7.20. Letter of Intent

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  1. When the timely delivery of goods or services would be jeopardized by lengthy negotiations, a Letter of Intent authorizes commencement of the work before the contract is awarded. It is a binding commitment to place a contract with a designated supplier.
  2. Letters of Intent can only be used in exceptional circumstances, and must not be issued without prior approval of the Deputy Minister (DM).
  3. A Letter of Intent is issued subsequent to DM approval of the conditions already agreed to by the proposed contractor, but before obtaining contract approval of all the conditions of the proposed contract.
  4. Letters of Intent are prepared by Legal Services with the cooperation of the contracting officer.
  5. No contractual commitment may be made that would constitute the first step of a procurement that might require subsequent Treasury Board approval.
  6. The Letter of Intent must accurately describe the work authorized, state the maximum liability of Canada, expressed as funds to be spent by the contractor, and specify how the payment will be made. The contract serial number that will be assigned to the subsequent contract must be indicated on the Letter of Intent.
  7. After DM approval is received, the original Letter of Intent must be signed by the appropriate contract signing authority and distributed in the same manner as a contract.
  8. On completion of negotiations of all the conditions of the proposed contract, the contract approval document will be submitted for review and approval at the appropriate level.
  9. The contracting officer must clearly indicate in the contract that the work authorized under the Letter of Intent is not to be duplicated.
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