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5. Chapter 5 - Evaluation and Selecting the Contractor

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5.1 Overview if the evaluation and selection of contractors

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  1. This chapter contains information concerning the evaluation process, which includes both the evaluation of bids and the selection of a successful bidder. The chapter further addresses negotiations with the bidder(s) before contract award.
  2. For more information on bid evaluation, consult the Basic Guide for Bid Evaluation Process (available on GCpedia - Acquisitions Program Policy Suite - Procurement ProcessThe information is only accessible to federal government department and agency employees.).
  3. It is recommended that contracting officers also familiarize themselves with the Basic Guidelines for Bid Evaluation Process - Contractor Selection MethodsThe information is only accessible to federal government department and agency employees..

5.5 Evaluation procedures

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  1. The main purpose of bid evaluation is to determine the best responsive bid, in accordance with the evaluation and selection methodology specified in the solicitation document, among the bids submitted before the bid closing time on the date specified in the bid solicitation.
  2. The responsive bid offering the best value to Canada may or may not necessarily be the one with the lowest price. In order to accurately determine best value, a logical systematic evaluation procedure covering all aspects of the evaluation process must be followed.
  3. Before starting the actual technical and financial evaluation of bids, it is necessary to ensure that all the information required at bid closing is available and ready to be transmitted to the evaluators. It is the responsibility of Public Works and Government Services Canada (PWGSC) to determine whether the bids received are complete, as specified in the bid solicitation, before further detailed evaluation of the bids. This means, for example, verifying:
    1. that certifications or securities required at bid closing are included;
    2. that bids are properly signed;
    3. that the bidder is properly identified (particularly important in the case of joint ventures);
    4. acceptance of the terms and conditions of the bid solicitation and resulting contract, such as bid validity period;
    5. ability to meet a clearly specified critical delivery schedule;
    6. whether the bid is conditional (e.g. limitation of liability), or
    7. that all documents, required by the bid solicitation to determine technical responsiveness, have been submitted.
    Note: It is recommended that the contracting officer creates and uses a check list of all requirements, which can be used throughout the evaluation of each bid.
  4. Evaluation of bids must be in accordance with the procedures stipulated in the bid solicitation. They must be checked for responsiveness to the contractual, technical and financial requirements of the bid solicitation. Fair, accurate and transparent evaluation of bids is an important aspect of procurement process. Generally, financial bids should not be sent to the technical evaluators until after completion of the technical evaluation.

5.5.5 Certifications, declarations and proofs

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  1. Certifications, declarations and proofs are standalone documents that substantiate information submitted with a bid, offer or arrangement. Standalone documents are independent from requirements for bid evaluation but they are mandatory to finalize the bid evaluation process. Personal references may also be included under this policy but only if their use will not change the substance of a bid, offer or arrangement or introduce new information that could improve a score or ranking.
  2. Mandatory certifications, declarations or proof documents may be requested at bid closing. However, under this policy bidders must not be required to provide these documents at bid closing unless, the documentation being requested is included in the Exceptions section below. Contracting officers must ensure that all solicitation documents identify which certifications, declarations and proofs are required. If these documents have not been provided at bid closing, PWGSC will notify the bidder, offeror or supplier that they are required to provide them within two business days following notification by PWGSC. (Note: this time requirement reflects PWGSC’s expectation that these documents ought to be readily available to a bidder, offeror or supplier.)
  3. Once notified, any bidder, offeror or supplier that fails to provide the required document(s) within two business days will be informed by the Department that their bid, offer or arrangement is non-responsive and that it will be given no further consideration.
  4. The contracting authority must apply the ”two business days” time requirement to any SACC manual clause that currently allows for the contracting authority to stipulate the time to provide a certification, declaration or proof.
  5. The following exceptions are permitted:
    1. Integrity Provisions - The bidder, offeror or supplier must provide a completed Declaration Form or list of directors or owners in accordance with conditions defined in Ineligibility and Suspension Policy.
    2. Procurement Strategy for Aboriginal Businesses (PSAB) - Bidders, offerors or suppliers must include with their bid, offer or arrangement certification that they meet the approved definition of an Aboriginal Business.
    3. Canadian Content Policy – The bidder, offeror or supplier must provide certification in accordance with conditions defined in the Canadian Content Policy.
    4. Registry and Pre-qualification of Floating Plant – the bidder, offeror or supplier must provide certification with the bid as stated in Standard Acquisition Clause R2710T-GI06 General Instructions - Construction Services - Bid Security Requirements.
    5. Requests for Financial Capability documentation – Contracting officers in consultation with the Cost and Price Analysis Group determine what financial information will be required from a subset of bidders during the bid evaluation phase and the time frame for providing the information.
    6. Solicitations using Public Openings - the bidder, offeror or supplier must provide certifications, declarations and proofs with the bid as specified in the solicitation.

5.10 Confidentiality of Bids

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  1. The contracting officer must treat all information in a secure and confidential manner to ensure the integrity of the contracting process.
  2. When referring bids to the client (or technical evaluators) during the evaluation process, the following cautionary note must be provided to the client:
    "Bid information must be divulged only to individuals authorized to participate in this contracting process. Information must not be divulged to, or discussed with, the private industry."
  3. During the period from bid closing to contract award, (including the contract approval process), contracting officers receiving requests from suppliers for the names of bidders must not release this information. For more information, suppliers should contact the Access to Information and Privacy Office.
  4. After contract award, the names of bidders and other information may be released in accordance with departmental policy. (See 7.30 Procurement Reporting and Posting of Award Notices.)

5.15 Verifying Compliance with Security Requirements

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  1. Before contract award, the contracting officer must verify with the Canadian Industrial Security Directorate (CISD) that the proposed contractor meets the security requirements of the bid solicitation. This verification can be done by contacting the CISD call centre and requesting a security status sheet for the successful bidder. The contracting officer shall not rely on the security indicator in the Vendor Information Management (VIM) system as it may not always be up to date. The request to CISD for a security status sheet should include the proposed contract number, the full name and address of the proposed contractor, if applicable, the address of location of the work performance, as well as the required security levels stipulated in the proposed contract. If the supplier has the appropriate security clearance, the contracting officer must sign the Security Requirements Check List (SRCL) at block 16 and include the fully signed SRCL as an annex in the resulting contract. In the case of call-ups against a standing offer or contracts against a supply arrangement, it is the responsibility of the user to verify that the contractor meets the security requirements.
    IMPORTANT: When security clearances such as IT, Production and/or COMSEC are required, seek assurance of these specific security types from CISD as they are contract specific and not blanket clearances held by the organizations.
  2. During the period of the contract, the client must ensure that all contractor or subcontractor personnel who will have access to any classified or protected information, assets or sensitive work sites, or to government systems are identified as working under the contract and that their security status has been verified with CISD. The contracting officer will assist in this process as required.
  3. When security clearances are mandatory, they must be obtained before the commencement of any work. However, it is recognized that there may be circumstances under which, for reasons of urgency, the contractor, or the contractor’s employee(s) must begin the work before the completion of the security process. In these cases, consult with CISD for options. However, in a competitive solicitation, the method of selection must be followed; therefore, any delay must be in accordance with the solicitation procedures.
  4. If, at any time during the period of the contract, the contracting officer becomes aware that a subcontractor, whose security status has not been verified with CISD, will require access to any classified or protected information, assets or sensitive work sites, the contracting officer must consult with CISD to ensure the necessary subcontract SRCLs are submitted and as well verify that the subcontractor meets the security requirements.

