Chapter 4 - Solicitation process

4.1 Solicitation process - Introduction

Effective date: 2015-09-24

This chapter provides information on pre-solicitation requests, various methods of solicitation and various sourcing tools. It also contains information on how to prepare and issue a solicitation. Finally, contracting officers will find information on closing procedures, bid receiving, modification and withdrawal of bids/offers/arrangements. Contracting officers are reminded that Canada seeks competitive solicitations whenever possible.

4.5 Pre-solicitation requests

Effective date: 2010-01-11

Before a formal solicitation is issued, solicitations for information such as Price and Availability (P&A) enquiries and Requests for Information or Letters of Interest may be issued.

4.5.1 Price and Availability enquiry

Effective date: 2010-01-11

A Price and Availability (P&A) enquiry is a request sent to suppliers for information concerning approximate prices and availability of specific goods or services. It is used when such information is needed by Public Works and Government Services Canada (PWGSC) or by a client department for program planning or budgetary purposes. A P&A enquiry could be made directly to selected suppliers, or it may be publicly posted on Government Electronic Tendering Service (GETS). P&A enquiries must clearly indicate that the request is not a solicitation and that there are no commitments with respect to future purchases or contracts.

4.5.5 Request for Information or Letter of Interest

Effective date: 2010-01-11

1. A Request for Information (RFI) or Letter of Interest (LOI) is used when detailed information and feedback are required from suppliers. Such requests might outline a potential requirement and request suppliers to describe their ability to satisfy the requirement and to provide ideas and suggestions on how the eventual solicitation might be structured. Responses are used to assist the client department and PWGSC in finalizing their plans for the requirement and in developing achievable objectives and deliverables. RFIs/LOIs would normally be posted on GETS in order to obtain replies from a wide audience. If a source list is to be used, the RFI or LOI may be sent only to those on the list. RFIs/LOIs must clearly indicate that they are not solicitations and that there are no commitments with respect to future purchases or contracts.
2. RFIs/LOIs identify the client department's potential requirement and its business objectives.
3. The main objectives of an RFI/LOI are to:
   1. allow suppliers time to:
      1. assess and comment on the adequacy and clarity of the requirements as currently expressed;
      2. offer suggestions regarding potential alternative solutions that would meet requirements, such as solution with a lower environmental impact;
      3. comment on the procurement strategy, preliminary basis of payment elements, and timelines for the project, and
      4. comment on the draft solicitation when included with the RFI/LOI.
   2. provide information to assist the client department to:
      1. determine whether to proceed with requirements/strategy as planned, and if so, further developing internal planning, approval and solicitation documents that may potentially lead to a solicitation;
      2. refine the procurement strategy, project structure, cost estimate, timelines, requirements definition, and other aspects of the requirement;
      3. become a more "informed buyer" with an enhanced understanding of industry goods and service offerings in the areas of interest; and
      4. assess potential alternative solution concepts that would meet its requirement, such as environmentally preferable solutions.

4.10 Solicitation methods

Effective date: 2010-01-11

Various methods of solicitation may be used depending upon the circumstances of the particular procurement.

4.10.1 Request for Quotation

Effective date: 2024-05-31

1. A Request for Quotation (RFQ) may be used to solicit bids for low dollar value commercial goods and/or services valued below $25,000 for goods and $40,000 for construction and services, including all applicable taxes, from one or more suppliers.
2. Prior to soliciting an offer using a RFQ, contracting officers are to verify the Ineligibility and Suspension List and ascertain that the offeror is not ineligible.
3. Because of its abbreviated nature, a RFQ may not contain all of the terms and conditions that are typically used to form a contract, but must include the Ineligibility and Suspension Policy Clauses.
4. The contract requirement must be well defined such that bids may be evaluated and compared on the basis of price and delivery and where contract award may be determined on the basis of lowest-priced bid that meets the requirements.
5. RFQs are not publicly posted. Contracting officers may have suppliers submit their RFQs directly to them if a specific date and time is set for the receipt of the quotation.
6. See section 5.16 Integrity compliance for details on the process to be followed before contract award or before issuing a purchase order.

