reasonable effort to satisfy the operational requirements of its clients, while obtaining the best value in each procurement process.
  2. National Objectives
    PWGSC procurement activities will advance established government policies, within the limits imposed by international trade obligations.
  3. Competition
    PWGSC procurement will be competitive, with specific exceptions.
  4. Equal Treatment
    PWGSC will ensure that all potential bidders of a particular requirement are subject to the same conditions.
  5. Accountability
    PWGSC is accountable for the integrity of the contracting process. Clients are responsible for ensuring that all information relating to their requirements, which is provided to PWGSC, is complete and accurate. (See Annex 1.1: Matrix of Responsibilities between PWGSC and Client Departments for the Procurement of Goods and Services (Generic).)

1.10.10 Procurement best practices

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  1. Ensure Integrity
    Contracting officers must ensure the integrity of the procurement process. If there is any doubt that what is being done (or asked by the client to be done) might bring the integrity of the process into question, the contracting officer should consider suspending the procurement process until the issue is resolved. Issues that cannot be resolved satisfactorily at the contracting officer level must be referred to a higher authority within PWGSC.
  2. Get Involved Early
    The procurement process can be facilitated by advance work being done with clients. This includes helping with needs identification and requirement definition, procurement strategy development, and drafting of solicitation documents before a requisition is actually received. This can be accomplished through ongoing liaison with the client or a review of procurement patterns. These methods can be initiated by a client request for assistance, or by a more formal process of regular consultation.
  3. Consult with Peers
    Contracting officers should consult with colleagues, particularly when working with an unfamiliar situation, such as a new commodity. Their experience and advice may help to arrive at a sound decision. Referring to previous files can also be instructive, particularly for estimating things like business volume under a new contract where there is a current contract covering substantially the same activities.
  4. Liaise with the Client
    The contracting officer should keep clients informed and involved, and in order to develop responsive, creative and flexible procurement strategies, their departmental needs must be understood, as well as their specific technical requirement. When consulting the client, make the purpose plain, so that if there is a problem with a proposed approach a solution that achieves the purpose can be developed. The contracting officer must work with the client towards their operational objectives.
  5. Use Specialists
    The contracting officer should seek advice from the following specialists: Legal Services, policy advisors, Access to Information and Privacy officers, quality control officers, cost analysts and risk management advisors. Specialists are available to provide guidance and recommendations in their areas of expertise. The mandatory or discretionary use of cost and price analysis specialists is detailed in the Acquisitions Program Policy SuiteThe information is only accessible to federal government department and agency employees..
  6. Communicate Effectively
    Contracting officers should be very clear in communications. Written instructions accompanying each bid solicitation, for example, should be clear with no ambiguity, and be easily understood by all parties.
  7. Maintain Confidentiality
    The contracting officer must treat all information of a confidential or personal nature, including bid information, in a secure and confidential manner. This ensures the integrity of the contracting process, and protects the interests of suppliers and clients.
  8. Obtain Confirmation
    The contracting officer should obtain written confirmation of significant information, agreements and discussions, such as confirmation of an unusually low price, or extension of a bid validity period by the bidder.
  9. Select the Appropriate Contracting Method
    1. Depending on which commodity is being procured, the appropriate contracting method may be a standing offer, a supply arrangement, a government-wide or multi-departmental contract, or a normal contract. See 3.15 Non-competitive Contracting Process for details on the usage of the different methods.
    2. Some commodities are available via mandatory standing offers, and these must be used unless there is a valid reason to deviate.
  10. Commodity Knowledge
    Contracting officers should develop their understanding of their commodity's industry, the market conditions, and the pertinent factors of each commodity, which then affects the choices made by contracting officers in determining, for example, such things as the basis of payment and the selection methodology. Clients should also use their understanding of the commodity when defining their technical requirements and scope.
    Contracting officers should also keep themselves informed about such things as the proposed contractor's performance history, financial situation and practices, before recommending a contract award. It also means keeping up to date with a contractor during the performance of a contract.
  11. Life Cycle Management of Assets
    Life Cycle Management of Assets (LCMA) is an integrated approach to materiel management that looks at the process as a complete system rather than separate activities. While this process is primarily the responsibility of materiel managers within client departments, procurement and disposal are a part of this process so contracting officers should discuss with the client the implications of the life cycle management process for each procurement.
  12. Maintain Records
    Contracting officers should keep files up to date for reasons of good management, access to information requests as well as for audit purposes. Current files should be kept up to date for anyone who may have to consult the file or assume responsibility for it at a later date. See Annex 8.1: Guidelines on File Organization and Make-up for further details.
  13. Use Standard Documents
    For every solicitation process (with the exception of construction and architecture and engineering services), whether for competitive or non-competitive requirements, contracting officers must only use the departmental standard procurement templates and the clauses of the Standard Acquisition Clauses and Conditions (SACC) Manual. Contracting officers should obtain from their supervisor the most current standard documents that have been developed in accordance with these templates within their respective areas. Directorates requiring assistance in developing documents based on these templates should contact the Procurement Policy and Tools Division of the Policy, Risk, Integrity and Strategic Management Sector by e-mail at outilsapprov.proctools@tpsgc-pwgsc.gc.ca. For more information, see section 4.15.1 Departmental Standard Procurement Templates.

1.15 The Legal Framework of Contracting

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The legal framework is comprised of:

  1. statutes and regulations;
  2. agreements;
  3. policies, directives, procedures and guidelines; and,
  4. challenge process.

See sections 1.20 Statutes and Regulations to 1.35 Challenge Process for a description.

1.20 Statutes and Regulations

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  1. PWGSC procurement activities are principally carried out pursuant to the following major statutes:
    1. Department of Public Works and Government Services Act;
    2. Financial Administration Act and the Government Contracts Regulations;
    3. Defence Production Act;
    4. Federal Accountability Act;
    5. Government Contracts Regulations.
  2. No legal interpretation should be attempted on the basis of the following sections which summarize the acts. An electronic copy of the acts may be viewed on the Department of Justice Web site.

1.20.1 Department of Public Works and Government Services Act

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  1. The Department of Public Works and Government Services Act came into force on July 12, 1996, to give legislative sanction to the amalgamation of the former department of Public Works and the former Department of Supply and Services together with the Translation Bureau and the Telecommunication Services for government. The legal name of the Department is "Department of Public Works and Government Services"; while "Public Works and Government Services Canada" or " PWGSC" is the common usage name. The legal name of the Department must be used for the preparation and execution of legal documents.
  2. The Act:
    1. constitutes the Department;
    2. provides for the appointment of a minister who has the management and direction of the Department;
    3. provides for the appointment of a deputy minister as deputy head of the Department;
    4. provides that the Minister is the Receiver General for Canada and the Deputy Minister is the Deputy Receiver General;
    5. sets out the powers, duties and functions of the Minister which extends to and includes all matters over which Parliament has jurisdiction, not by law assigned to any other department, board or agency of the Government of Canada.
  3. Sections 6 and 7 outline in detail the powers, duties and functions of the Minister. With respect to acquisitions, the following services are specifically identified in Section 6:
    1. acquisition and provision of articles, supplies, machinery, equipment and other materiel for departments;
    2. acquisition and provision of services for departments;
    3. planning and organizing of the provision of materiel and services required by departments;
    4. acquisition and provision of printing and publishing services for departments; and
    5. construction, maintenance and repair of public works, federal real property and federal immovable.
  4. Section 8 allows the Minister to delegate any of the Minister's powers, duties or functions under the Act to an appropriate minister, within the meaning of the Financial Administration Act, for any period and under any terms and conditions that the Minister considers suitable. Section 8 also provides the Minister of PWGSC with the power to authorize other Ministers, to whom he or she has delegated powers under the Act, to sub delegate those powers to the "chief executive" of the relevant department. Subsection 8(3) empowers a minister receiving the authority to sub-delegate to the officials who are in charge of the departments in that minister's portfolio and subsection 8(4) empowers those officials in turn, to sub-delegate to departmental officials under their jurisdiction.
  5. Section 9 gives the Minister the exclusive authority for the acquisition of goods. All ministers have inherent power to contract; however, the authority given to the Minister in section 9 supplants the authority of each department to contract for goods. That authority may be restored to the extent determined by the Minister of PWGSC through a delegation, in accordance with section 8, from the Minister of PWGSC to the Minister responsible. Departments may enter into contracts for services under their own authorities, up to the limits contained in Appendix C - Treasury Board Contracts Directive; however, they may still choose to have these contracts for services done by PWGSC.
  6. Section 16 empowers the "Minister to do anything for or on behalf of:
    1. any department, board or agency of the Government of Canada or Crown Corporation, or
    2. with the approval of the Governor in Council, any government, body or person in Canada or elsewhere that requests the Minister to do that thing, where the Minister is authorized to do that thing under this or any other Act of Parliament for or on behalf of any department, board or agency of the Government of Canada."
  7. Sections 20 and 21 provide the necessary contracting powers of the Minister, including the power to fix terms and conditions of contracts, and instructions, terms and conditions with respect to other documents relating to contracts and their formation. Section 22 gives the Minister the power to incorporate contractual clauses by reference.

1.20.5 Financial Administration Act and the Government Contracts Regulations

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  1. The Financial Administration Act provides the legal framework for the collection and expenditure of public funds, including the contracting practices of PWGSC and its clients. Sections 32, 33, 34, 37, 40 and 41 are of direct interest to contracting officers.
  2. Section 32 provides that no contract providing for a payment can be entered into unless there is sufficient funding available to discharge any debt that under the contract will be incurred during the fiscal year in which the contract is entered into. Section 33 requires that no charge can be made against an appropriation except on the requisition of the appropriate Minister of the department for which the appropriation was made or of a person authorized in writing by that Minister.
  3. Pursuant to section 34, no payment can be made unless the deputy of the appropriate Minister, or another person authorized by the Minister certifies, in the case of a payment for the performance of work, the supply of goods or the rendering of services, that the work has been performed, the goods supplied or the service rendered and that the price charged is in accordance with the contract, or if not specified in the contract, is reasonable. Under 1.20(a) (ii), payment may be made before completion of the work (i.e. advance or progress payment) but only if such payment is in accordance with the contract.
  4. Sections 37 and 37.1 provide that any unexpended portion of an appropriation lapses at the end of the fiscal year, except that a debt incurred for work performed, goods received or services rendered before the end of the fiscal year must be recorded as an expenditure against the appropriation, even though payment is made during the following fiscal year.
  5. Section 40 provides that it is a term of every contract providing for the payment of any money by Her Majesty under that contract is subject to there being an appropriation for the particular service for the fiscal year in which any commitment under that contract would come in course of payment.
  6. Section 41 provides for regulations with respect to the conditions under which contracts may be entered into.
  7. Sections 61 and 62 restrict the transfer, lease or loan of public property and require each department to maintain adequate records of its public property. However, pursuant to the Public Property Loan Regulations, (SOR/92-745), section 61 permits ministers to loan public property, subject to certain conditions.
  8. Sections 66 to 71 describe conditions under which Crown debts may be assigned, and the procedure to follow.
  9. Contracting officers should be familiar with the Government Contracts Regulations (GCR). Part I of the GCRs deals with conditions of contract entry. Section 4 provides that contracts for legal services are only entered into by the Minister of Justice. Section 5 sets out the requirement for soliciting bids and section 6 specifies conditions under which bids need not be solicited. Section 8 and 9 authorize advance payments and progress payments. Part II deals with bid and contract security.