5.16 Integrity compliance

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  1. Before awarding a contract (including issuing a purchase order), issuing a standing offer (SO) or supply arrangement (SA), or publishing of a pre-qualified supplier list, contracting officers must first verify with the Registrar of ineligibility and suspension (the Registrar) that the bidder, offeror or supplier is not ineligible to be awarded a contract or suspended. Certain charges, convictions and other circumstances, as described in the Ineligibility and Suspension Policy will or may render the bidder, offeror or supplier ineligible to be awarded or suspended from being awarded a contract.
  2. The integrity verification process with the Registrar is not required in the following circumstances:
    1. call-ups against standing offers;
    2. contracts against supply arrangements (SAs) (note: an integrity verification is typically not required when awarding a contract against an SA, however an integrity verification will be required when awarding a contract against an SA issued prior to April 4, 2016, where the latest Integrity Provisions have been incorporated by reference into the solicitation);
    3. task authorizations;
    4. contract amendments unless there is a change to the Integrity Provisions or members of the board of directors;
    5. purchases using acquisition cards;
    6. contracts where the transaction value is less than $10,000.00 (GST/HST included) (see the Policy for definition of transaction value); or
    7. any other contract or type of contract specified in Section 4.b) of the Policy or directive issued further to the Policy.
  3. Verification process:
    1. Before awarding a contract (including issuing a purchase order with a transaction value of $10,000 or more, including GST/HST), issuing an SO or an SA, or publishing a pre-qualified supplier list, contracting officers must submit the information on the bidder, offeror or supplier to the Registrar using the Integrity Database Services (IDS) portal.
    2. Responses are typically provided within 4 hours for routine requests and within 2 hours for urgent requests, on business days, between 8:00 a.m. and 4:00 p.m. Eastern Standard Time.
    3. List of directors or corporate owners:
      1. Contracting officers are not required to verify whether bidders, offerors or suppliers should have provided a list of directors or corporate owners, but are simply to submit to the Registrar the information as received from the bidders, offerors or suppliers.
      2. Where a bidder, offeror or supplier has not provided a list of directors or corporate owners with their bid, offer or arrangement, the contracting officer must submit the complete legal name, address and Procurement Business Number (PBN) of the successful bidder, offeror or supplier, along with the solicitation number (or proposed contract number) to the Registrar.
      3. The Registrar determines whether a bidder, offeror or supplier should have provided a list of directors or corporate owners. In the event that such list should have been provided, the Registrar will communicate this requirement to the contracting officer, who will then inform the bidder, offeror or supplier of their obligation to provide the list within a recommended 10 business days. Failure to provide this information within the timeframe stipulated by the contracting officer will render the bid , offer or arrangement non-responsive. See 5.5.5 Certifications, declarations and proofs.
    4. Verification responses:
      Three responses are possible, as described below. Contracting officers are to keep a copy of the confirmation e-mail from the Registrar in the procurement file. This process and the estimated timelines can be delayed should additional information be required by IDS to allow them to make a determination.
      1. "Integrity result – The supplier is not ineligible. (No match)": This response confirms that the contracting officer may award the contract, issue the standing offer or the supply arrangement, or publish the list of pre-qualified suppliers.
      2. "Ineligibility confirmed": This response indicates that the bidder, offeror, or supplier has been determined to be ineligible or suspended as per the Ineligibility and Suspension Policy. The bidder, offeror or supplier is suspended or ineligible to be awarded a contract or issued a standing offer or supply arrangement, or to be included in a list of pre-qualified suppliers. In exceptional circumstances, the contracting officer may request a Public Interest Exception (PIE) to enter into a contract with an ineligible supplier.
      1. "Caution due diligence should be applied": This response advises that the bidder, offeror or supplier is not ineligible. However, the level of delegation to enter into the transaction has been raised to Assistant Deputy Minister or Director General as indicated in the verification response email. This information is for internal discussion and decision making only and, as such, should never be discussed with external parties.
    5. Where “Ineligibility confirmed” or “Caution due diligence should be applied” responses are received, contracting officers must consult with the Acquisitions Program Integrity Secretariat (APIS) by e-mail at TPSGC.DGAIntegrite-ABIntegrity.PWGSC@tpsgc-pwgsc.gc.ca, and obtain the required approval as stipulated in Annex 6.4.1. Approval Authorities and Additional Signing Authorities in Support of Clients' Programs Only – Other than for Canadian Commercial Corporation.
    6. Where the Registrar must confirm the identity of an individual as a result of an integrity verification response, they will request information directly from the individual in question.
  4. Verification Process for Amendments:
    1. Contracting officers must propose the latest general conditions, which include the most recent Integrity Provisions when amending a contract as per section 4.21 Integrity Provisions, subsection d. The verification process as outlined in subsection c. above must be followed if the contractor accepts the new Integrity Provisions to be included in the contract amendments, and the existing contract contains Integrity Provisions dated prior to July 2015.
    2. The verification process as outlined in subsection c. above must be followed for contract amendments where the file does not already contain a record of a previous verification.
    3. If a previous verification was performed and the results are on file and the Integrity Provisions have not changed, no further action is necessary.
  5. If a contractor is found to be ineligible or is suspended while the contract is active, the Registrar will contact the contracting officer who requested the integrity verification for that particular contract. The contracting officer, with the assistance of the Acquisitions Program Integrity Secretariat (APIS), will determine whether the contract can be terminated for default. If the contract is to be terminated for default, APIS will assist the contracting officer. The ineligible or suspended contractor may be required to enter into an Administrative Agreement with Public Works and Government Services Canada if the contract is not terminated.
  6. Awareness and Prevention: Before contract award or issuance of standing offers or supply arrangements, the successful bid or offer must be reviewed by a contracting officer who has completed the training on Bid Rigging Awareness and Prevention. This can be the same contracting officer assigned to the procurement file.
  7. For further details on Integrity, see the following sections:

5.20 Use of Subject Matter Experts/Specialists

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  1. Contracting officers should take advantage of the knowledge of specialists or subject matter experts. They are available to provide guidance in their areas of expertise, whenever it would be helpful and/or appropriate in making a recommendation or confirming a decision.
  2. Subject matter experts/specialists include: legal services, Access to Information and Privacy officers, contract quality control officers, cost analysts and risk management advisors, auditors, policy authorities, green procurement specialists, ethics officers, Human Resources authorities, commodity team leaders, client engagement officers, experienced contracting officers, industry/association representatives, etc.

5.25 Use of Fairness Monitors

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  1. When a fairness monitor has been engaged to support a procurement process, he/she will provide written reports to the Departmental Oversight Branch (DOB), in accordance with the statement of work included in the fairness monitor's contract, attesting to the fairness of the procurement process.
  2. If a fairness monitor observes a situation that constitutes, or has the potential to create, fairness deficiencies, the fairness monitor will inform the project team of its concerns and seek a resolution. If a resolution cannot be reached, the fairness monitor will immediately advise DOB.
  3. The fairness monitor will submit a final report to DOB, which includes among other things, the fairness monitor's overall attestation of assurance on the fairness of the monitored activity and any unresolved fairness deficiencies observed. This report will be made public after tabling with senior management.

