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Public Services and Procurement Canada

9.40. Procurement Strategy for Indigenous Business

  1. In accordance with the Procurement Strategy for Indigenous Business (PSIB) announced on March 27, 1996 and modified in August 2021, requirements designated by client departments as set aside under PSIB will be restricted to qualified Indigenous businesses.
  2. Even though a procurement is set aside under PSIB, all applicable procurement policies and procedures must be followed.

9.40.1 Decision to set aside a procurement under the Procurement Strategy for Indigenous Business

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  1. The decision to set aside a procurement under PSIB is the responsibility of the client department.
  2. There are two types of PSIB set-asides:
    1. Mandatory Set-Asides:
      1. It is mandatory to set aside a procurement under PSIB if an Indigenous population is the primary recipient or end user of the goods or services being procured and the value exceeds $5,000, provided that operational requirements, prudence, probity, best value and sound contracting management can be assured.
      2. In order for an Indigenous population to be the primary recipient or end user of the goods or services being procured, delivery does not have to be directly to the Indigenous community. For example, goods may be delivered to a government department site and later distributed to Indigenous communities, groups or individuals.
      3. For more information and examples of what constitute a mandatory set-aside under PSIB, please contact Indigenous Services Canada (ISC) by sending an email to: indigenousprocurement@sac-isc.gc.ca
      4. Under ARCHIVED - TBS Contracting Policy Notice 1996-2,
        "Indigenous Population" means
        1. an area, or community in which Indigenous people make up at least 51 percent of the population;
        2. a group of people for whom the procurement is aimed in which Indigenous people make up at least 51 percent of the group.
    2. Voluntary Set-Asides: Client departments may designate any procurement as being restricted exclusively to qualified Indigenous suppliers. Contracting officers should assist client departments in meeting their performance objectives under the program, by drawing their attention to opportunities for voluntary PSIB set-asides, when qualified Indigenous suppliers are known to exist in the marketplace.
  3. When a procurement is set aside under PSIB and no Indigenous business submitted a responsive bid/offer/arrangement, then the solicitation must be reissued, either as a set-aside once again (after the necessary adjustments to the solicitation have been made), or open to all bidders in accordance with the procedures for the applicable trade agreement(s), taking into account the relevant thresholds, and all the related applicable components, which apply to the requirement in the absence of a set-aside. This re-solicitation process will also apply when Indigenous bids/offers/arrangements are received but a contract will not be awarded in order to avoid conflicting with sound contracting principles such as best value, prudence and probity. (See 9.40.25 Sound contracting principles.)
  4. PWGSC will not unilaterally declare a procurement set-aside under PSIB. However, following receipt of a requisition above $5,000, for which an Indigenous population is the primary recipient or end user, but is not designated as a PSIB set-aside, the contracting officer should contact the client department and identify the potential omission. If the client indicates that the procurement is not to be set aside under PSIB, the file should be annotated accordingly, and the procurement may then proceed.

9.40.2 Obtaining advice on the Procurement Strategy for Indigenous Business

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  1. The primary source of policy advice on the Procurement Strategy for Indigenous Business (PSIB) for Public Works and Government Services Canada contracting officers is the Indigenous Procurement Policy Division (IPPD). Contracting officers can contact IPPD by sending an email to TPSGC.PAApprovisionAutochtone-APIndigenousProc.PWGSC@tpsgc-pwgsc.gc.ca.
  2. Contracting officers should share with IPPD any advice on PSIB received from other sources before taking any action, in order to ensure a consistent approach to the implementation of PSIB. As well, any discrepancy in the information gathered by the contracting officer must be brought to the attention of IPPD. Contracting officers must document their files to include any advice received. The approval documents should include the rationale for any key decisions.

9.40.5 Procurement Strategy for Indigenous Business and Comprehensive Land Claims Agreements

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Comprehensive Land Claims Agreements (CLCAs) must not be confused with the Procurement Strategy for Indigenous Business (PSIB). For information on CLCAs, contracting officers should consult section 9.35 Comprehensive Land Claims Agreements (CLCAs). For information on how CLCAs contracting obligations and PSIB interrelate, refer to section 9.35.65 Comprehensive Land Claims Agreements and Procurement Strategy for Indigenous Business.