4.10.5 Telephone buy

Effective date: 2024-05-31

1. A telephone buy (T-buy) is a form of Request for Quotation (RFQ), where bids are solicited from one or more selected suppliers verbally, in-person or over the telephone, for requirements below $25,000 for goods and $40,000 for construction and services, including all applicable taxes.
2. Prior to soliciting a telephone bid, the contracting officer must verify the Ineligibility and Suspension List and ascertain that the bidder is not ineligible.
3. When soliciting bids through telephone buy, the contracting officer must ensure that the bidder is informed that they will be subject to the Ineligibility and Suspension Policy, and that they must be compliant to the Policy to be awarded a contract. The contracting officer must request that the bidder familiarizes themselves with the Policy.
4. A verbal contract may be entered into by telephone (and order may be placed) if the contracting officer has the appropriate authority.
5. Written confirmation from the bidder is not required for bids received by telephone, however the contracting officer must record the details of the telephone bid on the procurement file and the order must be confirmed in writing by issuing the applicable contract document and providing a copy to the contractor.
6. See Chapter 7 - Award of contracts and issuance of Standing Offers and Supply Arrangements and section 5.16 Integrity compliance for details on the process to be followed before contract award or before issuing a purchase order.

4.10.10 Invitation to Tender

Effective date: 2024-05-31

1. An Invitation to Tender (ITT) is used where selection is based on the lowest price. It should be used when all of the following criteria apply:
   1. two or more sources are considered capable of carrying out the requirement;
   2. the requirement is adequately defined to permit the evaluation of bids against clearly stated criteria;
   3. the market conditions are such that bids can be submitted on a common pricing basis;
   4. it is intended to accept the lowest-priced responsive bid without negotiations; and
   5. the evaluation of bids will exclude any Product, Resource, Operating and Contingency (PROC) costs or socio-economic considerations, other than the employment equity provisions.
2. An ITT can be used to solicit bids:
   1. through public advertisement on the Government Electronic Tendering Service (GETS);
   2. through direct invitation of selected suppliers by means of a source list, where permitted; or
   3. by invitation of one source only if conditions for a non-competitive process have been met.
3. Prior to issuing an ITT, contracting officers are to verify the Ineligibility and Suspension List and ensure that the invited suppliers are not ineligible, if they have not been selected from a prequalified list.
4. An ITT must include the Ineligibility and Suspension Policy Clauses.
5. An ITT can be opened publicly. Public opening should be considered for all ITTs estimated to exceed $25,000. ITTs for requirements less than $25,000 may be opened publicly if circumstances warrant. Public openings should be considered for any bid where the contract award will have a high degree of public visibility.
6. See section 5.16 Integrity compliance for details on the process to be followed before contract award.

4.10.15 Bid solicitation

Effective date: 2020-07-01

1. A bid solicitation may be used for low dollar value (Simple), medium complexity (MC) and higher complexity (HC) requirements. It can be used when the bidder selection is based on price or best value. The Standard Instructions 2003 and 2004 of the Standard Acquisition Clauses and Conditions (SACC) Manual must be used in bid solicitations for goods and/or services. Contracting officers establishing bid solicitations for low dollar value, medium and higher complexity requirements must use the standard procurement templates following the Standard Procurement Template Procedures (accessible only on the Government of Canada network), which provides instructions on how to use the templates.
2. A Request for Proposal (RFP) is a form of bid solicitation that is used when the bidder selection is based on best value rather than on price alone. A RFP should be used when, owing to the nature of the requirement, suppliers are invited to propose a solution to a problem, requirement or objective, and the selection of the contractor is based on the effectiveness of the proposed solution.
3. Bids must be evaluated and the successful supplier must be selected in accordance with specific criteria and procedures as set out in the bid solicitation.
4. A bid solicitation can be used to solicit bids through public advertisement on GETS, through direct invitation of selected suppliers by means of a source list where permitted, or by invitation of one source only if conditions for a non-competitive process have been met.
5. Responses to the bid solicitation may result in negotiations before contract award when the bid solicitation states the right to negotiate in accordance with the international trade agreements and/or the Canadian Free Trade Agreement (CFTA).
6. The preparation of bids is often costly to suppliers. To keep the total cost down while ensuring freedom of access to suppliers, consideration should be given to soliciting bids in two steps.
   1. during the first step of this process, suppliers are requested to provide letters of interest and qualifications, from which a short list is developed. During the second step, suppliers on the short list are requested to submit detailed bids;
   2. suppliers not included on the short list are still able to request the bid solicitation and submit bids.
7. Such a process might be appropriate where many suppliers are known. When doing a two-stage procurement, contracting officers must follow procedures required under the applicable international trade agreements and the Canadian Free Trade Agreement (CFTA) related to selective tendering and prequalification of suppliers, respectively.
8. The bid solicitation should include, as a minimum, the following information:
   1. a clear definition of the requirement;
   2. bidder instructions;
   3. bid preparation instructions;
   4. clear evaluation procedures;
   5. certification requirements;
   6. security and financial requirements;
   7. validity of the bid;
   8. resulting contract clauses; and
   9. instructions informing bidders that they may request information about the results of the RFP and how their bid was evaluated. (See 7.40 Debriefings and feedback to unsuccessful bidders/offerors/suppliers for information to be included in debriefings.)