5.30 Clarifications

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  1. To be considered for contract award, a bid must, at closing date meet all mandatory requirements stipulated in the bid solicitation. Bidders are responsible to meet the criteria stipulated in the bid solicitation as well as request clarification before submitting a bid if they are not sure they understand a requirement. The instructions to bidders clearly provide that PWGSC may request clarification from bidders, but it is under no obligation to do so.
  2. If PWGSC decides to request clarifications or additional supporting data from the bidders, the contracting officer must ensure that this process does not give any bidder an advantage over the others. In no event can this clarification alter the price quoted or any substantive element of a bid.
  3. Only clarifications which do not change the substance or price of a bid may be requested and accepted. The request for clarifications and response must be in writing. Any response, which leads to a substantial change in the bid is considered bid repair and must not be considered in the bid evaluation. Pursuant to the Canadian International Trade Tribunal (CITT), a clarification is acceptable only if it is an explanation of some existing aspect of the bid that does not amount to a substantive revision or modification of the bid. Bidders cannot be allowed to repair their bid through a clarification process.
  4. In conducting its evaluation of the bids, Canada may, but has no obligation to correct any error in the extended pricing of bids by using unit pricing and any error in quantities in bids to reflect the quantities stated in the bid solicitation. In the case of error in the extension of prices, the unit price will govern.
  5. If an unusually low price is identified, the bidder must be given the opportunity to either confirm or withdraw its bid in writing. Once confirmed, the supplier must accept the price in any resulting contract. The contracting officer must not divulge the difference in price between that bid and the next lowest bid. In no event will the bidder be permitted to increase the price. In solicitations with bid security, this provision may not apply.
  6. The contracting officer will specify in the request the number of days the bidders will have to comply with any request. Failure to comply with the request may result in the bid being declared non-responsive.

5.35 Evaluating the Bids

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  1. The client is responsible for the evaluation of the technical portion of the bids, and, where applicable, the management portion. PWGSC is responsible for the evaluation of the contractual terms and conditions and the financial portion of the bids. Bids must meet all the mandatory requirements and criteria set out in the bid solicitation. Bids that fail to meet a mandatory requirement (such as a bid bond or any information or document) or any other mandatory evaluation criteria (technical, financial or other) will be declared non-responsive.
  2. For Complexity Levels 2 and 3, the procurement risk assessment may determine that a Formal Peer Review of the results of the bid evaluation is required. For Complexity Levels 4 and 5 inclusive, a review of the results of the bid evaluation is mandatory. For more information on the Formal Peer Review, see 5.45.1 Formal Peer Review of Evaluation. In all other situations once the bid evaluation is completed, contracting officers are encouraged to obtain a review of the results of that evaluation prior to issuing the contract.
  3. In some cases, third parties may be invited to assist in evaluating bids, for example, scholars and other experts. When third parties will be involved, bidders must be advised in the bid solicitation. In general, third parties participating in the evaluation, or in the bid preparation, must sign a non-disclosure agreement and a conflict of interest agreement before such participation.
  4. Bids must be evaluated in accordance with the evaluation criteria established in the bid solicitation. Even though the onus is on bidders to submit clear and well-organized bids, bids must be reviewed with diligence and thoroughness to ensure that no essential information is missed. The evaluators must not use criteria or factors not included in the bid solicitation or derive conclusions from information contained in bids that may prove wrong. Whenever possible, the same evaluators should evaluate all bids. When evaluating bids, evaluators must consider all vital information provided in the bid, and must not base their evaluation on undisclosed criteria.
  5. Documents pertaining to the evaluation of bids must be retained. Evaluators must provide the original or a copy of all evaluation notes and communications to the contracting officer for filing on the procurement file. All such information is subject to the Access to Information Act. For example, evaluators' worksheets must not be destroyed even if the information contained in the worksheets is recorded in other evaluation documents. Following a relevant Canadian International Trade Tribunal decision, it was found that evaluators' worksheets are an integral part of the evaluation process and constitute part of the complete record regarding the procurement and part of the written record of all communications substantially affecting the procurement within the meaning of the international trade agreements. Destroying the evaluators' worksheets is a breach of the international trade agreements. Although no similar provision exists in the Canadian Free Trade Agreement (CFTA) or Agreement on Internal Trade (AIT), the maintenance of complete documentation is also essential under the CFTA and AIT to promote fair and open procurement procedures. Contracting officers can also refer to the Treasury Board Directive on Recordkeeping.

5.40 Technical Evaluation of Bids

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  1. The client department is responsible for the technical evaluation of the bids.
  2. Following the completion of the technical evaluation, the client department must provide a report to the contracting officer detailing the results of the evaluation, including details on all non-responsive bids and the reasons for declaring them non-responsive. Each person who participated in the technical evaluation as an evaluator must sign the report.
  3. Complete documentation, including all notes, worksheets, etc. made during the processing or evaluation of the bids must be retained, for future reference, on the PWGSC procurement file.

5.40.1 Evaluation of Technical Mandatory Criteria

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  1. Mandatory criteria are assessed on a simple pass/fail basis. Bids that fail to meet any of the mandatory criteria will be considered non-responsive.
  2. The reasons for declaring a bid non-responsive must be clearly documented by the contracting officer in the procurement file.

5.40.5 Evaluation of Technical Rated Criteria

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  1. Only bids that meet the mandatory criteria will be subject to point rating, as applicable. Rated criteria are used to assess various elements of the technical bid so that the relative merits of each bid can be determined. The maximum points that can be achieved for each rated criterion must be specified in the bid solicitation.
  2. When point rating is used, bids may have to achieve a minimum number of points overall to be considered responsive, and often they must also achieve a minimum number of points for certain individual criteria. Bid solicitations must clearly identify any mandatory minimum thresholds.
  3. Over the years, there have been numerous complaints to the CITT alleging that the scoring against individual criteria was unfair. In the majority of cases however, the CITT has said that it cannot undertake a re-weighting of the points assigned unless the treatment of the bid under review amounts to a denial of fair treatment. In the absence of evidence that the evaluation was not conducted in a fair manner, the CITT will generally defer to the judgment of the evaluators who are best qualified to assess the merits of the bids. The CITT will intervene however if it feels that the evaluators improperly applied the evaluation criteria and methodology set out in the bid solicitation.

5.45 Financial Evaluation of Bids

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  1. PWGSC is responsible for the evaluation of the financial portion of the bids. PWGSC does not provide client departments with price information during the technical evaluation process to ensure its integrity. Pricing information should only be provided to the client following the completion of the technical evaluation.
  2. Under the following circumstances, more than one PWGSC employee must be involved in the evaluation of the bid prices to ensure an appropriate level of checks and balances, and to ensure that, in terms of price, the bids are ranked properly, in accordance with the bid solicitation:
    1. for any competitive procurement requiring contract entry approval of the Minister, the Assistant Deputy Minister or Treasury Board; and
    2. for any procurement which is considered to be sensitive or high-risk.
  3. Contracting officers should also consider having more than one PWGSC employee involved in the evaluation of the bid prices, under the following circumstances:
    1. when the evaluation involves extensive computation or is mathematically complex; and
    2. for standing offers (SO) and supply arrangements (SA) requiring the approval of the Assistant Deputy Minister.
  4. All PWGSC employees involved in evaluating the bid prices must sign the financial evaluation report.

5.45.1 Formal Peer Review Process

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  1. The peer review is intended to provide an oversight and risk management role within the competitive process results. This review is to ensure that the evaluation and contractor selection were conducted in accordance with the solicitation, and to confirm no anomalies or potential issues exist which could impede the principles of fairness, openness and transparency of the procurement process.
  2. For Complexity Level 2 and 3 procurements, the requirement for a peer review is determined by the results of the procurement risk assessment.
  3. For Complexity Level 4 and 5 procurements, a peer review is mandatory.
  4. Peer reviewers must initial and date the evaluation report to confirm that such a review has taken place.
  5. The accountability of the procurement remains with the contracting officer responsible for the requirement; there is no transfer of responsibility.
  6. The decision of who will conduct the peer review will be determined at the procurement strategy phase when seeking approval in accordance with the risk assessment tool or at the discretion of the approval authority.
  7. Should issues arise during the peer review process, the contracting officer and the peer reviewer(s) should make every effort to resolve them. In the event that a resolution cannot be achieved, the matter will be escalated to one designated level above the contracting officer for resolution.
  8. The time required to conduct a peer review will be determined between the contracting officer and the peer reviewer(s); however, such review should not exceed two business days.
  9. Informal peer reviews may also take place at the discretion of the contracting officer or the applicable approval authority.