9.40.10 Procurement Strategy for Indigenous Business and trade agreements

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  1. Canada's free trade agreements pose no impediment to the inclusion of measures for the benefit of Indigenous Peoples and/or businesses in a procurement. This includes setting aside procurements for Indigenous business under the Procurement Strategy for Indigenous Business (PSIB). If a procurement has been set-aside under PSIB, it is no longer subject to the obligations of the trade agreements and no longer falls under the jurisdiction of the Canadian International Trade Tribunal (CITT).
  2. Contracting officers must insert SACC Manual clause A3002T in bid solicitations for procurements that have been set aside under PSIB, when the procurement would have been otherwise subject to one or more trade agreements.

9.40.15 Procurement Strategy for Indigenous Business and Canadian content

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  1. If the value of the procurement is equal to or greater than $25,000, PSIB and the Canadian Content Policy will be applied simultaneously.
  2. In applying the Canadian Content Policy under a set-aside procurement, it must be recognized that there are two levels of certification. The first level of certification will be to qualify the supplier(s) as eligible for consideration, i.e., a supplier must provide certification that it is an Indigenous business.
  3. Having established that the procurement will be conducted as a PSIB set-aside, contracting officers must then apply the Canadian Content Policy in the same manner as any other procurement but in the context of the Indigenous business supplier community. Contracting officers must determine whether there are sufficient eligible firms to carry out the procurement as solely limited (i.e., two or more Indigenous businesses are able to provide Canadian goods or services), conditionally limited (i.e., there may be two or more Indigenous suppliers of Canadian goods or services), or open (i.e., there is an insufficient number of Indigenous businesses able to provide Canadian goods or services; the procurement is open to all Indigenous businesses regardless of the origin of the goods and services supplied). (See 3.130 Canadian Content Policy.)
  4. A bid/offer/arrangement for a set aside procurement, which includes the Canadian content provision, must be reviewed initially to determine whether the supplier has provided the necessary certificate that it is an Indigenous business. Bids/offers/arrangements meeting this basic certification are then assessed according to the stated Canadian content criteria.

9.40.20 Subcontracting plans

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In support of PSIB, client departments may designate that a proportion of subcontracts through open procurement be reserved for Indigenous business, or that non-Indigenous suppliers are to be encouraged through the use of incentives - e.g., additional evaluation points to hire Indigenous businesses as subcontractors. The inclusion of Indigenous businesses as subcontractors must be clearly identified in the solicitation as an evaluation criterion. This is permitted by all of Canada’s free trade agreements.

9.40.25 Sound contracting principles

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Fundamental to all PSIB procurements is the need to adhere to sound contracting principles. Contracting officers must always be cognizant of the principles of best value, prudence, probity, and operational requirements, in planning their procurement strategy for PSIB set-aside requirements.

9.40.30 Notification to Indigenous Services Canada

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  1. Upon receipt and acceptance of a requisition for a PSIB set-aside procurement, contracting officers must inform the Business Development Directorate, Indigenous Services Canada (ISC).
  2. Notification to ISC must be sent, by email, before the release of the solicitation, to:
    Indigenous Services Canada
    Business Development Directorate
    Telephone: 1-800-400-7677
    Email: indigenousprocurement@sac-isc.gc.ca .
    The notification must include the following information:
    1. estimated dollar value;
    2. description of goods/services/construction;
    3. solicitation number;
    4. solicitation closing date; and
    5. buyer (name, and phone/fax numbers).
    In instances of sole source procurements, the notice to ISC must also include the name and address of the potential contractor.
  3. Within 15 working days after contract award, the contracting officer must advise the Business Development Directorate of the name of the contractor, the contract number, and the total estimated value of the contract.