1.20.10 Defence Production Act

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  1. The Defence Production Act (DPA) gives the Minister of PWGSC the responsibility to administer the DPA and the exclusive authority to buy or otherwise acquire defence supplies and construct defence projects required by the Department of National Defence, subject to exceptions listed at subsection 10(2) of the DPA. All PWGSC contracts for defence supplies or projects are governed by the provisions of the DPA.
  2. The DPA includes the following three parts: (1) Procurement of Defence Supplies; (2) Regulations of Access to Controlled Goods; and (3) Offence and Punishment.
  3. In Part 1, section 11 permits the Minister, if authorized by the Governor in Council, to do or undertake, on behalf of an associated government, any act or thing that the Minister is empowered to do or undertake under the Act. Sections 12 to 15 deal with the Minister's mandate to organize and control the Canadian defence industry. Section 16 provides wide powers to the Minister with respect to the procurement, production or disposal of defence supplies or defence projects. Sections 21 to 25 deal with the administration of defence contracts.
  4. Part 2 deals with the regulation of access to controlled goods, including requirements for registration, offences and prohibitions. Part 3 defines offences, continuing offence and factors to consider when sentencing.

1.20.15 Federal Accountability Act

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  1. The Federal Accountability Act (FedAA) was granted Royal Assent on December 12, 2006. The Act provides for conflict of interest rules, measures respecting administrative transparency, oversight and accountability. The Act enacts two new acts (the Conflict of Interest Act and the Director of Public Prosecutions Act) and makes a series of amendments to existing legislation such as the Parliament of Canada Act, the Lobbying Act, the Financial Administration Act, the Criminal Code and the Department of Public Works and Government Services Act.
  2. The FedAA also amends the Department of Public Works and Government Services Act to provide for the appointment and mandate of a Procurement Ombudsman. See 1.35.5 Procurement Ombudsman for more details.

1.20.20 Other Acts

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In addition to the above statutes, examples of other acts which also apply to contracting for goods and services are as follows:

  1. Conflict of Interest Act;
  2. Access to Information Act;
  3. Privacy Act;
  4. Official Languages Act;
  5. Lobbying Act;
  6. Criminal Code;
  7. Competition Act;
  8. Department of Justice Act;
  9. Bankruptcy and Insolvency Act.

1.25 Agreements

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1.25.1 International and national trade agreements

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  1. Canada is a party to several international trade agreements (ITAs) which include obligations aimed at reducing trade barriers between the parties in the area of government procurement: As well, Canada is a party to the Canadian Free Trade Agreement (CFTA) with the provinces and territories.
  2. The Canadian International Trade Tribunal is the mechanism by which Canada enforces the implementation of the procurement obligations in these trade agreements.
  3. The procurement provisions of all trade agreements are similarly structured in that if a proposed contract meets certain criteria it is covered by the agreement; if it does not meet all the stated criteria then it is not covered. A proposed contract can be, and often is, covered by more than one agreement.
  4. Coverage Under Multiple Agreements
    For all trade agreements, PWGSC is required to comply with specific procedures when completing certain procurements. Therefore a decision must be made as to whether or not the requisition is subject to a particular agreement, or a combination of agreements. To determine coverage under the various trade agreements, the estimated procurement value (including the estimated amount of the Goods and Services Tax or the Harmonized Sales Tax), the client, the type of good(s) or service(s) or construction, and any exceptions or exclusions must be reviewed. Contracting officers should note that when the procurement is covered by more than one agreement, all agreements must be complied with at the same time. In order to accomplish this, the procedures to be followed are the procedures that are considered the most rigorous. For example, for limited tendering reasons, procurements covered by NAFTA, CETA, WTO-AGP and CFTA, only the limited tendering reasons that are common to all four agreements are available as options.
  5. For assistance with the application of the trade agreements, contracting officers may contact the Trade Agreement Unit of the Strategic Policy Sector at tpsgc.paaccordscommerciaux-aptradeagreements.pwgsc@tpsgc-pwgsc.gc.ca.

1.25.5 North American Free Trade Agreement (NAFTA)

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  1. The North American Free Trade Agreement Implementation Act (S.C. 1993, c. 44) sets out Canada's commitment to reduce trade barriers between Canada, the United States of America and the Federal Republic of Mexico. Chapter 10 of the Agreement focuses on achieving greater competition for, and transparency in, government procurement, eliminating the protection of domestic products or suppliers or discrimination among foreign products or suppliers. The "National Treatment" clause and the "Non-discrimination" clause are similar as those found in the WTO-AGP.
  2. The use of measures to improve socioeconomic development (offsets) for procurements covered by NAFTA is prohibited. See Article 1006: Prohibition of Offsets. Note that set-asides for minority businesses are permitted as described in paragraph e.v. below.
  3. To determine whether NAFTA is applicable, the agreement (Chapter 10) must be consulted. In the following sections on determining NAFTA coverage, all references to an "Annex" are to the annexes of Chapter 10 of NAFTA.
  4. For purposes of determining coverage, a requisition is considered to be one for:
    1. goods;
    2. services; or
    3. construction services;
    based on the one that represents more than 50 percent of the estimated value of the requisition.
  5. To determine if a procurement is to be carried out in accordance with NAFTA procedural obligations, refer to the following:
    1. Determine the value of the requisition. See Article 1001: Scope and Coverage and Article 1002: Valuation of Contracts of NAFTA. The thresholds in NAFTA are presented in U.S. dollars. The values in Canadian dollars are based upon conversion factors, as agreed upon in the Agreement, and are revised every two years. They are published in Treasury Board Contracting Policy Notice 2017-6. The conversions below are in effect until December 31, 2019.
    2. A procurement may be subject to NAFTA procedural obligations if the requisition value in Canadian dollars (including taxes), is equal to or greater than the following thresholds:
      1. for goods being procured by departments and agencies (including some Commissions and Boards): $32,900;
      2. for services being procured by departments and agencies: $100,000* (*Although the NAFTA services threshold is $106,000, as the Canada-Korea Free Trade Agreement provides the lowest threshold for services at $100,000, NAFTA procedural obligations are to be applied to all covered services procurements valued at or above $100,000);
      3. for construction services being procured by departments and agencies: $13,700,000.
    3. Determine the coverage by client. See Annex 1001.1a-1 Federal Government Entities and Annex 1001.1a-2 Government Enterprises.
    4. Determine the coverage by type of requirement:
      1. goods – See Annex 1001.1b-1 Goods; or
      2. services – See Annex 1001.1b-2 Services; or
      3. construction services – See Annex 1001.1b-3 Construction Services.
    5. Determine if an exception, such as the one for national security, should be invoked for the requirement. Article 1018: Exceptions provides the complete list of exceptions. See Supply Manual section 3.105 National Security Exceptions for more information on National Security Exceptions.
    6. Determine if the requirement is excluded from the Agreement. Annex 1001.2b General Notes provides the complete list of types of requirements that are excluded from NAFTA, for example, paragraph 1.(d) provides for set-asides for minority businesses. Therefore, procurements that are set aside (i.e. reserved) for either CLCA beneficiaries, or for aboriginal businesses under the Procurement Strategy for Aboriginal Business (PSAB), are excluded from the Agreement, making the obligations of NAFTA) no longer applicable. For more information on when procurements can be reserved for CLCA beneficiaries, see 9.35 Comprehensive Land Claims Agreements (CLCAs). For more information on PSAB, see 9.40 Procurement Strategy for Aboriginal Business.

1.25.10 World Trade Organization Agreement on Government Procurement (WTO-AGP)

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  1. World Trade Organization Agreement on Government Procurement (WTO-AGP) is an agreement, which aims to secure greater international competition for government procurement. It provides procurement procedures, which Canada abided to.
  2. The Agreement also contains provisions of national treatment and non-discrimination that Canada must respect (Article III). National treatment means that
    "…each Party shall provide immediately and unconditionally to the products, services and suppliers of other Parties offering products or services of the Parties, treatment no less favorable than:
    1. that accorded to domestic products, services and suppliers; and
    2. that accorded to products, services and suppliers of any other Party."
  3. Non-discrimination means that
    "…each Party shall ensure:
    1. that its entities shall not treat a locally-established supplier less favorably than another locally-established supplier on the basis of degree of foreign affiliation or ownership; and
    2. that its entities shall not discriminate against locally-established suppliers on the basis of the country of production of the good or service being supplied, provided that the country of production is a Party to the Agreement in accordance with the provisions of Article IV."
  4. The use of measures to improve socioeconomic development (offsets) for procurements covered by WTO-AGP is generally prohibited. See Article IV: General Principles. Note that set-asides for minority businesses are permitted as described in paragraph h.vi. below.
  5. To fully determine whether the WTO-AGP is applicable, the Agreement must be consulted. In the following Sections on determining WTO-AGP coverage, all references to an "Annex" are to the annexes to the WTO-AGP.
  6. Each Party to the WTO-AGP has an Appendix, which includes five Annexes defining the coverage of that Party's obligations.
  7. A procurement is covered by the WTO-AGP if:
    1. its value is equal to or greater than the relevant threshold;
    2. if the type of requirement (e.g. plumbing supplies) is covered;
    3. if the entity for which the procurement is being done is covered, and
    4. if there is no specific exception applicable (e.g. shipbuilding) or invoked (e.g. national security). All four criteria must be met in order for the procurement to be covered by the WTO-AGP. See below for how to determine if these criteria are met.
  8. To determine if a procurement is subject to the WTO-AGP, refer to the following:
    1. Determine the value of the requisition. See Article II: Scope and Coverage of WTO-AGP. The thresholds in the WTO-AGP are presented in the Special Drawing Rights, the unit of account of the International Monetary Fund. The thresholds are converted to Canadian dollars and published in Treasury Board Contracting Policy Notice 2017-6, which is reviewed every two years. A procurement may be subject to WTO-AGP if the requisition value in Canadian dollars (including taxes) is equal to or greater than the following thresholds for the period January 1, 2018, to December 31, 2019:
      1. For goods and services being procured by a federal government entity: $237,700; and
      2. For construction services being procured by federal government entities: $9,100,000.
    2. Determine whether the client department is covered by determining if they are listed in Canada's Annex 1 Central Government Entities or
    3. Determine the coverage by the client. See Annex 1 Central Government Entities.
    4. Determine the coverage by type of requirement:
      1. goods – See Annex 1 Central Government Entities and Annex 4 Goods, or
      2. services – See Annex 1 Central Government Entities and Annex 5 Services. The WTO-AGP identifies services coverage, according to the United Nations Central Product Classification system of classification.
      3. construction services – See Annex 1 Central Government Entities and Annex 6 Construction Services.
    5. Determine if an exception, such as the one for national security, should be invoked for the requirement. Article III: Security and General Exceptions provides the complete list of exceptions. See Supply Manual section 3.105 National Security Exceptions for more information on National Security Exceptions.
    6. Determine if the requirement is excluded from the Agreement. Canada’s General Notes in Annex 7 provide the complete list of types of requirements that are excluded from WTO-AGP, for example, Article 1.(d) provides for set-asides for minority businesses. Therefore, procurements that are set aside (i.e. reserved) for either CLCA beneficiaries, or for aboriginal businesses under the Procurement Strategy for Aboriginal Business (PSAB), are excluded from the Agreement, making the obligations of the WTO-AGP no longer applicable. For more information on when procurements can be reserved for CLCA beneficiaries, see 9.35 Comprehensive Land Claims Agreements (CLCAs). For more information on PSAB, see 9.40 Procurement Strategy for Aboriginal Business.