5.45.2 Provincial Taxes

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Except as provided by law, departments and agencies are not required to pay any provincial sales tax (PST) payable to the province in which the taxable goods or services are delivered, except for reimbursement of actual costs which include PST (e.g. PST on actual travel and living expenses incurred during the performance of the contract). Federal departments are required to pay the Harmonized Sales Tax (HST). For further details, consult the relevant section of the Standard Acquisition and Clauses (SACC) Manual general conditions (e.g. section 11 of 2010A or section 13 of 2035).

5.45.5 Foreign Taxes and Canadian Customs Duties

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  1. Customs duties must be considered in the evaluation of bids when bids are received from both Canadian-based and foreign-based bidders, since foreign-based bidders exclude duties in their bids. When rates of duties or exemption status need to be verified, the contracting officer may:
    1. obtain from the client department the information on the rate of duty applicable to the goods being imported, and add the estimated amount of duties to the price quoted by the foreign-based bidder; or
    2. verify with the Canada Border Services Agency (CBSA) the application of customs duty to the goods being imported.
    The tariff and value administrator at the CBSA will provide a written ruling to any request for rate of duty, tariff classification, or customs value. Importers or their agents who wish a written ruling must send their request to the nearest CBSA office.
  2. Contracting officers are responsible for verifying the application of excise taxes and the amount and specific rate(s) set out in bids. Contracting officers must evaluate bids exclusive of the Goods and Services Tax (GST) or the HST, as applicable. For the list of goods on which excise tax is payable, see Annex 4.5: Goods Subject to Excise Tax.
  3. Clients may be entitled to exemption from taxes or duties. They should, in such cases, refer to a certificate of exemption or remission or drawback Order in Council. Issues relating to such remissions should be resolved between the client department and CBSA.

5.45.10 Transportation Costs

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All goods requirements with an estimated value of $25,000 or more, including Goods and Services Tax/Harmonized Sales Tax (GST/HST), and with transportation costs exceeding $7,500 must be submitted to the Traffic Management Directorate (TMD) for a detailed analysis of the charges subject to the exceptions of 4.60 Transportation Costs. TMD will provide an analysis and recommendations regarding the proposed transportation method(s) and costs within two working days or advise the contracting officer of any delay.

5.45.15 Bids in Foreign Currency

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Unless the bid solicitation specifically requires bids to be made in Canadian currency, bids that are made in a foreign currency must be converted to Canadian currency for evaluation. The Bank of Canada rate published by 16:30 ET on the bid closing date, or on another date specified in the bid solicitation, must be applied as a conversion factor to the bids made in foreign currency.

5.45.20 Exchange Rate Fluctuation

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This section has been removed in Version 2013-7 of the Supply Manual to be incorporated within section 4.65 Exchange Rate Fluctuation Risk Mitigation.

5.50 Selecting the Successful Bidder

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The successful bidder must be selected in accordance with the methodology specified in the bid solicitation.

5.55 Rejection of Bids/Offers/Arrangements

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5.55.1 Role of the Contracting Officer

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  1. The contracting officer is not to evaluate bids/offers/arrangements received from a vendor if the vendor is subject to a VPCM relevant to the procurement.  (Bids include bids for contracts under supply arrangements.)
  2. A standing offer must be set aside for a vendor that is subject to a relevant VPCM.
  3. A decision to reject a bid/offer/arrangement because of a VPCM can be made at any time up to the awarding of a contract or the issuance of a standing offer or a supply arrangement. VIM is to be checked for a VPCM at closing for competitive solicitations and prior to contact for sole sourcing. In addition, VIM is to be rechecked prior to the awarding of a contract or the issuance of a standing offer or a supply arrangement.
  4. When accessing the VIM file on a bidder/offeror/supplier, the contracting officer will have a clear notice of any VPCM. The Automated Buyer Environment (ABE) will not interfere with the awarding of a contract or the issuance of a standing offer or a supply arrangement to a bidder/offeror/supplier subject to a VPCM. Therefore, it is up to the contracting officer to verify whether the vendor is subject to a VPCM.

5.55.5 Authority to Reject a Bid/Offer/Arrangement

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The authority to reject a bid/offer/arrangement, under the applicable section entitled Rejection of Bid of the Standard Acquisition Clauses and Conditions Manual Standard Instructions 2003, 2004, 2006, 2007, and 2008, rests with the contracting officer responsible for evaluating the bids/offers/arrangements, except that in the case of bids/offers/arrangements being considered for rejection in accordance with 1.(c), 1.(d), 1.(f)(i), and 1.(f)(ii), the authority to reject a bid/offer/arrangement rests with the appropriate director general.

5.55.10 Notice to the Bidder/Offeror/Supplier

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  1. Notice of intent to reject a bid/offer/arrangement under the applicable sections mentioned in 5.55.5 Authority to Reject a Bid/Offer/Arrangement should be given by telephone, and followed by confirming facsimile or letter. Notice of intent is considered to have been received by the rejected bidder/offeror/supplier at the time of the telephone call. The person making the call should note on the file the date and time of the call, and the person spoken to.
  2. The notice of intent must set out the facts and the reasons for the decision to reject the bid/offer/arrangement. However, when a bid/offer/arrangement is being rejected in accordance with 1.(a) or (b) of the applicable section  of the SACC Manual standard instructions because of a VPCM that is in place, it is sufficient to reference that VPCM.

5.55.15 Review

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  1. A bidder/offeror/supplier, except a bidder/offeror/supplier excluded in accordance with 1.(b) of the applicable section of the SACC Manual standard instructions, may request that the decision to reject the bid/offer/arrangement be reviewed by the Assistant Deputy Minister, Acquisitions Branch (ADM/AB). It is entirely in the ADM/AB's discretion whether the bid evaluation and contract award process will be held up in order to grant more time to review the decision.
  2. A review by the ADM/AB will result in an investigation, and a decision. Such a decision can have an effect beyond the particular procurement from which the bidder/offeror/supplier has been rejected. When the decision has been made, the bidder/offeror/supplier must be informed of the results, in writing.