9.40.35 Sourcing of requirements under Procurement Strategy for Indigenous Business (PSIB) set-asides

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  1. Procurements set aside under PSIB may be competitive or non-competitive according to current established government sourcing policies (see details on competitive and non-competitive at 3.10 Competitive Contracting Process and 3.15 Non-competitive Contracting Process.) Indigenous businesses may be invited to submit a bid/offer/arrangement in accordance with Public Works and Government Services Canada (PWGSC) policies and procedures.
  2. Vendor Information Management (VIM) of PWGSC and "SELECT" systems allow for the identification of suppliers that have self-declared as being Indigenous. The information in VIM and "SELECT" collected from supplier registrations and contract awards is useful to identify potential Indigenous businesses for sourcing purposes, and establish source lists, regardless of commodity (goods, services, or construction), which would be subject to rotation regimes such as Automated Vendor Rotation System or "SELECT".
  3. When issuing a solicitation for a standing offer or a supply arrangement especially for a commodity falling under the mandatory commodities, the contracting officer should always, when feasible, solicit for a PSIB set-aside stream to allow client departments the possibility of contracting with Indigenous firms if they wish to do a set-aside procurement under PSIB.
  4. When creating a standing offer or supply arrangement which will include both a source list for Indigenous set-asides as well as a general source list, the solicitation should clearly indicate that Indigenous suppliers who qualify for the Indigenous source list, standing offer or supply arrangement will be automatically placed on the general source list, standing offer or supply arrangement if the procurement requirements are identical. Therefore, in the case of identical requirements, it is not necessary for Indigenous suppliers to submit two separate bids/offers/arrangements.
  5. Contracting officers may also access other sources, such as Indigenous Services Canada’s Indigenous Business Directory for more information on Indigenous suppliers and to identify potential Indigenous businesses which may be invited to submit a bid/offer/arrangement. Contracting officers may also contact the Business Development Directorate, ISC, directly by telephone at 1-800-400-7677, or by email at: indigenousprocurement@sac-isc.gc.ca.
  6. When bids/offers/arrangements are solicited via the Government Electronic Tendering Service, notices (Notice of Proposed Procurement [NPP] or Advanced Contract Award Notice [ACAN]) must contain one of the following statement, prominently positioned, i.e., one of the first statements in the notice:
    "This procurement has been set aside under the federal government's Procurement Strategy for Indigenous Business (PSIB). In order to be considered, a supplier must certify that it qualifies as an Indigenous business as defined under PSIB and that it will comply with all requirements of PSIB." (NPP);
    OR
    "This procurement has been set-aside under the federal government's Procurement Strategy for Indigenous Business (PSIB). Only Indigenous businesses as defined under PSIB are eligible to challenge the proposed procurement strategy to award the contract to the named Indigenous business." (ACAN)
  7. Contracting officers must ensure that for notices on GETS, the appropriate "Agreement Type" is selected for PSIB set-asides. For example, ABE users must indicate "Set-Aside Program for Indigenous Business (SPIB)" in the "Trade Agreement" box of the Notice of Proposed Procurement.

9.40.40 Legal status of Indigenous business

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The description of a business as an Indigenous business does not affect the fact that in order to create an enforceable contract with Canada, the contract must be signed between Canada and a legal entity, which has the capacity to contract. In the event any uncertainty exists concerning the legal status of an Indigenous business, contracting officers must consult with legal counsel to ensure that the proposed contractor is capable of signing an enforceable agreement.

9.40.45 Certification by suppliers

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  1. For each procurement under the PSIB, suppliers will be required to provide, with their bid/offer/arrangement, a certification stating that they meet the definition of an Indigenous business, according to the definition provided, on the date that the bid/offer/arrangement was submitted, and an undertaking that the business will continue to meet this definition throughout the life of the contract.
  2. For a procurement subject to a PSIB set-aside, the contracting officer must insert in the solicitation, the Standard Acquisition Clauses and Conditions (SACC) Manual clauses A3000T, M9030T or S3035T, and A3001T, M3030T or S3036T, as appropriate. These clauses reference Annex 9.4: Requirements for the Set-aside Program for Indigenous Business, which sets out the definitions of an "Indigenous business" and an "Indigenous person".
  3. SACC Manual clauses A3000T, M9030T and S3035T contain a certification that suppliers must complete and submit with their bid/offer/arrangement. Failure by suppliers to submit this completed certification form with their bids/offers/arrangements will render the bid/offer/arrangement non-responsive.
  4. It is not the responsibility of the contracting officer to verify the supplier's certifications. In instances where the contracting officer questions the validity of a certification, the particulars must be referred to the Business Development Directorate, Indigenous Services Canada (ISC), for audit by third party auditors. (See 9.40.50(e).)
  5. Any resulting contract awarded on the basis of the supplier being Indigenous must include SACC Manual clause A3000C.