1.25.11 Canada-European Union Comprehensive Economic and Trade Agreement (CETA)

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  1. The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is an agreement, which aims to build on the WTO-AGP and secure greater market access opportunities for Canadian suppliers. Chapter 19 of CETA sets out the procedural rules and market access commitments that both Canada and EU members must abide by.
    1. The format and obligations, including the "non-discrimination" and "national treatment" clauses as set out in CETA, are similar to that of the WTO-AGP, to which Canada and the EU are both party.
  2. CETA does not contain an exception for small and minority owned businesses set asides; however, it contains an exception for any measures adopted or maintained with respect to Aboriginal peoples, including set asides for Aboriginal businesses, as described in paragraph f.vi below.
  3. To determine whether CETA is applicable, the Agreement (Chapter 19) must be consulted. In the following sections on determining CETA coverage, all references to an "Annex" are to the annexes of CETA Chapter 19.
  4. Each Party to CETA has an Appendix, which includes eight annexes defining the coverage of that Party's obligations.
  5. A procurement is covered by CETA if:
    1. its value is equal to or greater than the relevant threshold;
    2. if the type of requirement (e.g. plumbing supplies) is covered;
    3. if the entity for which the procurement is being done is covered, and
    4. if there is no specific exception applicable (e.g. shipbuilding) or invoked (e.g. national security).
    All four criteria must be met in order for the procurement to be covered by CETA. See below for how to determine if these criteria are met.
  6. To determine if a procurement is subject to CETA, refer to the following:
    1. Determine the value of the requisition. See Article 19.2: Scope and Coverage in Chapter 19, which includes the valuation of contracts (Articles 19.2.6-19.2.8). The thresholds in CETA are expressed in Special Drawing Rights, the unit of account of the International Monetary Fund. The thresholds are converted to Canadian dollars and published in Treasury Board Contracting Policy Notice 2017-6, which is reviewed every two years. A procurement may be subject to CETA, if the requisition value in Canadian dollars (including taxes) is equal to or greater than the following thresholds (valid until December 31, 2019):
      1. For goods and services being procured by a federal government entity, including departments, and some Commissions and Boards: $237,700;
      2. For construction services for federal government entities: $9,100,000.
    2. Determine whether the client department is covered by determining if they are listed in Canada's Annex 19-1 Central Government Entities or Annex 19-3: Other Entities.
    3. Determine the coverage by type of requirement:
      1. Goods: Annex 19-4: All goods are covered, with exceptions for DND, the RCMP, the Department of Fisheries and Oceans for the Canadian Coast Guard, and the Canadian Air Transport Security Authority;
      2. Services: Annex 19-5: Only those services listed are covered. CETA identifies services coverage, according to the United Nations Central Product Classification (CPC) system of classification; or
      3. Construction Services: Annex 19-6: All construction services are covered. Note that dredging services are covered by CETA (as described in paragraph v. below).
    4. Determine if an exception, such as the one for national security, should be invoked for the requirement. Article 19.3: Security and General Exceptions provides the complete list of exceptions. See Supply Manual, section 3.105 National Security Exceptions for more information on National Security Exceptions.
    5. For central government entities in Annex 19-1, this Annex includes dredging services subject to the following requirements where the estimated value of the procurement is $8,500,000 or more:
      1. the vessel or other floating plant equipment used in the supply of the dredging services:
        1. is of Canadian or European Union make or manufacture; or
        2. has been predominantly modified in Canada or the European Union and has been owned by a person located in Canada or the European Union for at least a year prior to the submission of the tender by the bidder; and
      2. the vessel must be registered in:
        1. Canada; or
        2. a Member State of the European Union and have been granted a temporary licence under the Coasting Trade Act, S.C. 1992, c. 31. The temporary licence will be granted to the European Union vessel, subject to applicable non-discretionary requirements. The requirement that a temporary licence will only be issued if there is no Canadian duty or non-duty paid vessel available will not be applied to the application for that temporary licence.
    6. Determine if the requirement is excluded from the Agreement. Canada's General Notes in Annex 19-7 provides the complete list of types of requirements that are excluded from CETA, for example, paragraph 2(a) provides that the Chapter does not apply to set asides for aboriginal businesses. Therefore, procurements that are set aside (i.e. reserved) for either CLCA beneficiaries, or for Aboriginal businesses under the Procurement Strategy for Aboriginal Business (PSAB), are excluded from the Agreement, making the obligations of CETA no longer applicable. For more information on when procurements can be reserved for CLCA beneficiaries, see 9.35 Comprehensive Land Claims Agreements (CLCAs). For more information on PSAB, see 9.40 Procurement Strategy for Aboriginal Business.

1.25.14 Canadian Free Trade Agreement (CFTA)

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  1. The Canadian Free Trade Agreement (CFTA) is a comprehensive agreement on Canadian internal trade which commits governments to a comprehensive set of rules that will help to achieve a modern and competitive economic union for all Canadians.
  2. The CFTA replaced the Agreement on Internal Trade (AIT) on July 1, 2017. The CFTA applies only to procurements commenced on or after July 1, 2017. The AIT continues to apply to procurements commenced before July 1, 2017, until those procurements are complete. The procurement process commences after an entity has decided on its requirement.
  3. Chapter Five – Government Procurement of the CFTA is intended to "establish a transparent and efficient framework to ensure fair and open access to government procurement opportunities for all Canadian suppliers”.
  4. In the following sections on determining CFTA coverage, all references to an "Annex" are to the annexes to Chapter Five - Government Procurement of the CFTA.
  5. If all of the following CFTA criteria are met, the procurement is subject to this agreement:
    1. Determine the value of the requisition. See Article 504: Scope and Coverage, Annex 505: Valuation, and Annex 504.4: Inflation Adjustment. The thresholds of the CFTA are adjusted for inflation every two years. The current thresholds are published in Treasury Board Contracting Policy Notice 2017-6. The thresholds below are in effect until December 31, 2019.
    2. A procurement may be subject to the CFTA if the requisition value in Canadian dollars (including taxes) is:
      1. $25,300 or greater for goods, if the largest portion of the procurement is for goods;
      2. $101,100 or greater for services, excluding construction, if the largest portion of the procurement is for services; or
      3. $101,100 or greater in the case of construction.
    3. Determine the coverage by client. All federal departments, agencies and Crown corporations are subject to the CFTA procurement procedures, except those listed in the Schedule of Canada in Annex 520.1 Party-Specific Exceptions.
    4. Determine the coverage by the type of requirement. All goods, services, and construction services are covered by the CFTA Procurement Chapter unless specified in the Schedule of Canada in Annex 520.1: Party-Specific Exceptions.
    5. Determine if a general exception applies. See Article 504: Scope and Coverage and Chapter 8: General Exceptions.
  6. Under Article 800: Aboriginal Peoples, the CFTA does not apply to any measure adopted or maintained by a Party with respect to Aboriginal peoples.
    1. There are two ways in which Comprehensive Land Claims Agreements (CLCAs) and the CFTA interact:
      1. If a procurement is reserved for CLCA beneficiaries because of a right of first refusal under that CLCA, then the contracting authority must indicate in the solicitation document and any tender notice that the procurement is set aside from the CFTA. In this case, the entire procurement process is not subject to CFTA, and the procurement no longer falls under the jurisdiction of the Canadian International Trade Tribunal (CITT). This situation does not eliminate the requirement to comply with the Government Contracts Regulations. For more information on CLCAs, see 9.35 Comprehensive Land Claims Agreements (CLCAs).
      2. For a procurement that is subject to the CFTA but not to any international trade agreements, any measure for Aboriginal peoples, including CLCA evaluation criteria, is not subject to CITT review, although the rest of the procurement process, unless set aside for Aboriginal business, must be conducted in compliance with the CFTA provisions and is reviewable by the CITT.
    2. When the procurement has been set aside for Aboriginal business under the Procurement Strategy for Aboriginal Business (PSAB), the entire procurement process is not subject to CFTA and the procurement no longer falls under the jurisdiction of the CITT. For more information on PSAB, see 9.40 Procurement Strategy for Aboriginal Business.

1.25.15 Agreement on Internal Trade (AIT)

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The Agreement on Internal Trade (AIT) was replaced with the Canadian Free Trade Agreement (CFTA) on July 1, 2017. The CFTA applies to procurements commenced on or after July 1, 2017. The AIT will continue to apply after July 1, 2017 to any procurement commenced before that date, until those procurements are complete. The procurement process commences after an entity has decided on its requirement. For questions on the application or obligations of the AIT, contracting officers may contact the Trade Agreement Unit of the Strategic Policy Sector at tpsgc.paaccordscommerciaux-aptradeagreements.pwgsc@tpsgc-pwgsc.gc.ca.

