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Public Works and Government Services Canada

1.20. Statutes and Regulations

  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.