4.10.20 Request for Standing Offers

Effective date: 2014-06-26

1. A Request for Standing Offers (RFSO) is used to solicit offers for standing offer methods of supply. For more information on the application of standing offers, see 3.40 Standing offer method of supply.
2. A RFSO can be used to solicit offers through public advertisement on GETS, through direct invitation of selected suppliers by means of a source list where permitted, or by invitation of one source only if conditions for a non-competitive process have been met.
3. The RFSO must give instructions on the use, purpose and limitations of the proposed standing offer. The Standard Acquisition Clauses and Conditions Manual (SACC) Standard Instructions 2006 (competitive) and 2007 (non-competitive) and General Conditions 2005 are designed specifically for standing offers and must be incorporated by reference in each RFSO. Contracting officers establishing an RFSO must use the RFSO template (accessible only on the Government of Canada network) following the Standard Procurement Template Procedures (accessible only on the Government of Canada network), which provides instructions on how to use the templates.
4. A RFSO must include the following information, as a minimum:
   1. a clear definition of the requirement and the period for making call-ups;
   2. information on the number of standing offers intended to be authorized for use;
   3. offer preparation instructions;
   4. clear evaluation criteria;
   5. clear evaluation procedures and basis of selection;
   6. instructions informing offerors that they may request information about the results of the RFSO and how their offer was evaluated. (See 7.40 Debriefings to and feedback to unsuccessful bidders/offerors/suppliers for information to be included in debriefings.)
   7. clear ranking methodology where applicable;
   8. clear call-up procedure(s) including the method of allocating the work among multiple standing offers;
   9. a notice to offerors regarding disclosure of their unit prices (see SACC Manual General Conditions 2005);
   10. conditions applicable to the RFSO;
   11. conditions applicable to the standing offer;
   12. resulting contract clauses applicable to ensuing call-ups; and
   13. the estimated utilization, whenever practical.

4.10.20.1 Standing Offer procedures

Effective date: 2022-12-01

1. Call-up Limits: A call-up issued against a standing offer constitutes an individual contract and Treasury Board (TB) contracting limits apply. Contracting officers will set the maximum call-up limit for identified users in the standing offer document using Appendix A – Contracting Approvals of the Directive on the Management of Procurement as a guide. However, PWGSC has the authority to further limit the value of individual call-ups.
2. Financial Limitation: The inclusion of a limitation of expenditure in standing offers is optional. The standing offer authority will determine, if applicable, the need for inclusion of a limit on the basis of the type of standing offer (Master or Individual), the degree of control over total expenditures and the needs of the client department(s). SACC Manual clause M4506C may apply.
3. Identified Users: The identified users authorized to make call-ups against standing offers could include any government department, agency or Crown corporation listed in Schedule I, Schedule I.1, Schedule II, Schedule III of the Financial Administration Act. See SACC Manual RFSO template (accessible only on the Government of Canada network), Part 7A, article 7.7.
4. Standing Offers Reporting: The standing offer authority may indicate in the standing offer the reporting requirement for the offeror, and/or the client department, as applicable. In such case, the standing offer must indicate the time frame within which each report must be submitted following the reporting period. See SACC Manual clause M7010C. See also 8.75.1 Reporting for Standing Offers and Supply Arrangements for more details on reporting.

