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3.1.10. Addressing Identified Risks in the Approval Document

  1. The approval document should contain the following elements:
    1. Risk Statement: This statement describes what risk may occur, the harm it may cause, the likelihood of the harm occurring and the extent (or severity) of its impact.
    2. Risk Response: This describes the action that can be taken to reduce the level of risk. Risk response measures can take the form of risk reduction so that the impact of the risk is lowered. Alternatively, avoidance and prevention measures can also reduce the likelihood of occurrence.
    3. Residual Risk: The residual risk is what remains after risk response measures have been applied. In theory, no risk can be completely eliminated, and so there must be a description of the remaining level of risk involved in the procurement. The level of the residual risk can be a critical factor in determining how to proceed with the procurement because the residual may be at an unacceptable level.
  2. A copy of the completed Procurement Risk Assessment (PRA) (see 3.1.5 Procurement Risk Assessments for Complexity Level 1, 2 and 3 Procurements) must accompany the approval document and be kept on file.
  3. The approval authority may direct the contracting officer to review the procurement strategy or risk factors; to seek review by Legal Services, Cost Analysts or other subject matter experts; or to repeat the complexity assessment or risk assessment.
  4. In cases where the PRA is revised, a copy must be attached to the approval document indicating which version it is and the reason for the revised PRA.