Practitioner’s Guide for Procurement Pricing

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Public Services and Procurement Canada (PSPC) has further developed the Practitioner’s Guide for Procurement Pricing (“The Guide”).

The Guide is intended to inform those involved in Government of Canada contracting of the required steps and factors to be considered in making procurement pricing decisions, including aligning the pricing with the overall procurement strategy, objectives and priorities.

The development of the Guide has been divided into three phases. Phase 1 and Phase 2 are now complete and have been incorporated into one master document, Practitioner’s Guide for Procurement Pricing.

Details on Phase 1, the changes introduced by Phase 2 and the work underway for Phase 3 are as follows:

Phase 1: of the Practitioner’s Guide for Procurement Pricing (February 8, 2019), introduced guidance on the consideration of pricing throughout the acquisition lifecycle and recommendations from a contract management perspective on timing, documentation and option analysis. This version of the guide included proposed revisions to the basis of payment, guidance on the use of incentives, and a costing standard to help practitioners determine the acceptability of contract costs.

Phase 2: of the Practitioner’s Guide for Procurement Pricing provides further guidance on Section 4 of the Guide, as it relates to Basis of Payment and Incentives.The key highlights of the Section 4 update are as follows:

  • Increased focus and detail for Fixed Unit Rate Basis of Payment including tables describing how and when to use.
  • Process tables for cost reimbursable with no fee and fixed fee to aid in their proper use.
  • Increased clarity to provide a better indication of the degree of flexibility on use of Foreign Currency Adjustments and Economic Price Adjustments.
  • Greater level of detail and explanations on appropriate use of Provisional Price Basis of Payment including steps to assist on how and when to use.
  • Brief overview on conditions leading to use of Limitation of Expenditure and Ceiling Price in contracts.

Phase 2 also includes discussion papers that provide direction and techniques on assessing the acceptability of contentious contract costing areas, including the following:

  • Transfer Pricing
  • Research and Development
  • Value Proposition
  • Production Capacity
  • Asset Valuation

Phase 3: of the Practitioner’s Guide for Procurement Pricing will present further guidance and tools for the determination of profit and price.Phase 3 of the Guide is presently under development with stakeholder engagement in the following activities:

  • Pricing and Incentives Questionnaire: Thank you for your feedback on the questionnaire which is currently under review and consideration for Phase 3 development. Stakeholder feedback is essential for the development of relevant pricing guidance.
  • Pricing and Profit Stakeholder Consultations: Stakeholder workshops and meetings related to the proposed changes for the development of profit and price are coming this fall and winter (2019-2020). For further information on the workshops, please contact:TPSGC.padgamtp-appbipm.PWGSC@tpsgc-pwgsc.gc.ca

Background Information

PSPC has undertaken the task of updating guidance on contract costing and pricing in response to independent studies conducted on Canada’s current pricing practices.

The research to revise guidance involved broad stakeholder consultations and benchmarking against practices employed by other jurisdictions.

Key messages learned from the consultations, research, and benchmarking have been incorporated into the Guide.

Please note, as it remains in the consultation and development phase, the Guide remains in a document format. Upon completion of Phase 3 of the Guide, work will be done to make the guidance web-based, interactive and user friendly.

Comments and Feedback

The Guide is intended to remain evergreen by continuously seeking to learn and adapt to emerging practices and PSPC’s experience. PSPC welcomes your suggestions and ideas.

Comments and feedback can be provided to the PSPC team responsible, identified below.

Procurement Support Services Sector - Professional Practices Group
Acquisitions Program
Public Services and Procurement Canada
Email:TPSGC.padgamtp-appbipm.PWGSC@tpsgc-pwgsc.gc.ca