4.10.20.5 Ranking and methodology for Standing Offers

Effective date: 2024-05-31

1. One Standing Offer:
   Where only one standing offer will be authorized for use as the result of a competitive RFSO, the resulting call-ups are considered competitive and the competitive call-up authorities can be used.
2. Multiple Standing Offers:
   If more than one standing offer will be authorized for use based on a reasonable expectation of business activity such that a single offeror would lack the capacity to meet the demands, clear ranking methodologies and call-up procedures must be described in the RFSO, so that suppliers are aware of these when preparing their offer. The two models of ranking methodology are described below:
   1. right of first refusal basis:
      The call-up procedures require that when a requirement is identified, the identified user will contact the highest-ranked offeror to determine if the requirement can be satisfied by that offeror. If the highest-ranked offeror is able to meet the requirement, a call-up is made against its standing offer. If that offeror is unable to meet the requirement, the identified user will contact the next ranked offeror. The identified user will continue and proceed as above until one offeror indicates that it can meet the requirement of the call-up. In other words, call-ups are made based on the "right of first refusal" basis. When the highest-ranked offeror is unable to fulfill the need, the identified user is required to document its file appropriately. The resulting call-ups are considered competitive and the competitive call-up authorities can be used.
   2. proportional basis:
      The call-up procedures require that call-ups be issued on a proportional basis such that the highest-ranked offeror receives the largest predetermined portion of the work; the second highest-ranked offeror receives the second largest predetermined portion of the work, etc. (for example, 50 percent to the highest-ranked offer, 30 percent to the next highest-ranked offer and 20 percent to the third highest-ranked offer). This predetermined distribution of the resulting work is to be described in the RFSO so that potential offerors are aware of these when preparing their offer. It is also known as "collective best value". The highest-ranked standing offer represents the best value for Canada, and its offeror receives the largest portion of the work. A clear advantage in terms of distribution of expected business volume should be given to the highest-ranked offeror (for example, 20 percent or more than the next offer) and the same for the others. The determination of what constitutes a clear advantage is the responsibility of the contracting officer and may vary by commodity, service or by business case. The resultant call-ups are considered competitive and the competitive call-up authorities can be used.
      Where individual standing offers are to be authorized based on the proportional basis approach, the contracting officer should inform the authorized user of his/her obligation to monitor call-up activities to ensure work is allocated in accordance with predetermined work distribution.
   3. In both cases above, contracting officers should clearly state in the RFSO the expected number of standing offers that are intended to be authorized for use. If the intention is that multiple standing offers will be authorized for use, the RFSO should state the basis upon which call-ups will be issued, whether right of first refusal, proportional or another method. If call-ups must be issued against standing offers under the proportional basis approach, the breakdown must be stated (for example, 50 percent, 30 percent and 20 percent) in the RFSO.
   4. In addition to the above, when the intention is that multiple standing offers will be authorized for use, contracting officers could include a condition that only those standing offers, which are within, for example, 10 percent of the best-priced offer, will be considered. The method of such calculations should be explicitly described in the RFSO.
3. Non-competitive call-ups:
   In other instances, more than one SO will be authorized for use but no ranking is established. This would occur, for example, when prices are sought for a full range of items contained in a catalogue where items and ranking of offers is impossible. The authorized call-up authority may choose whichever SO to use. For some requirements, the contracting officers may set parameters to guide the authorized users in the selection of one of the standing offers. Call-ups made against these standing offers are non-competitive and only the non-competitive call-up authorities can be used. In addition, client departments must provide a distinct justification for each call-up, in accordance with paragraph c of section 3.15.1 Justification of Non-competitive Process.

4.10.20.10 Standing Offer forms

Effective date: 2010-01-11

The following forms are used for call-ups against a standing offer and are available through PWGSC Forms Catalogue (accessible only on the Government of Canada network) Web site:

Standing Offer forms

Forms number	Forms title
PWGSC- TPSGC 942  (accessible only on the Government of Canada network)	Call-up Against a Standing Offer
PWGSC- TPSGC 944  (accessible only on the Government of Canada network)	Call-up Against Multiple Standing Offers
PWGSC- TPSGC 8251  (accessible only on the Government of Canada network)	Call-up Against a Standing Offer for Temporary Help
PWGSC- TPSGC 7169-1  (accessible only on the Government of Canada network)	Call-up Against a Standing Offer for Security Guard Services
PWGSC- TPSGC 191  (accessible only on the Government of Canada network)	Acquisition Card Application (MasterCard)1 may also be used at the time of the call-up against standing offers, as an alternative to other payment methods identified in the standing offer2.