1.25.16 Bilateral Free Trade Agreements

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  1. It is a government priority to expand Canada's trade by negotiating a number of bilateral trade agreements.
  2. The Canada-Korea Free Trade Agreement provides the lowest threshold for services at $100,000. As such, NAFTA procedural obligations are to be applied to all covered services procurements valued at or above $100,000. When NAFTA procedural obligations are applied, the obligations of the Canada-Korea FTA will also be met.
  3. In general, the Supply Manual refers only to NAFTA and the WTO-AGP, as procedural requirements of the other international trade agreements will be fulfilled following compliance to the procedural requirements of NAFTA and the WTO-AGP.

1.25.20 Comprehensive Land Claims Agreements

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  1. The federal government, represented by Aboriginal Affairs and Northern Development Canada (AANDC), has negotiated a number of Comprehensive Land Claims Agreements (CLCAs) with Aboriginal peoples. CLCAs are modern treaties that are based on the concept of continued Aboriginal rights and title to lands traditionally used and occupied by an Aboriginal group, which have not been dealt with by treaty or other legal means.
  2. CLCAs are law. The CLCA obligations are legally binding because they are contained in agreements signed by Canada and backed by legislation. Furthermore, the Aboriginal rights detailed within them are constitutionally protected under Section 35 of the Constitution Act 1982.
  3. Most CLCAs include measures dealing with procurement, and although these measures are not always identical in the various agreements, they are all aimed at enhancing economic opportunities of the Aboriginal group benefiting from the agreement, usually through increased possibilities of competing successfully for contracts in their settlement areas or of participating in employment, training or subcontracting opportunities.
  4. To determine whether CLCAs apply to a procurement, and to learn how to address the CLCA obligations during the procurement process, refer to 9.35 Comprehensive Land Claims Agreements (CLCAs).

1.25.25 Other Agreements

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Contracting officers should also be aware that a number of National Park Agreements and Department of National Defence Co-operation Agreements have been signed between individual departments and certain aboriginal groups. Reference to these agreements can be found in sections 7 to 10 of Treasury Board Secretariat Contracting Policy Notice 1997-8.

1.30 Policies, Directives and Guidelines

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1.30.1 Treasury Board

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  1. The Treasury Board (TB) is a Cabinet committee of the Queen's Privy Council of Canada. TB is responsible for accountability and ethics, financial, personnel and administrative management, comptrollership, approving regulations and most orders-in-council.
  2. As the administrative arm of TB, the Treasury Board of Canada Secretariat (TBS) has a dual mandate to support TB as a committee of ministers and to fulfill the statutory responsibilities of a central government agency. TBS provides advice and support to TB ministers in their role of ensuring value-for-money and provides oversight of the financial management functions in departments and agencies. TBS makes recommendations and provides advice to the TB on policies, directives, regulations, and program expenditure proposals with respect to the management of the government's resources.

1.30.5 Treasury Board Contracting Policy

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The Treasury Board Contracting Policy, established under s. 7(1) of the Financial Administration Act (FAA), sets out the policy objective for government contracting as being that to acquire goods and services and to carry out construction in a manner that enhances access, competition and fairness and results in best value or, if appropriate, the optimal balance of overall benefits to Canada and the Canadian people.

It provides that government contracting must be conducted in a manner that will:

  1. Stand the test of public scrutiny in matters of prudence and honesty, facilitate access, encourage competition and reflect fairness in the spending of public funds;
  2. Ensure the pre-eminence of operational requirements;
  3. Support long-term industrial and regional development and other appropriate national objectives, including aboriginal economic development; and
  4. Comply with the government's obligations under Canada's trade agreements.

1.30.10 Treasury Board Common Services Policy

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The objective of the Common Services Policy is to ensure that departments and agencies can acquire responsive, cost-effective support for their program delivery. It further provides that client service organizations will offer services to client departments in a manner that is most supportive of timely, effective and economical delivery of programs to the public. PWGSC is identified both as a provider of mandatory common services under Appendix E - Mandatory Services of the policy, and of optional common services under Appendix F - Optional Services of the policy.

1.30.15 Treasury Board Contracts Directive

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The Appendix C - Treasury Board Contracts Directive, issued pursuant to section 10 and paragraph 41(1)(a) of the FAA, sets basic contracting limits for contracting authorities, and provides specific contracting limits for specific ministers. The TB Contracts Directive sets out the limits above which departments must obtain TB approval. The application of the Directive to PWGSC is set out in Chapter 6 Approvals and Authorities.

1.30.20 Treasury Board Procurement Review Policy

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The objective of the Procurement Review Policy is to enhance the use of procurement in support of industrial and regional development and other national objectives in a manner that is fully consistent with the government's approved procurement objectives, and with Canada's international commitments within the General Agreement on Tariffs and Trade, NAFTA or other trade rights and obligations. See 3.70 Procurement Review for further details.

1.30.25 Code of Conduct for Procurement

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The Code of Conduct for Procurement consolidates the government's existing legal, regulatory and policy requirements into a concise and transparent statement of the expectations that the government has of its employees and its suppliers. It ensures that public servants and suppliers are working from the same statement of expectations and commitments that clearly outline what is acceptable conduct when contracting with the government. The Code applies to all procurements done by Public Works and Government Services Canada (PWGSC) (for PWGSC and/or on behalf of client departments) and it requires that PWGSC abide by the legislation and policies outlined in the Code. It is a single point of reference to key responsibilities and obligations of public servants and suppliers.

1.35 Challenge Process

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1.35.1 Canadian International Trade Tribunal

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  1. The trade agreements require that each party have a bid challenge mechanism in place. Canada’s bid challenge authority is the Canadian International Trade Tribunal (CITT). The Tribunal decides whether the federal government breached its obligations under certain trade agreements to which Canada is party. Where the trade agreements apply, a potential supplier may file a complaint concerning a procurement action to the CITT, on the grounds that any aspect of the procurement process relating to a requirement covered by these agreements is unfair or discriminatory. Under the CFTA, Canadian provinces and territories must also establish or designate an independent administrative or judicial authority to receive and review bid challenges.
  2. CITT is authorized to receive complaints pertaining to any aspect of the procurement process up to and including contract award, and also to conduct inquiries and make determinations. In dealing with a complaint, CITT must determine whether the government institution responsible for the procurement under review has complied with the requirements of the trade agreements and such other procedural requirements, as prescribed in the Canadian International Trade Tribunal Procurement Inquiry Regulations.
  3. Contracting officers may contact the PWGSC CITT expert advisor, either by telephone at 819-420-2069 or by email at TPSGC.BCRPA-CAPRO.PWGSC@tpsgc-pwgsc.gc.ca, for assistance with respect to an actual or potential CITT action. Contracting officers should encourage suppliers to resolve issues directly with PWGSC before making a complaint to the CITT. Any matter brought to the attention of the contracting officer should be handled with a minimum of delay, while exercising due care and judgment. Experience demonstrates that there are often minor errors, omissions, or other inadvertent actions, which can quickly be clarified or corrected to the satisfaction of all concerned, thus removing the basis of many problems and concerns at the outset.
  4. All PWGSC actions in response to a complaint filed with the CITT are coordinated through the PWGSC Coordination of Acquisitions Program Response Office. All requests, decisions, reports, letters, etc, to the CITT will be coordinated by CAPRO in consultation with Legal Services and the procurement organization. The procurement organization is responsible for preparing a chronology of events that will form the "backbone" of the Government Institution Report (GIR). Legal Services will produce the remaining sections, with input from the procurement organization, other departmental specialists, and the client department, as required. The procurement organization's management remains responsible to review and approve the GIR, before the sign-off.
  5. Contracting officers must ensure that complete documentation and records dealing with the complaint, including a dated record of all communications with suppliers, are maintained in order to substantiate that the procurement process was carried out in accordance with the obligations of the trade agreements. Throughout the complaint process, PWGSC will keep the client informed of actions taken in response to the complaint, as well as any notices, decisions, information, etc. received from the CITT.
  6. The Assistant Deputy Minister, Acquisitions Branch, is the signing authority for requests for the rescission of Postponement of Award Orders.
  7. Details about the CITT, including its complaint and inquiry process, are in the publication Procurement Review Process: A Descriptive Guide. The CITT Determinations, Notices and Orders can also be viewed on the CITT Web site.

1.35.5 Procurement Ombudsman

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  1. Sections 306 and 307 of the Federal Accountability Act (FedAA) amend the Department of Public Works and Government Services Act to provide for the appointment and mandate of a procurement ombudsman. The Procurement Ombudsman has four primary functions, which are to:
    1. review the practices of departments for acquiring materiel and services to assess their fairness, openness and transparency and make any appropriate recommendations to the relevant department for the improvement of those practices;
    2. review any complaint respecting the award of a contract below the value of $25,300 for goods and below the value of $101,100 for services;
    3. review any complaint respecting the administration of a contract for the acquisition of materiel or services by a department, regardless of dollar value;
    4. ensure that an alternative dispute resolution process is provided, if both parties agree to participate;
    5. a possible fifth function is that the Federal Accountability Act also specifies that the Procurement Ombudsman can also perform any other duty or function respecting the practices of departments for acquiring materiel and services that may be assigned to the Procurement Ombudsman by order of the Governor in Council or the Minister of Public Works and Government Services Canada.
  2. The Office of the Procurement Ombudsman (OPO) performs its duties and functions as set out in the Procurement Ombudsman Regulations.
  3. The role of coordinating supplier complaints to OPO as well as OPO reviews of those procurement practices performed by Acquisitions Branch on behalf of clients has been assigned to the Coordination of Acquisitions Program Response Office.
  4. For assistance with respect to OPO related activities or potential complaints, contracting officers may contact the PWGSC Coordination of Acquisitions Program Response Office, by telephone at 819-420-2069 or by email at TPSGC.BCRPA-CAPRO.PWGSC@tpsgc-pwgsc.gc.ca.

1.40 Departmental Delegation of Authority

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1.40.1 Use of Judgment and Knowledge

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  1. The individual requirements of a particular procurement may suggest that a course of action other than one set out in this Manual should be followed. Wherever there is no instruction on a particular subject, contracting officers must use their judgement and knowledge following the guiding principles at subsection 1.10.5 Guiding Principles.
  2. PWGSC may be required to defend publicly a contracting officer's actions, and the contracting officer will be required to substantiate those actions. In the event that there is a need to deviate from an established policy or procedure, the process to be followed can only be presented in general terms:
    1. Any deviation must be identified in advance and must be carefully assessed and justified (including the reason for the deviation and the consequences of not deviating) for approval by the director general.
    2. The director general must determine whether more senior officials must become involved in the decision to deviate.

1.40.5 Contract Approval and Signing Authorities

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Contracting officers are delegated authorities from the Minister of Public Works and Government Services Canada (PWGSC) to provide procurement and acquisitions-related services to departments and agencies. See Chapter 6 Approvals and Authorities for further details.