9.40.50 Audits of the bidder/offeror/supplier certification

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  1. A bidder/offeror/supplier is required to certify in its bid/offer/arrangement that it is an Indigenous business, as defined under PSIB (see Annex 9.4: Requirements for the Set-aside Program for Indigenous Business.) The certification includes an undertaking that the business will continue to meet the criteria, which define it as Indigenous throughout the performance of the contract. A bidder/offeror/supplier's certification that it is Indigenous is subject to audit, both before and after contract award.
  2. Pre-award audit is mandatory for requirements valued at $2M or more. To ensure that the mandatory requirement for pre-auditing is met, it is essential that the contracting officer properly notify Indigenous Services Canada (ISC) of such requirements, as per 9.40.30(b) above, and that the two best-assessed bids/offers/arrangements be submitted to ISC as per 9.40.50(f). The contracting officer must not award contracts of $2M or more until ISC has confirmed eligibility of the proposed contractor.
  3. Pre-award audits of suppliers' certifications will be conducted on a random basis for requirements under $2M. ISC will advise the contracting officer whether a requirement is subject to pre-award audit no later than the date of solicitation closing (see 9.40.30(a)). Audits of suppliers' certifications are expected to require approximately 10 working days to be completed. When timing of contract award is an issue, this should be indicated in the notification to ISC, so that it may determine whether the auditing process can be expedited or the procurement excluded from the random selection.
  4. Pre-award audits may be requested either by the requisitioning authority, the contracting officer, or ISC, whenever there is a doubt regarding the validity of bidders/offerors/suppliers' certifications, regardless of the total estimated expenditure of the procurement.
  5. When ISC has advised that the requirement will be subject to a pre-award audit, the evaluation of bids/offers/arrangements will continue up to the point that the two "best assessed" bids/offers/arrangements have been identified. This information must be provided to ISC, minus any pricing information to undertake the pre-award audit of the bidders/offerors/suppliers' certification. Upon receipt of the results of the audit, ISC will advise the contracting officer. If the audit confirms the validity of the bidders/offerors/suppliers' certifications, award of the contract may proceed. If the audit determines that one or more of the certificates are invalid, the subject bidders/offerors/supplier(s) whose certifications have been declared invalid must be declared non-responsive, and the next-ranked bidder/offeror/supplier becomes the "recommended bidder/offeror/supplier". If the audit reveals that both certifications are invalid, the next-ranked supplier's certification must be referred to ISC for audit until either a bid/offer/arrangement with a valid certificate is obtained, or no bidders/offerors/suppliers remain. In the event that all bidders/offerors/suppliers are eliminated on the basis of invalid certifications, the solicitation must be reissued, either as a set-aside once again, or not set aside, after consultation with the client department. Whether the contract should be awarded to the next-ranked bidder/offeror/supplier, or the solicitation reissued, is a decision that must be made on a case-by-case basis, in keeping with sound contracting principles.
  6. After contract award, the contractor's certification is subject to audit to confirm its status as an Indigenous business as well as to confirm that required Indigenous content is met during the life of the contract. (For more information, please contact ISC by sending an email to: indigenousprocurement@sac-isc.gc.ca.) Audits following contract award will normally be performed on a random basis, however where contracting officers believe it to be necessary, audit of the contractor's continued status as an Indigenous business may be requested of ISC.
  7. If the Indigenous business certificate is declared invalid, or if the contractor has not completed its undertaking to continue to qualify as an Indigenous business, it may be necessary to implement civil or contractual remedies. Contracting officers should consult with Legal Services and Indigenous Business Directorate, ISC, in determining the appropriate action to be taken.

9.40.55 Bid Challenge

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Bid challenges should be dealt with according to established internal supplier complaint response procedures for procurements not subject to trade agreements.

9.40.60 Procurement reporting for Procurement Strategy for Indigenous Business

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Contracting officers must ensure that reporting on contracts set aside under the Procurement Strategy for Indigenous Business (PSIB) is done accurately, in accordance with 7.30.20 Procurement Strategy for Indigenous Business Reporting.