¹Because use of a credit card results in immediate payment to the contractor, the normal payment period and interest on overdue accounts provisions do not apply. (See SACC Manual template RFSO (accessible only on the Government of Canada network) Part 6B, article 2.)

²Contracting officers should verify if the client(s) need such a service and include appropriate details in the standing offers. In such cases a call-up form may, or may not, be warranted.

4.10.25 Request for Supply Arrangements

Effective date: 2014-06-26

1. A Request for Supply Arrangements (RFSA) is used to solicit arrangements from suppliers for the establishment of supply arrangements (SA). For more information, see 3.45 Supply arrangement method of supply.
2. Contracting officers establishing an RFSA must use the Standard Acquisition Clauses and Conditions Manual Standard Instructions 2008, General Conditions 2020 and the RFSA template following the Standard Procurement Template Procedures (accessible only on the Government of Canada network), which provides instructions on how to use the templates.
3. The RFSA should include, as a minimum, the following information:
   1. a clear definition of the requirement;
   2. supplier instructions;
   3. arrangement preparation instructions;
   4. clear evaluation procedures and basis of selection for the establishment of the list of qualified suppliers;
   5. certification requirements;
   6. conditions applicable to the SA, including the terms of the solicitation;
   7. resulting contract clauses applicable to any contract resulting from each solicitation; and
   8. instructions informing suppliers that they may request information about the results of the RFSA and how their offer was evaluated. (See 7.40 Debriefings and feedback to unsuccessful bidders/offerors/suppliers for information to be included in debriefings.)
4. The list of qualified suppliers as a result of a RFSA is considered to be a source list under international trade agreements.

4.10.25.1 Supply Arrangement procedures

Effective date: 2022-12-01

1. Before establishing a supply arrangement (SA), the contracting officer will prepare and issue an RFSA, which will allow for a suitable pool of suppliers who meet the stated evaluation criteria. Industrial security requirements (that is, personnel, physical and information technology security) should be identified at this time, when any or all of these security aspects will be applicable to all client departments of the SA.
2. The following forms must be used by client departments for the first page of the bid solicitation issued under a SA and for the first page of the resulting contract:
   PWGSC-TPSGC 9400-3 (accessible only on the Government of Canada network), Bid Solicitation
   PWGSC-TPSGC 9400-4 (accessible only on the Government of Canada network), Contract
3. Contracting officers will set the contracting limits in the SA document for the identified users as defined in the supply arrangement, as the case may be. For supply arrangements for goods, services or construction, contracting officers may set the maximum contract limit using the Appendix A: Contracting Approvals of the Directive on the Management of Procurement, as a guide. The Directive sets the dollar limit for contract entry for goods, services and construction, above which departments must seek the approval of TB to enter into the contract.
4. A legal contract does not exist between Canada and the supplier until a contract is awarded through the completion of form PWGSC-TPSGC 9400-4 (accessible only on the Government of Canada network).
5. Supply Arrangement Reporting: The supply arrangement authority may indicate in the supply arrangement the reporting requirements for the supplier, or the client, as applicable. The SA should indicate the time frame within which each report must be submitted following the reporting period. See SACC Manual clause S0010C. See also 8.75.1 Reporting for Standing Offers and Supply Arrangements for more details on reporting.
6. Financial Viability: 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 SAs. See SACC Manual clause S0030T. See also 5.60.1 Financial capability for more details on financial capability.
7. Identified Users: The identified users authorized to use supply arrangements could include any government department, agency or Crown corporation listed in Schedule I, Schedule II, Schedule III of the Financial Administration Act. See SACC Manual template RFSA, Part 6A, article 6.

4.10.25.5 International trade agreements and use of Supply Arrangements

Effective date: 2020-07-01

1. Requests for Supply Arrangements (RFSAs) subject to international trade agreements must be published at least once a year on Government Electronic Tendering Service (GETS) and made available continuously on GETS. Notices for RFSAs subject to international trade agreements must include the following components:

   1. a description of the goods or services, or categories of goods and services, for which the RFSA may be used;
   2. the conditions for participation/criteria to be satisfied by suppliers for inclusion on the list;
   3. the methods the procuring entity will use to verify that a supplier satisfies the conditions;
   4. the name and address of the procuring entity, and any other information necessary to contact the entity and obtain all relevant documents relating to the list;
   5. the period of validity of the list and the means for its renewal or termination, or where the period of validity is not provided, an indication of the method by which notice will be given of the termination of use of the list;
   6. an indication of which trade agreements apply to the RFSA.