5.60 Financial Capabilities of Contractor

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5.60.1 Financial Capability

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  1. The bidder must have the financial capability to fulfill the requirement.
  2. Treasury Board (TB) Policy states "firms considered qualified are those which have the technical, financial and managerial competence to discharge the contract. Contracting officers are responsible for verifying this information, prior to entering into a contract".
  3. Contracting officers must consult with the Cost and Price Analysis Group in the Policy, Risk, Integrity and Strategic Management Sector, during the evaluation of bids/offers/arrangements, to determine what financial information may be required from the Bidder/Offeror/Supplier.
    1. When a financial opinion is required, the following Standard Acquisition Clauses and Conditions (SACC) clauses should be used, A9033T for bid solicitations, M9033T for request for standing offers (RFSO) and S0030T for request for supply arrangements (RFSAs).”
    2. Supply arrangement authorities should note that since the statement of work or requirement cannot be adequately defined in advance, only a preliminary review of the supplier's financial viability will be conducted for the sole purpose of pre-qualifying suppliers for supply arrangements. A complete review of the bidder's financial capability may be required for subsequent requirements issued under the supply arrangement, therefore, supply arrangement authorities must include clause A9033T in all bid solicitation documents. For more details on supply arrangements, see 4.10.25 Request for Supply Arrangements.
  4. If the selection of the bidder is competitive and the contract is for commercially available goods or services, the risks of financial loss to Canada are minimized because of the ability to find alternate sourcing. However, under any other circumstance, re-sourcing can be costly both in terms of performance delays and monetary risk.
  5. Assessing the financial capability of potential and existing suppliers is not normally required for:
    1. assistance contracts on behalf of Industry Canada (IC), (determination of a contractor's financial capability in these cases is the responsibility of IC);
    2. contracts with universities and colleges, Crown corporations, government departments and agencies;
    3. contracts for the services of individuals; and
    4. contracts for generally available commercial goods or services from bidders selected by competition.
  6. A financial analysis of a potential supplier may be warranted at the time of sourcing.
  7. A financial review of a supplier can be initiated at any stage of the contracting process when considered necessary by the contracting officer. The contracting officer should arrange for ongoing financial capability analysis by a cost analyst during contract performance, when necessary.
  8. When PWGSC must deal with a financially weak supplier, the risk to Canada must be reduced as much as possible through contract financial security, based on recommendations by a cost analyst.
  9. Request for Financial Reviews must be submitted by completing form PWGSC-TPSGC 603 (PDF Version 40 KB)The information is only accessible to federal government department and agency employees. - (Help on File Formats).

5.60.5 Bid security (financial)

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  1. If bid security is obtained, it must be held until the terms of the security are fulfilled, including award of a contract and/or expiration of the bid validity period.
  2. If a bidder submits a bid, which includes insufficient security, that is, less than the exact financial security stipulated, or none at all, the bid will be considered non-responsive.
  3. Security deposits in the form of government guaranteed bonds with coupons are not acceptable unless all coupons that are not matured at the time the security deposit is provided are attached to the bonds.
  4. Surety bonds provided by bidders must be examined by the contracting officer, with advice from Legal Services, as necessary, to ensure that they are correct, original, and legally enforceable in all respects; including the bidder's legal name and address, the date of the contract, the contract serial number, and the description of the "Obligee", which is "Her Majesty the Queen in right of Canada". Surety bonds requiring correction are returned to the bidder and not to the surety company.
  5. PWGSC will hold any bid bond, payment bond, performance bond, non-negotiable security deposit (government guaranteed bonds, bills of exchange, irrevocable standby letters of credit) until the terms of the security are fulfilled. For detailed instructions on the safekeeping of these instruments, see Annex 5.2: Handling, Custody and Safekeeping of Financial Security/Handling of Bills of Exchange.
  6. The contracting officer must request written instructions from the bidder concerning the action to be taken with respect to any coupons attached to the bonds that will mature while the bond is pledged as security, and the instructions must be forwarded to the Financial Operations Sector.
  7. The contracting officer must examine the letters of credit submitted by bidders and obtain advice from Legal Services, as necessary, to ensure that each letter is correct in all respects, including:
    1. the face amount that may be drawn against it;
    2. its expiry date;
    3. provision for sight payment to the Receiver General for Canada by way of the financial institution's draft against presentation of a written demand for payment signed by the authorized departmental representative, and identified in the letter of credit by their office;
    4. provision that more than one written demand for payment may be presented subject to the sum of those demands, not exceeding the face amount of the letter of credit;
    5. provision that it is subject to the International Chamber of Commerce (ICC) Uniform Customs and Practice for Documentary Credits , 2007 Revision, ICC Publication No. 600;
    6. clear specification that it is irrevocable or deemed to be irrevocable, pursuant to the ICC Uniform Customs and Practice for Documentary Credits, 2007 Revision, ICC Publication No. 600;
    7. issuance or confirmation, in either official language, by a financial institution, which is a member of the Canadian Payments Association (Payments Canada) and must be on the letterhead of the Issuer or Confirmer. The format is left to the discretion of the Issuer or Confirmer.

5.60.10 Business credit services

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  1. Business credit services companies provide both general credit ratings and comprehensive credit reports on individual firms. Their comprehensive reports generally include: simplified financial statements; details of maximum credit obtained from the firm; promptness of payments made; banking information; firm's history and some information into the firm's operations.
  2. Contracting officers are not to contact a business credit services company directly. They must send all requirements for business credit services to the Price Support Directorate (PSD).
  3. Business credit services reports are considered commercially confidential. The information is not to be disclosed outside the government, and is only disclosed within the government on a "need to know" basis.
  4. Copies of these reports are available for use only within PWGSC. The reports are retained by PSD.

5.60.15 Statement of Cost Accounting Practices

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This section is removed from the Supply Manual as it no longer reflects Canadian Government practices.

For reference purposes, section 5.60.15 is available in the Supply Manual ArchiveThe information is only accessible to federal government department and agency employees., Version 2017-5.

5.65 Identical Low Bids - Best Value

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  1. If identical low bids are received, the Treasury Board Contracting Policy (subsection 10.8.17) provides that the contract should be awarded on the basis of best value. The factors below should be used, subject to directives on national policies and objectives that may be issued from time to time. These criteria may be weighted as considered appropriate by the contracting officer:
    1. a bidder with an overall satisfactory performance record is given preference over a bidder known to have a less satisfactory performance record;
    2. a bidder in a position to provide adequate after-sales service, with a good record in this regard, will be given preference over a bidder who is less able to provide adequate service or who has a poor record;
    3. when delivery is an important factor, the bidder offering the best delivery date should be given preference;
    4. when there are several items included in the bid and only some items are priced identically, the bid offering the greatest dollar value should be given preference; and
    5. when there are several items included in the bid and one or more bidders bid lower on one or more of the items, the lowest bidder with the greatest dollar value should be given preference both for the items on which it bid equal prices and for the items on which it bid lower.
  2. If there are two (or more) identical bids, and provided that the bid selected would still be considered the most advantageous to Canada, preference should be given to the bidder who assumes all or part of the exchange rate adjustment risk over a bidder who does not assume any of this risk. Furthermore, preference should be given to the bidder who assumes all of the exchange rate adjustment risk over a bidder who assumes only part of this risk.
  3. If none of the above applies, a method of tie breaking that is mutually acceptable to Canada and the bidders with identical bids can be used. As an example, a simple coin toss could be agreed upon. The mutually agreed solution should involve legal advice.

5.70 One responsive bid

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  1. One Responsive Bid Greater than $1,000,000
    1. When only one responsive bid is received in response to a competitive bid solicitation, to satisfy that Canada is obtaining fair value, the contracting officer must contact a cost analyst to determine if further analysis is warranted as specified by the mandatory conditions set out in the Directive on the Use of Cost and Price Analysis ServicesThe information is only accessible to federal government department and agency employees. (PDF). Once the contracting officer has determined that the bid represents fair value to Canada, the contract may be awarded using competitive authorities to the single responsive bidder.
    2. If the contracting officer is not satisfied that the bid represents fair value, the contracting officer may consider negotiating or cancelling and reissuing the bid solicitation.
  2. One Responsive Bid Less than or Equal to $1,000,000
    1. When only one responsive bid is received in response to a competitive bid solicitation, to satisfy that Canada is obtaining fair value, the contracting officer should consider using the services of a cost analyst to determine if further analysis is required (refer to the Guideline on the Use of Cost and Price Analysis ServicesThe information is only accessible to federal government department and agency employees. (PDF)). Once the contracting officer has determined that the bid represents fair value to Canada the contract may be awarded using competitive authorities to the single responsive bidder.
    2. If the contracting officer is not satisfied that the bid represents fair value, the contracting officer may consider negotiating or cancelling and reissuing the bid solicitation.
  3. One Responsive Bid from Foreign Contractor

    When only one responsive bid is received in response to a competitive solicitation, and that bid is from a supplier in a North Atlantic Treaty Organization (NATO) allied country, or a significant portion is being proposed to be subcontracted to a supplier in a NATO-allied country, to satisfy that Canada is obtaining fair value, the contracting officer should consider using the services of the foreign supplier's country's government to conduct an assessment of the fairness and reasonableness of the bid. This service can be called up by submitting a request through the Price Support Directorate (PSD). More information on this service is provided at 9.56 Price certifications and audits of foreign contractors.

