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3.130. Canadian Content Policy

  1. The Canadian Content Policy is a Cabinet-mandated policy. It encourages industrial development in Canada by limiting, in specific circumstances, competition for government procurement opportunities to suppliers of Canadian goods and services.
  2. Application
    1. The Policy applies to PWGSC Acquisitions Branch and the Department of National Defence. The Policy does not apply when other government departments do their own contracting.
    2. The Policy applies to competitive procurements with an estimated value of $25,000 or more, except for the following:
      1. government procurements subject to the international trade agreements;
      2. procurements made in furtherance of aid to developing countries, but does apply to purchases made by the Canadian International Development Agency (CIDA) on its own account;
      3. procurements made by PWGSC Acquisitions offices located outside Canada; and
      4. other Cabinet-mandated sourcing, including sourcing related to industrial and regional benefits, shipbuilding, ship repair, refit and mid-life modernization.
  3. Canadian Goods and Services
    1. A good wholly manufactured or originating in Canada is considered a Canadian good. A product containing imported components may also be considered Canadian for the purpose of this policy when it has undergone sufficient change in Canada, in a manner that satisfies the definition specified under the North American Free Trade Agreement (NAFTA) Rules of Origin. For the purposes of this determination, the reference to "territory" in the NAFTA Rules of Origin is to be replaced with "Canada".
    2. A service provided by an individual based in Canada is considered a Canadian service. Where a requirement consists of only one service, which is being provided by more than one individual, the service will be considered Canadian if a minimum of 80 percent of the total bid price for the service is provided by individuals based in Canada.
    3. Other Canadian Goods and Services: Textiles are considered to be Canadian goods according to a modified rule of origin, copies of which are available from the Clothing and Textiles Division, Commercial and Consumer Products Directorate (CCPD).
    4. For further information on the determination of origin of goods and/or services under the Canadian Content Policy, refer to Annex 3.6: Canadian Content Policy: Rules of Origin Determination.
  4. Preparing a Bid Solicitation
    1. When a requirement is covered by the Canadian Content Policy, the contracting officer must first determine whether there are two or more eligible suppliers in the marketplace. Eligible suppliers are those supplying Canadian goods and/or services that could potentially meet the requirement.
    2. Next, based on the number of eligible suppliers, the contracting officer must decide whether a requirement will be solely or conditionally limited to suppliers of Canadian goods and/or services, or whether the procurement will be open to all suppliers.
      1. Solely Limited: the bid solicitation or request for standing offers will be solely limited to suppliers who could offer Canadian goods and/or services when the contracting officer believes there exists, in the marketplace, two or more such suppliers.
        1. Certifications for competitive procurement solely limited to Canadian goods and/or services are provided in the Standard Acquisition Clauses and Conditions (SACC) Manual, under clause numbers: A3051T, A3052T, A3053T, A3055T, A3056T and A3059T for bid solicitations; and M3051T, M3052T, M3053T, M3055T, M3056T and M3059T for requests for standing offers.
        2. Except for bids that will be publicly opened, the contracting officer will determine whether:
          1. the bidder will be required to submit the completed certification of Canadian content with the bid, or
          2. the bidder should submit the completed certification with the bid, but it is not mandatory. If the certification is not completed or submitted with the bid, the contracting officer will contact the bidder and provide the bidder with a timeframe within which to submit the completed certification. The contracting officer will normally not require bidders to submit certifications with their bid unless the requirement is urgently needed by the client.
        3. For publicly opened bids, the bidder will be required to submit the completed certification with the bid.
      2. Conditionally Limited: the bid solicitation or request for standing offers will be conditionally limited when the contracting officer is uncertain whether two or more suppliers of Canadian goods and/or services exist.
        1. Certifications for competitive procurement conditionally limited to Canadian goods and/or services are provided in the SACC Manual, under clause numbers: A3061T, A3062T, A3063T, A3065T, A3066T and A3069T for bid solicitations; and M3061T, M3062T, M3063T, M3065T, M3066T and M3069T for requests for standing offers.
        2. The bidder will be required to submit the Canadian content certification with the bid.
      3. Open: when the contracting officer is of the opinion that two or more suppliers of Canadian goods and/or services do not exist, the bid solicitation or request for standing offers will be open to all suppliers. Bidders are not required to provide a certification.