   If one or more international trade agreements apply, the RFSA must be posted for at least 25 calendar days before any bid solicitation(s) under the resulting Supply Arrangement can close. If a state of urgency that is duly substantiated by the procuring entity renders this time impracticable, this time period may be reduced to no less than 10 days.

   Suppliers must be allowed to apply for qualification at any time, and all qualified suppliers must be included on the SA within a reasonably short time.

   For information on determining whether or not international trade agreements apply to a RFSA, see 3.50.5 Applicability of trade agreements to Standing Offers and Supply Arrangements.

2. For bid solicitations and proposed contracts under a supply arrangement (SA), the following applies:
   1. Where the estimated value of a proposed contract under the SA is below the applicable trade agreement thresholds, those agreements do not apply.
   2. Where the estimated value of a proposed contract under the SA is equal to or above the applicable trade agreement thresholds, those agreements apply to the bid solicitation.
   3. Where one or more of the international trade agreements apply to a bid solicitation under a SA, a Notice of Proposed Procurement (NPP) must be published on GETS. If a supplier that is not included on the SA requests to participate in the bid solicitation under the SA, they must be able to apply for qualification. If qualified, the supplier must be included on the SA within a reasonable period of time and be allowed to participate in the bid solicitation in question. However, after bid closing, the contracting officer does not have to delay the contract award process in order to allow a supplier to go through the qualification process.
      For information on determining the solicitation period of bid solicitations under SAs, see 4.75.5 Determining the solicitation period.

4.10.25.10 Ongoing qualification process

Effective date: 2020-07-01

In order to simplify and streamline guidance with respect to trade agreements, the information previously found in this Section has been incorporated into 4.10.25.5 International trade agreements and use of Supply Arrangements.

For reference purposes only, Section 4.10.25.10 is available in the Supply Manual archive (accessible only on the Government of Canada network), Version 2020-1.

4.10.25.15 Canadian Free Trade Agreement and use of Supply Arrangements

Effective date: 2018-12-06

Where the estimated value of a proposed contract under the supply arrangement is above the CFTA threshold, CFTA applies to the bid solicitation. Otherwise, CFTA does not apply to that proposed contract.

Where CFTA applies to a bid solicitation under a supply arrangement, the CFTA allows the use of source lists without publication of a NPP, provided that all suppliers on the source list be invited to bid and that they be able to apply for qualification at any time. It is PWGSC policy that suppliers must be given at least 15 calendar days to bid.

4.10.25.20 Ongoing qualification process

Effective date: 2018-12-06

Pursuant to CFTA, the existence of a list of qualified suppliers must be published at least once a year by an invitation to qualify on GETS or predetermined newspapers. The invitation to qualify must contain the conditions to be fulfilled by suppliers to qualify. Suppliers must be allowed to apply for qualification at any time.

4.10.30 Professional services sourcing tools

Effective date: 2020-07-01

Professional services sourcing tools that may help client departments with their requirements are provided below.

1. Temporary Help Services (THS)
   1. THS are traditionally used:
      1. when a public servant is absent for a temporary period of time;
      2. when there is a requirement for additional staff during a temporary workload increase and there is an insufficient number of public servants available to meet the requirement; or
      3. a position is vacant and staffing action is being completed.
   2. THS is a tool to assist federal departments in the National Capital Region in their procurement of THS with a value (including all subsequent amendments and Goods and Services Taxes) below the applicable thresholds indicated in the THS Supply Arrangement business rules section. Some of the sources are:
      1. Public Works and Government Services Canada (PWGSC) issues Regional Master Standing Offers (RMSOs) to provide for qualified personnel for temporary assignments.
      2. RMSO for temporary help services are requested and authorized by the regional offices of PWGSC. Contracting officers must keep client departments informed of contracting processes, procedures and definitions of categories of service with respect to THS.
      3. There is a temporary help contracting officers' network, which has been working with functional guidance from the Professional Services Procurement Directorate, Services and Technology Acquisition Management Sector.
   3. For additional information, consult the contact person identified on the Temporary Help Services (On-Line System) Web site.
2. ProServices is a professional services mandatory method of supply for requirements below the Canada-Korea Free Trade Agreement threshold and is available through the Centralized Professional Services ePortal.
3. SELECT is a database of approved firms, providing construction, architectural and engineering services, as well as related maintenance and consulting services. It is used by PWGSC to invite suppliers to bid on real property consulting services and construction services below $100,000.
4. In-Service Support Supply Arrangement (ISS SA) is currently limited to a supply arrangement for the professional services related to Human Resources Management, Organizational Management and Project Management.

