5.60. Financial Capabilities of Contractor

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5.60.1 Financial Capability


  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)


  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 "His Majesty the King 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


  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


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.