1.45 Division of Responsibilities between PWGSC and Client Departments

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  1. The matrix at Annex 1.1: Matrix of Responsibilities between PWGSC and Client Departments for the Procurement of Goods and Services (Generic) provides a generic division of anticipated types of responsibilities between PWGSC and client departments. It forms the basis for an effective and efficient partnering relationship for those who are responsible for activities within the procurement process.
  2. The division of responsibilities, as shown in the matrix, represents a standard way of doing business. However, as every procurement and associated contract differs, alternate divisions of roles and responsibilities can be established in advance by way of a written agreement between PWGSC and the client. Such client-specific or procurement-specific arrangements or matrices will take precedence over this generic matrix. Legislation, regulations and policy will also take precedence over this matrix. Annex 1.1.2: Specific Division of Responsibilities Agreements contains two client-specific agreements with the Department of National Defence.
  3. A Memorandum of Understanding (MOU) has been signed with the Canadian Commercial Corporation. Details for these special procurement processes are described in Chapter 9 - Special Procurements.
  4. The Client Engagement Sector (CES) maintains copies of separate MOUs signed for individual business requirements, which may be obtained by contacting this sector.
  5. All Major Crown Projects (MCPs) have MOUs signed between the project and the contracting authorities to delineate project management responsibilities between the two departments. Copies of these MOUs may also be obtained from the CES or appropriate MCP office.

1.45.1 Litigation Costs

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If a procurement conducted by Public Works and Government Services Canada on behalf of the client department is subject to any litigation proceedings (including a complaint to the Canadian International Trade Tribunal or to the Office of the Procurement Ombudsman, or other alternative dispute resolution process), the client will cover all of the costs (including legal costs, departmental administrative costs, any damages and any amounts required to be paid to third parties) associated with such proceedings.

1.50 Fairness monitoring

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  1. PWGSC's fairness monitoring process provides independent assurance that specific PWGSC procurements are conducted in a fair, open and transparent manner.
  2. A fairness monitor is an independent third party whose role is to observe all or part of a procurement process, to provide related feedback on fairness issues to the project team and to PWGSC's Departmental Oversight Branch, and to provide an unbiased and impartial opinion on the fairness of the observed procurement process.
  3. The involvement of a fairness monitor in a procurement process in no way diminishes or absolves any PWGSC official of their accountabilities or responsibilities. (See 3.135 Fairness Monitors for more details.)

1.55 Commodity Management

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Commodity management is defined by a framework of governance and processes used to review, plan, acquire and control the total life cycle activities of a distinct group of goods and/or services. Use of the commodity management framework results in the award of Pre-competed Procurement Instrument(s), which should meet operational requirements of government departments while providing the optimal cost of ownership and disposal and achieving the best value for Canada. This is in keeping with Canada's commitment to deliver services smarter, faster and at a reduced cost.

1.55.1 Overview of commodity management

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Commodity management provides the following:

  1. A government-wide approach to managing commonly used goods and services that meet the operational requirements of client departments and support their program and service objectives.
  2. An effective "best practices" combination of:
    1. market and demand/spend analysis,
    2. total life cycle and risk analysis,
    3. governance and consultation,
    4. strategic sourcing and procurement practices to achieve the best value and reduce total cost to government through:
      1. volume optimization,
      2. purchase specification standardization and improvement,
      3. supply base optimization,
      4. purchasing process improvements and technology integration,
      5. demand, maintenance and spares management,
      6. best value evaluation,
    5. change management and training to improve client procurement process management,
    6. contract management including performance measurement and tracking.
  3. Attention to these elements is done in the context of current procurement values and ethics of transparency, equity and openness as well as government socio-economic, sustainable development and environmental "green" improvement objective.

1.55.5 Goals and Benefits of Commodity Management

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  1. Some of the goals of commodity management are:
    1. to establish performance measures, to assess what, how and at what cost the government procures goods and services, thereby facilitating a successful continuous improvement program;
    2. to identify risk factors to government operations and mitigation strategies to manage those risks (e.g. strengths, weaknesses, opportunities and threats);
    3. to collaborate with client departments through inter-departmental commodity teams, resulting in the commitment to use government-wide procurement instruments, and
    4. to achieve best value for Canada, including lowest overall cost and ability to support socio-economic objectives, sustainable development and aboriginal objectives.
  2. Some of the benefits of commodity management are:
    1. improved transparency, accountability and responsibility for procurement across the federal government;
    2. a simplified process that ensures efficient delivery of goods and services;
    3. ability to better understand, define and meet operational requirements for a full range of government programs, through close collaboration with client departments;
    4. stronger relationships with the supplier community and the use of procurement processes, leading to the selection of top-performing contractors and to obtain high-quality goods and/or services at best value, and
    5. more effective and pro-active contract management strategies and implementation plans.

1.55.10 Pre-competed Procurement Instruments

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  1. Pre-competed Procurement Instruments (PCPIs), also known as Consolidated Procurements Instruments, can result in, but are not limited to, standing offers, supply arrangements, task authorization contracts, or government-wide contracts resulting from the commodity management processes and are put in place between Canada and one or more suppliers for the provision of a specific commodity over a specified period of time.
  2. Departments and agencies should always consider use of these procurement instruments as the first method of supply of goods and services. There are both mandatory and non-mandatory PCPIs. In 2005, Treasury Board distributed a letter to departments and agencies for mandatory use of standing offers and supply arrangements for 10 ARCHIVED - commodity categories. Further details on the different methods of supply can be found in Chapter 3 Procurement Strategy and Chapter 4 Solicitation Process.

1.60 Environmental Considerations

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1.60.1 Green Procurement Policy

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  1. The Policy on Green Procurement was introduced through the ARCHIVED - TB Contracting Policy Notice 2006-1, and came into effect on April 1, 2006. The objective of the policy is to advance the protection of the environment and to support sustainable development by integrating environmental performance considerations into the procurement decision-making process.
  2. The Policy is set within the context of "value for money" and a life cycle management approach. The Policy requires that departments integrate environmental performance considerations, as a key factor in procurement decisions that occur throughout the life cycle of assets and acquired services. Departments are also required to establish green procurement targets and monitor and report on their green procurement performance through the annual Report on Plans and Priorities and the Departmental Performance Report; or, if applicable, in the Sustainable Development Strategy section of the ARCHIVED - Departmental Performance Report. This Policy applies to all departments and agencies.
  3. The Policy is described in further detail in 2.20 Green Procurement and Defining the Requirement and 3.65 Green Procurement Strategy.
  4. The implementation of the Policy in Acquisitions Branch is managed by the Green Procurement Team, within the Procurement Strategy and Performance Management Directorate (PSPMD). Contracting officers can contact the Green Procurement team by visiting the Contact Green Procurement page.
  5. Contracting officers are required to:
    1. take the on-line course Green Procurement (C215) available through the Canada School of Public Service;
    2. incorporate environmental considerations into the commodity management process for all procurement instruments, if applicable;
    3. advise all clients of the Green Procurement Policy and support them, using the information, tools and guidance available, to meet both the client needs and policy requirements; and
    4. record in procurement files and in contract approval documents that environmentally preferable goods or services have been considered.

1.60.5 Office of Greening Government Operations

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The Office of Greening Government Operations (OGGO) was created in April 2005 within Public Works and Government Services Canada (PWGSC). OGGO's mandate is to accelerate the greening of the government's operations by working with other federal departments, particularly Treasury Board Secretariat and Environment Canada. OGGO works in conjunction with the Green Procurement Team in Acquisitions Branch (AB), to establish procedures to enhance green procurement within AB and throughout the government.

1.65 Policy on government security

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  1. The objective of the Policy on Government Security, as it pertains to contracting, is to ensure that sensitive information and assets of the government are properly protected when entrusted to industry. The role of Public Works and Government Services Canada (PWGSC) in this process is to ensure that individuals and organizations that will have access to or will possess sensitive information and assets have first received the necessary security screening or clearance through the Canadian Industrial Security Directorate (CISD), PWGSC.
  2. PWGSC's Industrial Security Sector (ISS) is the lead in the public service to administer the Contract Security Program (CSP). The CSP is intended to ensure protection of Canadian and foreign government sensitive assets/information entrusted to industry for contracts administered by PWGSC and, on request, for contracts administered by other government departments. PWGSC’s CISD is responsible to security screen private sector organizations and personnel requiring access to sensitive government information and assets. The Program also identifies the appropriate security terms and conditions to be included in each contract and ensures that contractors comply with the security requirements provided by the client department for safeguarding, disclosing, destroying, removing, modifying and interruption of government sensitive information/assets.
  3. As of April 1, 2011, the CSP is under a cost recovery regime. It will cost recover from federal departments and agencies for contract-related security services it provides.
  4. The current approved charging model is an allocation model based on the proportion of all contracts with security provisions accounted for by each client organization. An historic rolling average is calculated over a two-year period commencing three years prior to the year for which they are being charged (e.g. for the fiscal year 2012-2013, the reference period is 2010-2011 and 2011-2012). A weighting factor is used to equalize contract complexity.
  5. The total CSP budgeted costs are then allocated to the client organizations based on their pro-rated share as calculated above. The result is that a client department’s current year charge is based on the rolling average of the last 2 fiscal years contract activity for that client department. There is a Memorandum of Understanding (MOU) in place between PWGSC and each of the client departments describing the services to be provided.
  6. The project authority and the departmental security officer are responsible for ensuring that their department adheres to the Policy and that provisions are made for any suppliers used to provide goods or services to ensure that they also meet the applicable security requirements.
  7. CISD is responsible for the following services:
    1. provide the appropriate security clauses to be inserted into solicitation and contractual documents, as required, when a Security Requirements Check List (SRCL) has been used to identify the needs;
    2. provide appropriate security clearance to any companies that are awarded sensitive contracts in order to meet the security requirements and ensure that they maintain their security clearance during the period of the contract;
    3. ensure that inspections are undertaken and regularly renewed at the company facilities if required; and
    4. carry out the security screening of the contractor's personnel as required by the provisions of the contract.
    Note that contracts may still have a security requirement, even though the contractual documents themselves are not designated as PROTECTED/CLASSIFIED.
  8. Upon request, CISD also handles the security requirements of contracts awarded by other government departments under their own contracting authority;
  9. The Policy is issued by Treasury Board under the authority derived from government decision and section 7 of the Financial Administration Act.
  10. Each federal department is responsible for protecting sensitive information and assets under its control not only in its own operations but also throughout the bidding, negotiating, awarding, carrying out, and terminating of any contracts it manages. In contracting, the SRCL is used by PWGSC and client departments to define their security requirements in a contract. See 2.50 Industrial Security Requirements, 3.55 Industrial Security Requirements (Personnel or Organization)and 7.55 Industrial Security Requirements for more information on security.
    Note: The Canadian Industrial Security Directorate will not do a risk assessment; it will provide the results of their screening to the contracting officers/client departments, which will make the proper decision concerning the contracts. CISD will not approve/disapprove the decision. It is not its role.