    3. Once the sourcing strategy is determined, the contracting officer will prepare a Notice of Proposed Procurement (NPP). The procurement opportunity will be coded on the Government Electronic Tendering Service (GETS) as:
      1. Solely Limited, Code O-5;
      2. Conditionally Limited, Code O-4; or
      3. Open, Code O-1.
    4. Where a procurement is subject to the Canadian Content Policy, and the competition has been solely or conditionally limited, the bidder must certify the Canadian content by submitting a certification that the good or service offered meets the definition of Canadian goods and/or services.
      1. When requirements consist of more than one good and/or service, the contracting officer must decide, at the procurement planning stage, whether the Canadian content certification will be done on an aggregate or individual basis:
        1. aggregate: multi-item requirements will be certified on an aggregate basis. A minimum of 80 percent of the total bid price must consist of Canadian goods to meet the requirements of the Policy; or
        2. item by Item: multi-item requirements awarded on an item by item basis will be certified on an item-by-item basis. In these cases, suppliers will be asked to identify separately, each item that meets the definition of Canadian goods.
      2. For requirements consisting of more than one service, a minimum of 80 percent of the total bid price must be provided by individuals based in Canada.
      3. For requirements consisting of a mix of goods and services, 80 percent of the total bid price must consist of Canadian goods and Canadian services. See Annex 3.6: Canadian Content Policy: Rules of Origin Determination for an example of how to determine whether a mix of goods and services meets the 80 percent rule.
      4. A bid can be accepted in part without resubmission of a certification.
  5. Bid Handling
    1. The supplier is responsible to demonstrate that its bid meets the definition of Canadian goods and/or services and must submit a completed certification. When the SACC Manual clauses: A3052T and A3062T for bid solicitations; and M3052T and M3062T for requests for standing offers are used, the supplier must clearly identify the status of each individual product.
    2. Bids to which the Canadian Content Policy applies will be evaluated as follows:
      1. If the procurement process was solely limited to Canadian goods and/or services, and
        1. the bidder was required to submit the certification with the bid, only bids with a valid certification will be evaluated. The bid evaluation process can proceed where there is at least one bid with a valid certification otherwise the bid solicitation must be reissued; or
        2. the bidder was not required to submit the certification with the bid, the contracting officer will contact the bidder and provide the bidder with a timeframe within which to submit the completed certification. If the bidder does not comply by submitting the completed certification within the prescribed timeframe, the bid will be declared non-responsive. A bid will only be provided to the client department for evaluation once the completed certification is received. The bid evaluation process can continue as long as there is at least one bid with a valid certification otherwise the bid solicitation must be reissued.
      2. If the procurement process was conditionally limited to Canadian goods and/or services, the contracting officer will determine, first, if there are two or more bids with a valid Canadian content certification. In that event, the evaluation will be limited to the bids with the certification; otherwise, all bids will be evaluated. If the bids with a valid certification are later declared non-responsive or withdrawn, and, and after such there are less than two responsive bids with a valid certification of Canadian goods and/or services, the evaluation will continue among those responsive bids which contain a valid certification. If all bids with a valid certification are subsequently found to be non-responsive or withdrawn, then all other bids received will be evaluated. (See SACC Manual clause A3070T.)
    3. PWGSC may verify the validity of the certification. If the certification is declared non-responsive, then the offered goods and/or services are deemed not to meet the definition of Canadian content. Verification of the certification must in no way alter the price quoted or any substantive element of the bid.
  6. Contract Award
    Contracts awarded on the basis of the bid having met the definition of Canadian content under the Canadian Content Policy will include SACC Manual clause A3060C or M3060C, as applicable.
  7. Canadian Content and CLCA or PSAB
    Please contact tpsgc.rcndgaertgsaea-ncrabclcapsab.pwgsc@tpsgc-pwgsc.gc.ca for guidance and advice on these situations.
  8. Discretionary Audits and Reviews
    The authority for discretionary audits results from either the contractual terms, or statute (Defence Production Act, section 19). If a contracting officer has concerns about the certification of Canadian content under the Canadian Content Policy, the contracting officer should discuss the use of a discretionary audit or review with their management and with the Acquisitions Program Policy Directorate.
  9. For more information on determining Rules of Origin under the Canadian Content Policy, see Annex 3.6: Canadian Content Policy: Rules of Origin Determination.