5.75 No Responsive Bids

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When no responsive bid is received as a result of a competitive bid solicitation, the bid solicitation must be cancelled. For more information on reissuing a solicitation, see 4.100 Cancelling and Reissuing a Solicitation.

5.80 Bid Rigging/Collusion/Fraud

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The contracting officer must notify Legal Services and his or her immediate director whenever there is an indication of possible bid-rigging activities, collusion or fraud. When it is considered necessary, Legal Services will assist in subsequent discussions with Competition Bureau Canada,a federal independent law enforcement agency responsible for the administration and enforcement of the Competition Act. Bid rigging is addressed in section 47 of the Act.

The following are examples of possible bid-rigging activities:

  1. bid rates/prices are much higher than published price lists, engineering cost estimates, or previous bid rates/prices by the same suppliers, for no apparent reason;
  2. the successful bidder subcontracts work to suppliers who submit higher bids on the same project;
  3. bidders use identical wording to describe non-standard items, or submit identical bids for non-standard items;
  4. there are indications of unusual communications among suppliers, before submitting the bids with regards to bid prices, or allocation of clients, or references to "standard industry prices", "industry self-regulation", etc.;
  5. the same supplier wins bids for specific clients, or in specific geographic locations, or for specific sizes or types of work, and loses most other bids on a regular basis; or
  6. a recognizable pattern of systematic or random low bid rotation exists.

5.85 Negotiations

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  1. When two or more responsive bids are received in response to a competitive bid solicitation and if no responsive bid represents fair value, contracting officers should examine the solicitation to determine possible causes. Subsequently, the contracting officer may consider negotiating with all responsive bidders or cancelling and reissuing the bid solicitation.
  2. Subsection 10.6.6 of the Treasury Board Contracting Policy states: "when negotiating with more than one firm, care should be taken that all are treated fairly and impartially. The negotiations should not become an auction of the contract, as firms progressively improve their bids in the light of information about the position of other firms. The confidentiality of each firm's negotiating position is to be assured".
  3. The contracting officer must conduct all negotiations. If it is of a technical nature, the contracting officer and the client should conduct the negotiations. A negotiation report must be placed on the procurement file.
  4. For procurements subject to the international trade agreements contracting officers must conduct negotiations in accordance with the conditions of these agreements. See Article 1014: Negotiation Disciplines in Chapter 10 of the North American Free Trade Agreement, Article 19.11: Negotiation of the Canada-European Union Comprehensive Economic and Trade Agreement or Article XII: Negotiation of the World Trade Organization Agreement on Government Procurement, or Article 512: Negotiation of the Canadian Free Trade Agreement. The various bilateral free trade agreements have similar rules to NAFTA.
  5. For procurements not subject to NAFTA, CETA, WTO-AGP, or CFTA,
    1. when a bid solicitation was used, negotiations may be entered into:
      1. before the completion of bid evaluation, provided that they are held with all bidders that submitted responsive bids; or
      2. after the bid evaluation, with only one bidder, provided that the bidder submitted the only responsive bid. Or, the bidder was selected after evaluating more than one responsive bid, but it can be demonstrated that if the negotiations had been held with all of the bidders that submitted responsive bids, there would have been no change in the bidder selected;
      The ability to prove that the same bidder will be selected, regardless of whether negotiations are conducted with all responsive bidders, presupposes that the requirement (for example, technical specifications) will not change during negotiations and, therefore, that other bidders given the same opportunity could not submit different or better offers.
    2. when an Invitation to Tender (ITT) was used and there is more than one responsive bid, but neither the lowest bid nor the other bids represent fair value, the contracting officer must have determined, before considering entering into negotiations, that it would not be more effective to cancel the solicitation and meet the requirement using another method of supply. When urgency is a major factor, the results of the original ITT might be capable of being used as the basis for entering into negotiations with bidders; and
    3. when a Request For Quotation was used, negotiations should be avoided.

5.90 Extending the Bid Validity Period

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  1. Bids will remain open for acceptance for a period of 60 days (30 days for construction), from the closing date of the bid solicitation, unless otherwise indicated in the bid solicitation (see Standard Acquisition Clauses and Conditions Manual, (SACC) Standard Instructions 2003, 2006, and 2008). Contracting officers must carefully assess the potential for extended bid evaluation periods and indicate in the bid solicitation the modified period for bid acceptance. Contracting officers must also carefully monitor events during the bid evaluation period and contract approval process in order to award the contract before the bid acceptance period has expired. Expiry of bid acceptance periods before contract award should thus become an exceptional circumstance.
  2. If the bid acceptance period has expired, and the contract has not been awarded, the bid solicitation must be reissued.
  3. Any contract awarded to a bidder after the bid expiry date is considered a sole-source contract, and must be justified accordingly.
  4. If the evaluation is incomplete and is unlikely to be completed within a reasonable period of time, and the bid acceptance period will expire before the evaluation is complete, the process should be halted and an assessment made to identify the cause of the delay. Any necessary corrections to the solicitation or evaluation methodology may then be made and the bid solicitation reissued.
  5. As stated in the standard instructions, Canada may seek an extension of the bid validity period from all responsive bidders in writing within a minimum of three (3) days before the end of the bid validity period. If all responsive bidders accept the extension, Canada will continue with the evaluation of the bids. If all responsive bidders do not accept the extension, Canada will, at its sole discretion, either continue with the evaluation of the bids of those who have accepted the extension or cancel the solicitation.
  6. Where a bidder does not agree to the extension and it is clear that this particular bidder has no chance of being recommended for award, then it may be appropriate to exercise Canada's right to proceed with the evaluation of only those bids submitted by the bidders that have agreed to an extension. Legal Services may be consulted in instances where a bidder does not agree to the extension, particularly in the case of procurements subject to the trade agreements.

5.95 Evaluating Joint Venture Bids

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  1. Joint ventures may respond to bid solicitations in accordance with the applicable conditions contained in the solicitation. The relevant section of standard instructions 2003, 2006 and 2008 of the SACC Manual permits joint venture bids and provide further details.
  2. If a contract is awarded to a joint venture, all members of the joint venture will be severally liable for the performance of any resulting contract. (See standard instructions referenced above.)
  3. If a financial capability assessment is done, then all members of the joint venture will be assessed.

5.100 Special Program Considerations

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In the evaluation of bids, consideration must, as applicable, be given to various programs such as Canadian content, green procurement and the Federal Contractors Program for employment equity. Employment equity requirements are described in Annex 5.1: Federal Contractors Program for Employment Equity.

5.105 Evaluation Report

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  1. An evaluation report must be prepared outlining in detail the review of the bids, including any clarifications requested and how the final decision was taken to rank and select the bidders.
  2. The evaluation report should include the evaluation criteria, the rationale of mandatory and point-rating for each criterion, as well as the names and contact information of all evaluators.
  3. All persons involved in evaluating the bids must sign the evaluation report.
  4. All notes taken during the evaluation must be kept in their original form and retained on the procurement file for audit purposes.