1.70 Privacy in Contracting

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  1. Effective April 1, 2008, TB released a Policy on Privacy Protection. Canadians value their privacy and the protection of their personal information. They expect government institutions to respect the spirit and requirements of the Privacy Act. This policy must be read in conjunction with the Policy Framework for Information and Technology and the Policy on Access to Information. Additional mandatory privacy-related requirements are set out in the ARCHIVED - Privacy Impact Assessment Policy.
  2. The Policy on Privacy Protection applies to government institutions as defined in section 3 of the Privacy Act (the Act), including parent Crown corporations and any wholly owned subsidiary of these corporations. It does not apply to the Bank of Canada and to the information excluded under the Act.
  3. The Government of Canada is committed to protecting the privacy of individuals with respect to the personal information that is under the control of government institutions. The government recognizes that this protection is an essential element in maintaining public trust in government. The Supreme Court of Canada has characterized the Act as "quasi-constitutional" because of the role privacy plays in the preservation of a free and democratic society.
  4. Privacy protection in this sense means limiting government interventions into the private lives of Canadians to lawful and necessary purposes. It also means that government must ensure a high standard of care for personal information under the control of government institutions. The government also has to respond to requests for access to personal information. Sound information management plays a key role in facilitating the exercise of access rights under the Act and ensuring privacy protection.
  5. Through government contracts, contracting authorities, clients and other departmental organizations are privy to individual and company private information. It is imperative that precautions are taken in contracting to safeguard this information. Some examples include such things as individual resumes that contain very personal information and secondly company private information that in the wrong hands may provide competing companies technical advantages, trade secrets or financial information.
  6. PWGSC must ensure safeguards are put in place to protect individual and company private information by ensuring information is stored securely and that information is handled through limited distribution and provided only as necessary. Under no circumstances should a company's private information or an individual's personal information be shared with competitors or placed in the public domain without the written authorization of the originator of the information.
  7. Contracting officers should review the Guidance Document: Taking Privacy Into Account Before Making Contacting Decisions whenever personal information about Canadians is to be handled or accessed by private sector suppliers or agencies under contract.

Annex 1.1: Matrix of Responsibilities

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Annex 1.1.1:  Matrix of responsibilities between Public Works and Government Services Canada and client departments for the procurement of goods and services (generic)

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Introduction

  1. The following matrix provides a generic division of anticipated types of responsibilities between Public Works and Government Services Canada (PWGSC) and client departments. It forms the basis for an effective and efficient partnering relationship for those who are responsible for activities within the contracting process.
  2. The division of responsibilities as shown in the matrix represents a standard way of doing business. However, as every procurement and associated contract differs, alternate divisions of roles and responsibilities can be established in advance by way of a written agreement between PWGSC and the client department. Such client department or procurement-specific arrangements or matrices will take precedence over this generic matrix. Legislation, regulations and policy will also take precedence over this matrix.
  3. Regular communication between PWGSC and the client department is considered essential to success in all activities, even for those activities where no contributing role is indicated within the matrix.

Note: The matrix does not represent a delegation of procurement authority by the Minister of PWGSC, and it does not remove from contracting officers their overall contracting responsibilities.

L: Lead
C: Contributing
S: Shared

Generic matrix of responsibilities between PWGSC and client departments for the procurement of goods and services
No. Activities Responsibility
Client PWGSC
1 - Requirements Definition
1.1 Define client's operational requirements:
1.1.1 Define essential characteristics (i.e., Statement of Requirements) L C
1.1.2 Consider all feasible solutions to meet client's operational needs L C
1.1.3 Develop preliminary project cost estimates and schedule L
1.1.4 Conduct cost benefit analysis of alternatives (including life cycle costing analysis) L C
1.1.5 Determine the total resource requirements and implications; for example, training, priority of allocation amongst operational needs and security requirements L
1.1.6 Obtain approval-in-principle to continue with project L
1.1.7 Develop Total Project Plan, including substantive cost estimates and schedules, special project management needs, project phasing, maintenance support requirements, etc. L
1.2 Define client's technical requirements:
1.2.1 Develop Statement of Work (SOW) and/or performance specifications or standards, as appropriate, for the goods/services required in order to meet the operational needs. L
1.2.2 Define the technical requirements for quality assurance, acceptance, warranty, training, documentation, packaging, transportation, initial provisioning, etc. L
1.3 Raise the requisition (form PWGSC-TPSGC 9200):
1.3.1

Prepare the funded requisition for goods/services to be forwarded to PWGSC. Include the Security Requirements Check List (SRCL), with the security clauses provided by CISD, and the Request for Private Sector Organization Screening (PSOS) form, if applicable. Information on how to obtain the PSOS form can be found in section 4.30.10 Industrial Security in Contracts.

*It is important to note that the Canadian Border Services Agency has unique security screening requirements. Refer to Annex 1.3: Canadian Border Services Agency (CBSA) - Security Requirements when Public Works and Government Services Canada (PWGSC) does the procurement.

L C
2 - PWGSC Procurement Plan
2.1 Assess potential sources of supply (Canadian vs. offshore, etc.) C L
2.2 Identify applicable major contracting policy issues/ considerations, which must be resolved to accomplish the procurement. C L
2.3 Examine potential problems in relation to patents, licencing, royalties and technology transfer. C L
2.4 Develop Procurement Plan including:
2.4.1 Delivery schedule and acceptance requirement L C
2.4.2 Contracting approach (including sourcing strategy) C L
2.4.3 Target cost and cash flow plan C L
2.4.4 Statement of appropriate quality and inspection system standards and qualification approvals L C
2.4.5 Communications strategy C L
2.4.6 Contractual risk management C L
2.4.7 Evaluation methodology and selection method C L
2.4.8 Industrial Benefits (IBs), where appropriate C L
2.4.9 Interdepartmental and international agreements related to procurement plan L C
2.5 Obtain Procurement Plan approval. L
3 - Contracting Process
3.1 Prepare the translation of procurement documents (the client is responsible for the translation of the SOW and/or performance specifications or standards and technical evaluation criteria) C L
3.2 Prepare and distribute/post procurement notice on GETS (Government Electronic Tendering Service) and the bid solicitation package. L
3.3 Prepare and distribute technical data packages, as required. L C
3.4 Receipt of bids on bid closing. L
3.5 Evaluate technical elements of bids. L C
3.6 Evaluate time, cost and other contractual elements of bids. L
3.7 Prepare consolidated evaluation and selection of the bidder. C L
3.8 Negotiate the contract, where applicable. C L
3.9 Obtain the contract approval. C L
3.10 Prepare and issue the contract. L
3.11 Debrief unsuccessful bidders. C L
4 - Contract Administration
4.1 General:
4.1.1 Monitor work of the contractor; and receive the contract deliverables. L C
4.1.2 Monitor the cash flow. L C
4.1.3 Report any problems to the contracting authority. L
4.1.4 Resolve any contractual problems. C L
4.1.5 Monitor compliance with the terms and conditions of the contract. S S
4.1.6 Determine that goods and services received are in accordance with the requirement. L C
4.1.7 Determine that goods and services received are in accordance with the contract. C L
4.1.8 Process the claims for payment. L C
4.2 Contract Amendements:
4.2.1 Identify the need for additional work or revisions; confirm the funding. L
4.2.2 Confirm that the contract amendment is the appropriate vehicle. L
4.2.3 Negotiate the contract amendment. C L
4.2.4 Obtain an approval for amendment/change order. L
4.2.5 Prepare and issue the contract amendment. L
5 - Contract Close-out
5.1 Settle the outstanding claims for payment. C L
5.2 Issue the contract closing amendment. L
5.3 Finalize the disposition of Crown assets. L

Annex 1.1.2:  Specific Division of Responsibilities Agreements

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Section A 1.1.2.1:  Division of Responsibilities between Public Works and Government Services Canada (PWGSC) and Department of National Defence (DND) for the Acquisition of Goods and Services

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  1. This matrix is an assigned division of responsibility, agreed by the Ministers of the Department of National Defence (DND) and Public Works and Government Services Canada (PWGSC)1. It forms the foundation for an efficient and effective partnering relationship for those who are responsible for activities within the procurement process.
  2. This matrix is to be used for all DND goods and services procured by PWGSC. An "X" represents the assignment of each activity to a "Lead" and "Participatory" department. An "M" represents the norm for major crown projects (MCP) and like projects.
  3. The assignment of each activity to a "Lead" and "Participatory" department as indicated in this matrix is to be considered the normal way of doing business. However, as every procurement and associated contract differs with respect to complexity, risk, value and availability of skilled resources, deviations can be agreed jointly in advance as long as justifications are formally filed in an agreement between the two departments, which consider reasons why the norm cannot be applicable in specific areas.
  4. In all activities, it is incumbent upon each "Lead" department to always consider as prudent, continuous communication with the procurement representatives of the other department, even if this "Lead" department is identified as the sole "X". Finally, it is important to note that this matrix of assigned responsibilities is not necessarily sequential.
  5. Effective communications between DND and PWGSC must be worked out on a project-by-project basis. The matrix below sets out anticipated DND internal responsibilities. For any individual project, DND requests that communications be through the procurement functional contact, the applicable DND Procurement Manager/Officer, unless otherwise discussed and agreed to with that procurement functional contact.
DND/PWGSC Responsibility Matrix

This matrix is an assigned division of responsibility, agreed by the Ministers of the Department of National Defence (DND) and Public Works and Government Services Canada (PWGSC).

CODE DETAIL RESPONSIBILITY
PO (Procurement Officer)
PM (Project Manager)
TA (Technical Authority - includes LCMM)
PD (Project Director)
M (denotes for MCP or MCP-like projects where role is defined in the PMP)
PM/TA - usually the PM for Capital/NP project procurement and the TA for in-service procurement
PWGSC DND PWGSC Normally Participates DND Normally Participates
1 - DEFINE DND OPERATIONAL REQUIREMENTS
1.1 Define essential characteristics - Statement of Capability Deficiency or Statement of Requirement   PD    
1.2 Seek procurement input/ advice from DND procurement authority   PO    
1.3 Delineate all feasible solutions, within government policy, to meet operational needs (ROM costs)   PD M  
1.4 Identify Total ROM project cost and schedule estimates for SSID   PO    
1.5 Obtain operational approval to continue with project (SSID)   PD    
1.6 Preparation of cost benefit analysis including life cycle costing analysis of alternatives and uncertainties   PD    
1.7 Determine requirement for cooperation & involvement of other Departments/Countries (excluding 3.5.9)   PD    
1.8 Determine national and international obligations applicable to operational need   PD    
1.9 Determine requirement for phased cycles for project implementation   PM X  
1.10 Determine maintenance and support requirements   PM/TA X  
1.11 Determine total resource requirement for the project   PM X  
1.12 Identify Total Project cost (substantive) and schedule estimates        
1.12.1
Obtain and collate cost and schedule information
  PD/PO X  
1.12.2
Develop Total Project cost and schedule estimates
  PO    
1.13 Initiate a PMP (formerly PIP) for project (Responsibility Assignment Matrix)   PM X  
1.14 Develop DND's Procurement Master Plan   PO    
1.15 Obtain approval (SRB and PRC/SPAC)   PM X  
1.16 Prepare project submission and obtain approval (PMB, SS PPA and SS EPA, and Project Briefs)   PD/PM & PO    
1.17 Prepare Memorandum to Cabinet (for MCP's only)   M M  
1.18 Execute DND's Procurement Master Plan   PO    
2 - DEFINE TECHNICAL REQUIREMENTS AND RAISE PROCUREMENT INSTRUMENT
2.1 Establish team (formal or informal as appropriate) for an individual procurement instrument, including required stakeholder   PO X  
2.2 Identify appropriate DND authorities in the PI (e.g. requisition, technical, QA)   PO    
2.3 Statement of Work (SOW)        
2.3.1
Define SOW and/or Performance Specifications in support of the operational need
  PM/TA    
2.3.2
Identify Earned Value requirements (for MCP's or MCP-like projects)
  M    
2.3.3
Review and Refine SOW   PO X  
2.4 Define Government Furnished Resources (e.g. tools, test equipment)   PM/TA    
2.5 Define Quality Assurance and Acceptance requirements   PM/TA    
2.6 Define other technical requirements (e.g. warranty, training, documentation, Initial Provisioning, etc.)   PM/TA    
2.7 Define Technical Evaluation Criteria   PM/TA    
2.8 Prepare Procurement Instrument and Associated Documents        
2.8.1
Validate cost estimate and secure funding for this PI
  PO    
2.8.2
Develop Technical Bid Evaluation Plan
  PM/TA X  
2.8.3
Establish Technical Bid Evaluation Team
  PM/TA X  
2.8.4
Develop proposed procurement schedule (activities and timeline) for this PI
  PM/TA    
2.8.5
Identify and mitigate DND risks associated with this PI
  PO    
2.8.6
Develop Content of Procurement Instrument
  PO    
2.8.7
Review Draft Procurement Instrument
  PO X  
2.9 Approve Procurement Instrument (Requisition)   PO    
3 - DEVELOP PWGSC PROCUREMENT PLAN (*based on DND Procurement Instrument)
3.1 Assess the industrial capability* X      
3.2 Identify applicable major contracting policy which must be considered to accomplish procurement* X      
3.3 Review applicable CITT cases and Federal Court Rulings of Procurement X     PO
3.4 Examine potential problems in relation to patents, licensing, royalties, and technology transfer X PM/TA    
3.5 Develop Procurement Plan including:        
3.5.1
Delivery schedule and acceptance requirement
  PO X  
3.5.2
Contracting approach*
X      
3.5.3
Target cost and cash flow plan
  PO    
3.5.4
Stating of appropriate quality control and inspection system standards and qualification approvals
  PM/TA    
3.5.5
Communications Strategy (e.g. press release, etc.)
X PM/TA    
3.5.6
Risk Management*
X      
3.5.7
Evaluation Methodology*
X      
3.5.8
Industrial and Regional Benefits
X     PM/TA
3.5.9
Interdepartmental and international agreements related to Procurement Plan (excluding DND/ PWGSC)
  PM/TA X  
3.6 Obtain approval of procurement plan X      
4 - CONTRACTING PROCESS
4.1 Review requisition or procurement instrument X     PO
4.2 Review SOW and Technical Evaluation Criteria for its contractibility X     PO
4.3 Prepare Solicitation Bid Package        
4.3.1
Identify Applicable Terms and Conditions (including Basis of Payment)
X     PO
4.3.2
Develop Contractual Evaluation Criteria (time, finance incl. transition, contractual & consolidated evaluation plan)
X     PO
4.3.3
State appropriate authorities (e.g. requisition, technical, contract, quality, etc., as applicable)
X      
4.4 Dispatch "Solicitation - Bid" (RFP/ITT) documentation to Industry and DND X      
4.5 Distribute technical data packages to suppliers as required and as applicable   PM/TA X  
4.6 If competitive (RFP, ITT or equivalent process), Evaluate Bids and Recommend Supplier        
4.6.1
Carry out Technical evaluation (SOW and associated t's & c's) in accordance with the Evaluation Plan
  PM/TA X  
4.6.2
Carry out Contractual evaluation (including contract t's & c's) in accordance with the Evaluation Plan
X     M
4.6.3
Consolidate evaluation and recommend supplier
X     PO
4.7 If sole-source, Negotiate contract X     PO&PM/TA
4.8 Review draft contract documentation   PO    
4.9 Obtain TB or Departmental contract approval, as required X     M
5 - CONTRACT ADMINISTRATION
5.1 Initiate Contract Administration        
5.1.1
Implement Tools and Processes for Administration
X PO    
5.1.2
Kick-Off Meetings with Parties, Stakeholders
X     PO&PM/TA
5.2 Provide Government Furnished Resources (GFR) in Support of Contract Work   PO X  
5.3 Ascertain Contract Performance        
5.3.1
Technical and Quality of the Deliverables
  PM/TA    
5.3.2
Contractor's Engineering, Production and Quality Systems
  PM/TA    
5.3.3
Contractor's Financial and Management Systems
X      
5.3.4
Contract Cash Phasing/ Cash Flow
       
5.3.4.1
Cash Flow Actual versus Contracted Cash Flow
X     M
5.3.4.2
Cash Flow Actual versus DND Planned Cash Flow for Financial Forecast
  PO    
5.3.4.3
Earned Value (monitor progress of work versus planned work and associated cost) for MCP's
X M    
5.3.5
Delivery
       
5.3.5.1
Monitor materiel and services delivery date
  PO    
5.3.5.2
Acceptance Trials and Tests
  PM/TA    
5.3.5.3
Schedule compliance
X M    
5.3.6
Progress Review Meetings
       
5.3.6.1
Requirements/Technical Work Group Meetings
  PM/TA X  
5.3.6.2
Contract Progress Review Meetings with Contractor
X     PO&PM/TA
5.4 Apply Contract Provisions and Processes        
5.4.1
Interpretation and Notifications
X      
5.4.2
Change Control
       
5.4.2.1
Technical (Engineering Change Notices/Proposals)
  PM/TA    
5.4.2.2
Contract Amendments
X     PO
5.4.3
Warranty Provisions
       
5.4.3.1
Invoke Warranty
  PM/TA    
5.4.3.2
Enforce Warranty
X      
5.4.4
Contractual Issues
       
5.4.4.1
Identify contractual issues
X PO    
5.4.4.2
Enforce contractual issues
X      
5.4.5
Accept Contract Deliverables
  PM/TA    
5.4.6
Certify and Process Payments
X PO    
5.5 Close Out Contract        
5.5.1
Crown Asset Disposition
  PO X  
5.5.2
Final Contract Audit
X      
5.5.3
Final Payment and Amendment
X PO    

List of Acronyms:

CITT
Canadian International Trade Tribunal
DND
Department of National Defence
GFR
Government Furnished Resources
ITT
Invitation to Tender
LCMM
Life Cycle Material Manager
MCP
Major Crown Project
NP
National Procurement
PI
Procurement Instrument
PIP
Project Implementation Plan
PMB
Program Management Board
PMP
Project Management Plan
PRC
Procurement Review Committee
PWGSC
Public Works and Government Services Canada
RFP
Request for Proposal
ROM
Rough Order of Magnitude
SOW
Statement of Work
SPAC
Senior Project Advisory Committee
SRB
Senior Review Board
SS(ID)
Synopsis Sheet (Identification)
SS(EPA)
Synopsis Sheet (Effective Project Approval)
SS(PPA)
Synopsis Sheet (Preliminary Project Assessment)
TB
Treasury Board

Section B 1.1.2.2:  Division of Responsibilities between PWGSC and DND for the Quality Assurance of Materiel and Services

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  1. Public Works and Government Services Canada (PWGSC) and the Department of National Defence (DND) agreed in principle to a division of responsibilities between the two departments for the quality assurance of materiel and services acquired on behalf of DND. This agreement will be amended, if and when required, only with the consent of both departments.
  2. This agreement identifies the division of responsibilities as agreed by each department for the quality assurance of materiel and services, as it applies to military specifications, acquired on behalf of DND.
    It does not deal with materiel and services to non-military specifications (see Section A: Division of Responsibilities between PWGSC and DND for the Acquisition of Goods and Services) or with the division of responsibilities for materiel and services managed by an interdepartmental project management office, which are the subject of a separate agreement.
    Materiel and services to military specifications: Includes all materiel and services, including repair and overhaul, as well as research and development for which a military or other DND specification or requirement is included in procurement documents. Also included in this category are materiel and services which are not covered by DND or military specifications but which are of sufficiently significant concern to DND as to require the division of responsibilities annotated under this heading.
  3. PWGSC will also participate with DND in identifying the application and use of quality assurance techniques at the earliest possible stage in the product life cycle and the development and implementation of cost-effective quality assurance support programs.
  4. DND will be solely responsible for the designation of materiel and services as "Military" or "Non-Military" in technical and procurement documentation.
  5. The division of responsibilities identified for a subactivity does not mean exclusive involvement by one department. Close participation and coordination by both departments is essential throughout the various phases of the procurement program.
    Where participation by the other department is indicated, the responsible department is expected to initiate the consultation. However, it does not preclude either department from requesting participation in, or consultation on, any given subactivity relative to an established program.