Some sectors/regions have developed checklists to assist contracting officers in the tabulation of bids. They should be used where available.

5.110 Communications before Contract Award

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  1. Before contract award, contracting officers must advise suppliers that, if they are non compliant to the requirements of the Federal Contractors Program for employment equity, they will not be awarded a contract except in limited circumstances. See Annex 5.1: Federal Contractors Program for Employment Equity for specific exemptions on ship construction and refit.
  2. Particular care is required where bid validity period may require extension. (See 5.90 Extending the Bid Validity Period.)
    Note: No information about other bids may be released. Disclosure of information after contract award is covered in 7.45 Disclosure of Information.

5.110.1 Early Notification for Ship Construction and Refit

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  1. For new ship construction and ship refit contracts awarded by Public Works and Government Services Canada headquarters, contracting officers will notify bidders whether their bid is among the two most favorable and responsive when:
    1. there are more than two responsive bidders;
    2. a lengthy approval process is anticipated (generally for contracts requiring approval above the director general level); and,
    3. none of the following circumstances apply:
      1. all bids received are extremely close; or
      2. the manager feels that notifying bidders of bid status would not be in the best interests of Canada.
  2. For shipbuilding or ship refit contracts that do not fall within the normal criteria, contracting officers should consult with the Senior Director, Marine Systems Directorate (SD/MSD), Defence and Major Projects Sector.
  3. Early notification before contract award can only be made after the SD/ MSD has recommended the "Contract Request" form PWGSC- TPSGC 1151-2The information is only accessible to federal government department and agency employees..
  4. Bidders will be advised of the circumstances under which notification of their status may be withheld.
  5. Bidders whose bids are clearly not the two most favourable responsive bids will be permitted to withdraw their bids upon written application to the contracting officer.

Annex 5.1:  Federal Contractors Program for Employment Equity

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  1. Background
    The Federal Contractors Program (FCP) for employment equity is intended to address employment disadvantages for the four designated groups: women, Aboriginal peoples, persons with disabilities and members of visible minorities. Its goal is to achieve equality so that no person is denied employment opportunities for reasons unrelated to ability.
    In June 2013, a streamlined FCP was introduced with a focus on results and enables contractors to determine which initiatives best suit their organization in their efforts to achieve employment equity objectives. The Program threshold is $1,000,000 and the ineligibility sanctions apply to all contracts for the acquisition of goods and services.
    The requirements of the FCP are set out in the Treasury Board Contracting Policy (sections 4.2.5 and 8.3.1, and Appendix D).
    General information on the FCP is available on the Employment and Social Development Canada (ESDC)-Labour Program website.
  2. Application
    1. The FCP for employment equity applies to:
      1. procurements made on behalf of a federal department or agency listed under Schedule I, column I of Schedule I.1 or Schedule II of the Financial Administration Act (FAA) (for example, the Canadian Commercial Corporation, being listed in Schedule III, is not subject to the FCP) and who are covered by the Treasury Board Contracting Policy; and
      2. all contracts and standing offers for the acquisition of goods and services, with the exception of those for:
        1. the purchase or lease of real property;
        2. construction (construction does not include architecture and engineering which are subject to the FCP).
    2. The FCP imposes particular obligations onto Contracting/Standing Offer Authorities and Contractors when:
      1. contractors are to be awarded contracts estimated at $1,000,000 or more (including all applicable taxes and not including options) or issued a Standing Offer (SO) where the call-up limitation is $1,000,000 or more (including all applicable taxes);
      2. a bidder/offeror:
        1. is not regulated by the Employment Equity Act (for example, provincially regulated entities, entities registered in foreign countries, etc.);
        2. has a combined workforce in Canada of 100 or more permanent full-time and/or permanent part-time employees;
        3. is doing business directly with Canada (being the prime contractor with Canada and not a subcontractor).
  3. Obligations of Contractors subject to the FCP for Employment Equity
    1. A bidder/offeror who is subject to the FCP, must have an Agreement to Implement Employment Equity (AIEE) in place with ESDC-Labour Program or must complete and sign an AIEE form and send to ESDC-Labour Program before contract award or issuance of a standing offer.
    2. If the bidder/offeror is a joint venture, each member of the joint venture must determine if it is subject to the FCP and if so, comply with the requirements to have an AIEE in place as per subsection a. above.
    3. Once a bidder/offeror subject to the FCP is awarded a contract or issued a standing offer for call-ups estimated at $1,000,000 or more, the contractor/offeror is required to honour its AIEE commitment to implement employment equity. This commitment is ongoing and not simply for the period of the contract or the standing offer for which it was initially signed.
  4. Obligations of Contracting/Standing Offer Authorities
    Once it has been determined that the client department or agency and the nature of the requirement are subject to the Federal Contractor’s Program (FCP), the Contracting/Standing Offer Authorities should request and obtain from the bidders/suppliers, as appropriate, the necessary evidence of compliance with the FCP, namely a valid and current Agreement to Implement Employment Equity (AIEE) duly signed by an authorized executive of the company or a valid AIEE number issued by Employment and Social Development Canada – Labour (ESDC – Labour). The accuracy of the AIEE number can be confirmed by comparing it with the number listed for that organization/bidder in the FCP List of Certified Employers on the Federal Contractors ProgramThe information is only accessible to federal government department and agency employees. page.
    Contracting/Standing Offer Authorities have, under the FCP for employment equity, different sets of obligations depending on the nature of the procurement document and the estimated value of the resulting contracts or call-ups against a standing offer (including all applicable taxes).
    1. Request for Supply Arrangement (RFSA)
      For an RFSA, the standard procurement templateThe information is only accessible to federal government department and agency employees. should include an advance notice (Part 6 B – Resulting contract clauses) to inform suppliers of the possibility that the FCP may eventually apply to the procurement documents to be issued from the Supply Arrangements.
    2. Contracts estimated at under $1,000,000
      For contracts estimated at under $1,000,000 (including all applicable taxes and not including options) and Standing Offers with a call-up limitation for either PWGSC or a client department under $1,000,000 (including all applicable taxes):
      1. In Standing Offers, the "Limitation of Call-ups" clause of Part 7A– Standing Offer is to indicate an amount under $1,000,000.
      2. All bid solicitation documents and Requests for Standing Offers are to include a certification by the bidder/offeror, as proposed in Part 5 of the standard procurement templates, declaring that the bidder/offeror is not listed on the FCP Limited Eligibility to Bid list on the Federal Contractors ProgramThe information is only accessible to federal government department and agency employees. page. (For exceptions, see article 5 of this Annex.)
      3. At the time of contract award/issuing of a Standing Offer, the Contracting/Standing Offer Authority is to verify the accuracy of such certification using ESDC-Labour Program’s FCP "Limited Eligibility to Bid" list based on the names appearing on the bid/offer. If the name of the bidder/offeror, or even only one name within a bidder’s/offeror’s list of members if the bidder/offeror is a joint venture, appears on the list then the bid/offer is non-responsive.
      4. In Standing Offers, the "Certifications" clause of Part 7A– Standing Offer, is to indicate that if the offeror gets listed by ESDC-Labour Program on the "FCP Limited Eligibility to Bid" list for not complying with employment equity requirements during the period of the Standing Offer, the standing offer may be set-aside. The Policy, Risk, Integrity and Strategic Management Sector will inform Standing Offer Authorities if any offeror gets added to the "FCP Limited Eligibility to Bid" list. In such circumstances, the Standing Offer Authorities will follow the usual PWGSC’s setting-aside assessment procedures which include consideration of the elements listed under article 5 of this Annex.
      5. In a competitive process, where multiple bids/offers have been received, the bidders/offerors will be considered non-compliant if the bidder's/offeror's name is on the "FCP Limited Eligibility to Bid" list. In such a competitive process, Contracting/Standing Offer Authorities should consider verifying if the bidder’s/offeror’s name is on the list prior to beginning the evaluation process so as to avoid unnecessary work for themselves and their clients. There is no requirement to evaluate bids that are non-responsive.
    3. Contracts estimated at $1,000,000 or above
      For contracts estimated at $1,000,000 or above (including all applicable taxes and not including options) and Standing Offers with a call-up limitation for either PWGSC or a client department at $1,000,000 or above (including all applicable taxes):
      1. The obligations mentioned at paragraphs i. to iv. of subsection b. above are also applicable to contracts estimated to be at $1,000,000 and above (including all applicable taxes and not including options) and Standing Offers with call-up limitations at $1,000,000 and above (including all applicable taxes);
      2. Contracting/Standing Offer Authorities are to include a second certification, this time regarding factual information on the bidders/offerors, as shown in Part 5 - Certifications of the standard procurement templates and in the titled Federal Contractors Program for Employment Equity - Certification. This second certification is also required at the time of contract award/issuing of a Standing Offer. The information collected is to be used by the Contracting/Standing Offer Authority to determine if the bidders/offerors are subject or not to the FCP and consequently to determine which clauses to include or not into the procurement document.
        1. When the bidder/offeror is not subject to the FCP, there will be no other clauses to add to the procurement document.
        2. When the bidder is subject to the FCP, a clause allowing for the termination of the contract in the event that the bidder would become in breach to the AIEE and be added to the "FCP Limited Eligibility to Bid" list, is to be inserted, as indicated in the standard procurement templates. If such event was to occur, the Contracting Authorities would then follow the usual PWGSC’s termination assessment procedures, which includes consideration of the elements listed under article 5 of this Annex.
        3. As indicated in paragraph iv. of subsection b. above, all Standing offers are to include a clause allowing for the set-aside of a Standing Offer in the event that the offeror would become in breach of the AIEE and be added to the "FCP Limited Eligibility to Bid" list. When the offeror is subject to the FCP and call-ups are estimated to be at $1,000,000 and above, an additional clause allowing for the termination of the call-up is also to be inserted as indicated in the standard procurement templates. For call-ups at $1,000,000 or above if a breach was to occur, the Standing Offer Authorities would then follow the usual PWGSC’s termination assessment procedures, which includes consideration of the elements listed under article 5 of this Annex. There is no such requirement for call-ups under $1,000,000 (including all applicable taxes).
  5. Exceptions
    1. In a non-competitive situation, if a bidder’s/offeror's name appears on the "FCP Limited Eligibility to Bid" list, such bidder/offeror should not be awarded a contract or issued a standing offer unless required to do so by law or legal proceedings, or when Canada considers it necessary to the public interest for reasons which include, but are not limited to:
      1. Only one person is capable of performing the contract/standing offer
      2. Emergency
      3. National security
      4. Health and safety
      5. Economic harm
    2. The Contracting/Standing Offer Authority is to obtain prior approval from its Director General or its Regional Director General and document its file. The Contracting/Standing Offer Authority should communicate an exception to ESDC-Labour Program at ee-eme@hrsdc-rhdsc.gc.ca.