Materiel and Services for Military Specifications

Sub-activity Description
  1. Definition of Requirements- DND assigned overall responsibility
    Quality assurance services which support achievement of the quality of design, its practicality for manufacture and the means by which conformance will be demonstrated. The tasks involve participation in:
    • A.1
      The evaluation with DND of technical data for completeness, clarity, freedom from irrational or excessive tolerances, contradictions, over stipulation of quality requirements, ability to meet interface requirement, etc.
    • A.2
      Review of design to determine completeness of definition, the methods for demonstrating conformance and analysis of system effectiveness of such major elements as:
      1. Safety
      2. Maintainability
      3. Reliability
      4. Performance
      5. Human Engineering
      6. Interchangeability
      7. Configuration Control.
    • A.3
      Establishment and definition of test methods with respect to practicality, suitability and cost as related to:
      1. Qualification Approval
      2. Design Approval Model (Prototype)
      3. Production Unit Conformance
      4. Acceptance Trials.
      Responsibility for Sub-activity- DND
      Normally Participates in Sub-activity- PWGSC
    • A.4
      Applicability of technical data to current programs of maintenance, repair and overhaul and reprovisioning.
      Responsibility for Sub-activity- DND
    • A.5
      Selection of parts, components or process, with avoidance of those which are difficult to control, subject to excessive variation or high failure rate, etc.
      Responsibility for Sub-activity- DND
      Normally Participates in Sub-activity- PWGSC
    • A.6
      Classification of quality characteristics with respect to their importance to design objectives.
    • A.7
      Designation of quality control and inspection system standards.
    • A.8
      Definition of preferred warranty requirements.
    • A.9
      Establishment of requirements for technical reports from suppliers.
      Responsibility for Sub-activity- DND
  2. Quality Assurance Support Programs- DND assigned overall responsibility
    Develop, support and maintain programs conducive to efficient procurement and quality assurance which includes such tasks as:
    • B.1
      Development as appropriate of contractor quality system standards/specifications for contract use.
    • B.2
      Maintenance of qualified/approved product programs.
    • B.3
      Evaluation of the acceptability of suppliers' quality control/inspection systems, commercial test, laboratory and calibration facilities.
      Responsibility for Sub-activity- DND
      Normally Participates in Sub-activity- PWGSC
    • B.4
      Selection of suppliers with acceptable quality control/inspection systems, commercial test, laboratory and calibration facilities.
      Responsibility for Sub-activity- PWGSC
      Normally Participates in Sub-activity- DND
  3. Requisitioning- DND assigned overall responsibility
    Quality assurance tasks associated with requisitioning (contract demands, local purchase orders).
    • C.1
      Review of the requisition with DND for applicability of the technical data.
      Responsibility for Sub-activity- DND
      Normally Participates in Sub-activity- PWGSC
    • C.2
      Development of Quality Assurance Plan.
    • C.3
      Assurance that workmanship standards are established.
    • C.4
      Determine which contractor quality control/inspection requirements are applicable.
    • C.5
      1. Designation of the Quality Assurance Authority, and
      2. Designation of government quality assurance at source or inspection at destination.
      Responsibility for Sub-activity- DND
    • C.6
      Develop and include special clauses of significance to the assurance of quality.
      Responsibility for Sub-activity- DND
      Normally Participates in Sub-activity- PWGSC
  4. Preparation of Bid Solicitation- PWGSC assigned overall responsibility
    Quality assurance tasks associated with the preparation of bid solicitations.
    • D.1
      Review of quality requirements on the requisition for completeness and clarity.
      Responsibility for Sub-activity- DND
    • D.2
      Establishment of criteria for the evaluation of bids/proposals for compliance with quality requirements.
    • D.3
      Review of past performance of potential bidders in respect of their quality history, to determine potential suppliers.
    • D.4
      Explanation of quality requirements at the prebidders' conference.
      Responsibility for Sub-activity- PWGSC
      Normally Participates in Sub-activity- DND
  5. Bid Evaluation and Supplier Selection -PWGSC assigned overall responsibility
    Quality assurance tasks associated with evaluation and supplier selection in relation to:
    • E.1
      Evaluation of bidders' quality capabilities based upon their quality history and pre-award survey of their quality control/inspection systems.
    • E.2
      Evaluation with DND of the quality/quality assurance implications of selecting alternative products.
    • E.3
      Trade-off analysis of performance cost and schedule.
      Responsibility for Sub-activity- DND
      Normally Participates in Sub-activity- PWGSC
  6. Contract Preparation and Final Award- PWGSC assigned overall responsibility
    Quality assurance tasks associated with contract preparation and final award in relation to:
    • F.1
      Resolution of negotiations with contractor on quality-cost matter not finalized at the bid evaluation stages and review of contract quality requirements to ensure mutual understanding
    • F.2
      Verification with DND that the contract includes the required quality system requirements.
      Responsibility for Sub-activity- PWGSC
      Normally Participates in Sub-activity- DND
  7. Contract Administration- PWGSC assigned overall responsibility
    Performance of the following activities in support of PWGSC contract administration throughout the duration of the contract, as applicable:
    • G.1
      Quality Assurance Verification of the continuing effectiveness of the contractor's methods for controlling his product quality. These elements are:
      1. Management control system review
      2. Planning
      3. Quality Assurance documentation
      4. Corrective action
      5. Design, development, control and engineering features
      6. Documentation control and change
      7. Control of inspection, measuring and test equipment
      8. Control of contractor purchased materiel
      9. Manufacturing and process control
      10. Purchased and/or supplied materiel standards and specifications
      11. In-process and final inspection and test
      12. Sampling procedures
      13. Control of non-conforming materiel
      14. Inspection status
      15. Handling, storage and packing.
    • G.2
      1. Verification of the conformance of preproduction or first-off unit.
      2. Periodic sampling as appropriate during production to ascertain conformance to specifications.
      3. Timely reporting to PWGSC in the event of deviations from specifications.
      4. Verify acceptability of product and authorize release to consignee.
    • G.3
      Quality assurance action in technical change procedures such as initiation, and recommendation.
    • G.4
      Review of contract quality requirement with contractor to ensure mutual understanding.
      Responsibility for Sub-activity- DND
      Normally Participates in Sub-activity- PWGSC
  8. Contract Close out and Clean-up- PWGSC assigned overall responsibility
    Quality assurance tasks performed during contract close-out and clean-up:
    • H.1
      Verification from DND of the condition and disposition of Crown-owned production tooling, inspection and test equipment
    • H.2
      Verification from DND of the completeness, suitability and proper disposition of technical data and documentation.
      Responsibility for Sub-activity- DND
      Normally Participates in Sub-activity- PWGSC
  9. Post-delivery Appraisals- DND assigned overall responsibility
    Quality assurance tasks arising during the life of the product in relation to:
    • I.1
      Quality History
      1. Accumulation and assessment of quality assurance histories for the purpose of recommending need for modification of product technical data, quality assurance standards, or quality assurance plans for the product, based on quality data acquired from the following:
        1. Product Qualification
        2. Supplier Evaluation
        3. Bid Evaluation
        4. Product Quality Assurance
        5. Post-delivery Appraisal.
    • I.2
      Unsatisfactory Condition Report/Complaints
      1. Review of failure reports where the complaint has been associated with quality defects.
      2. Analysis and identification of cause.
      3. Seeking of corrective action with contractor or through PWGSC. In all instances, DND should notify PWGSC immediately in writing.
      Responsibility for Sub-activity- DND
      Normally Participates in Sub-activity - PWGSC
  10. Disposal- DND assigned overall responsibility
    Quality assurance tasks related to the disposal of equipment and data.
  11. Warehousing and Distribution- DND assigned overall responsibility
    Quality assurance tasks associated with the development of a quality program which, will assure product quality on receipt, during storage and on issue, including such elements as:
    • K.1 Preparation of Inspection Plans, including inspection on receipt, during storage, on issue and after repair.
    • K.2 Control of technical data.
    • K.3 Control of adequacy of inspection equipment.
    • K.4 Incoming inspection.
    • K.5 Identification of defective material.
    • K.6 Procedures for material handling.
    • K.7 Packaging and shipping.
    • K.8 Inspection records.
    • K.9 Quality audit.
    • K.10 Corrective action.
      Responsibility for Sub-activity– DND

1 The matrix does not represent delegation of procurement authority by the Minister of PWGSC, and does not affect the responsibility of the contracting officer as defined in Treasury Board Contracting Policy.

Legislation, regulations and policy will take precedence over this matrix in the case of any ambiguity.

Annex 1.2: Memorandum of understanding between the Royal Canadian Mounted Police and the Canadian Industrial Security Directorate

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The Memorandum of Understanding between the Royal Canadian Mounted Police and the Canadian Industrial Security Directorate has expired and was removed from the Supply Manual.

For reference purpose only, Annex 1.2 is available in the Supply Manual ArchiveThe information is only accessible to federal government department and agency employees. , Version 2016-2.

Annex 1.3: Canadian Border Services Agency (CBSA) - Security Requirements when Public Works and Government Services Canada (PWGSC) does the procurement

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  1. IMPORTANT: CBSA has its own unique security requirements. The client will conduct its own personnel Reliability Status assessment on the proposed contractor and its personnel** as per the Treasury Board Secretariat of Canada’s (TBS) Security and Contracting Management Standard and the ARCHIVED - Policy on Government Security – Personnel Security Standard, irrespective of whether such assessment has already been conducted under any such policies. The Reliability Status assessment conducted by the CBSA will include a credit check performed by an authorized security official with the CBSA’s Personnel Security Screening Section (PSSS), which is independent of PWGSC's Canadian Industrial Security Directorate (CISD) and the International Industrial Security Directorate (IISD).
    **In some instances, "contractor and its personnel" can include landlords, property management employees and principles of companies when the latter have access to the premises where the CBSA designated or classified information/assets are kept.
  2. For each proposed resource, the bidder must submit a completed signed original TBS/SCT 330-23E – Personnel Screening Consent and Authorization Form upon request of the contracting authority prior to contract award.
  3. PWGSC Acquisitions Branch can use the following clauses when provided to them by CBSA. CISD recognizes and is aware of the requirement to insert CBSA clauses, however, the usual CISD process still applies for CBSA requirements which include the provision of a Security Requirements Check List (SRCL) and CISD clauses. CISD will issue the organizational, personnel, and any necessary physical security clearances required pursuant to the SRCL. Prior to contract award, assurance must continue to be obtained from CISD.
    • Clause 1: Until the credit check and all other security screening processes required by this Request for Proposal have been completed and the Contractor and its personnel is considered suitable by the CBSA, no contract will be awarded and the recommended Contractor / Offeror (specifically the Contractor / Offeror personnel) shall not be permitted access to Protected / Classified information or assets, and further, shall not be permitted to enter sites where such information or assets are kept.
    • Clause 2: In the event the Contractor / Offeror (specifically the Contractor / Offeror personnel) does not pass the security screening process required by the CBSA, the said Contractor’s proposal will be considered non-responsive and the next ranked bidder will be contacted. If only one bid was obtained and the proposed bidder does not meet the security requirement, then, the contracting officer will determine the next steps in order to ensure all requirements are met.