Annex 5.2: Handling, Custody and Safekeeping of Financial Security/Handling of Bills of Exchange

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  1. A bill of exchange tendered as a security deposit in connection with a bid for a contract must be held uncashed in a secure and fireproof place until the successful bid is selected or for up to one year, whichever occurs first. (If at the end of one year the contract still has not been awarded, the contracting officer must exchange the bill of exchange for a current-dated one.) The Bid Receiving Unit (BRU) sends security deposits received with headquarters bids to the Finance Sector, Public Works and Government Services Canada (PWGSC), for safekeeping. The BRU sends three copies of the list together with the deposits to the Finance Sector, showing beside the name of each bidder, the amount and nature of the deposit (for example, certified cheque, bonds). The Finance Sector signs and returns two copies of the list to the BRU, who sends one copy to the contracting officer.
  2. When a bid is accepted and the bill of exchange is then required as security until completion of the contract, a contractor may request PWGSC to hold and not cash the bill of exchange. It should be stored in approved security equipment by the directorate. If the directorate does not have adequate facilities, it should be sent to the Financial Operations Directorate (FOD), which will arrange for storage. If the contractor makes no such request, the bill of exchange must be forwarded to the FOD for deposit in the Consolidated Revenue Fund (CRF).
  3. When a bid is rejected or accepted and the bill of exchange submitted in connection with the bid is not required as security until completion of the contract, the bill of exchange is returned to the contractor.
  4. Bills of exchange received as contract security must be forwarded immediately to FOD for deposit in the CRF, in accordance with the Receipt and Deposit of Public Money Regulations.
  5. A security deposit provided as collateral for the return of plans and specifications will be forfeited if those plans and specifications are not returned in time and in satisfactory condition. Furthermore, the contracting officer must so inform the Manager, FOD.
  1. Government Guaranteed Bonds, Bills of Exchange and Letters of Credit
    The Finance Sector must ensure that the receipt of bills of exchange and/or government guaranteed bonds and/or irrevocable standby letters of credit is recorded in the accounting records of PWGSC and that it is also appropriately recorded in the Accounts of Canada, as an asset and a liability. Directorates must promptly notify the Finance Sector of all such receipts, regardless of whether they are held by the directorate.
  2. Safekeeping of Bonds, Negotiable Instruments and Letters of Credit
    1. There are three acceptable methods for the safekeeping of government bonds, negotiable instruments and letters of credit:
      1. custody by FOD, which was established to provide a safekeeping service for securities and any other valuable assets requiring theft-proof storage;
      2. storage by the directorate in approved security equipment, in accordance with Part II of the Government Contracts Regulations; or
      3. storage by the Security Deposit Division, 350 King Edward Ave, Ottawa.
    2. The adequacy of departmental security equipment can be assessed by referring to the PWGSC Security Equipment Catalogue, which lists equipment that is approved for the storage of negotiable instruments. Canadian Industrial Security Directorate assistance is also available on this subject.
    3. Where proper security equipment is not available, all security deposits (government guaranteed bonds, bills of exchange, irrevocable standby letters of credit) must be forwarded to FOD for safekeeping using a PWGSC deposit form entitled "Contractor's Security Deposit".
    4. To lessen the risk of loss, bonds should be transmitted directly to FOD from wherever the contracting authority first receives the security (for example, if a bond is received in a regional office, it should not be routed to Headquarters but sent directly to FOD).
    5. When transmitting bonds from PWGSC to FOD(or to the owner when the securities are held by directorates), registered and hypothecated bonds must be transmitted by registered mail. Bearer bonds may be transmitted by "money packet" or bonded courier, armoured car service or a courier provided from within departmental resources.
    6. When bearer bonds are transmitted by the "money packet" system, the maximum indemnity from Canada Post is $100; therefore, appropriate additional insurance should be considered. (For the examination and management of risks, directorates should refer to the Treasury Board Policy Risk Management - Policies and Publications.)
    7. While coupon-bearer bonds are in its custody, FOD is responsible for their security and for clipping matured coupons and remitting them, as directed by the contracting officer.