4.15 Preparation of the solicitation documents

Effective date: 2015-02-25

1. The solicitation documents must be prepared in a way to reflect the approved procurement strategy.
2. Contracting officers are encouraged to obtain a review of the solicitation documents prior to release.
3. Contracting officers must perform due diligence in identifying potential conflicts of interests. This can be done by asking the client department if anyone who is not an employee of Canada is or will be involved in the preparation of the statement of work or requirement, the evaluation criteria, and the evaluation. Contracting officers may also consider asking if any employees or former public servants have connections in their personal or professional life, which may lead to suppliers asking questions about favoritism. Contracting officers should consult the conflict of interest clause contained in the Standard Acquisition Clauses and Conditions (SACC) Manual standard instructions.

4.15.1 Departmental standard procurement templates

Effective date: 2024-02-16

1. Public Works and Government Services Canada (PWGSC) has committed to promoting a "common look and feel" in acquisition documents by standardizing terminology, simplifying contract language by using plain language, and ensuring more consistency and uniformity.
2. PWGSChas implemented departmental standard procurement documents which include standard instructions, general conditions and templates for bid solicitations, requests for standing offers (RFSOs) and requests for supply arrangements (RFSAs) for use by its contracting officers for the procurement of goods, services or both, excluding construction and architectural and engineering requirements.
3. Subject to the applicable procedures for use of the Standard Procurement Templates contained in the SACC Manual, contracting officers must use the bid solicitation and resulting contract templates for competitive and non-competitive requirements for low dollar value (Simple), medium complexity (MC) and higher complexity (HC), and the templates for Request for Standing Offers (RFSO) and Request for Supply Arrangements (RFSA) for the procurement of goods, services or both. To maintain the "common look and feel" for PWGSC's acquisition documents, contracting officers must not modify or change the order and content of these templates, except where indicated. Where applicable, contracting officers should obtain from their supervisor the most current standard template used within their respective area that has been customized for specific requirements in accordance with the standard templates. Directorates needing assistance in developing documents based on these templates should contact the Strategic Policy Development and Integration Directorate of the Strategic Policy Sector by email at: TPSGC.Outilsdapprovisionnement-ProcurementTools.PWGSC@tpsgc-pwgsc.gc.ca.
4. There are six standard procurement templates available in Microsoft Word (.doc or .docx). Associated marked-up PDF files showing the latest changes are also available for each template. Standard Procurement Template Procedures (accessible only on the Government of Canada network) are also provided to instruct contracting officers on how to use the templates.
5. Procurement of most goods and services must be carried out using the general conditions and supplemental general conditions found in the SACC Manual. The conditions to be used depend on the nature and complexity of the procurement and are provided in Annex 4.1: General conditions and supplemental general conditions.
6. Real Property Contracting utilizes their own separate standard templates for construction and architectural and engineering services.
7. The standard cover pages of solicitations must be used for solicitations issued by PWGSC. Manager's approval is required to issue solicitations that do not use standard cover pages. Solicitations must specify the solicitation closing date on the cover page.
8. Contracting officers must ensure that instructions for the submission of solicitations and the solicitation closing date and time for each solicitation are clearly stated in the procurement documents. Contracting officers must also ensure that the solicitation closing date, which appears on the Notice of Proposed Procurement, is consistent with the solicitation.

4.15.5 Green procurement requirements

Effective date: 2022-05-12

1. Contracting officers must ensure that value for money has been achieved for Canada. Value for money includes the consideration of many factors such as cost, performance, availability, quality and environmental performance.
2. Contracting officers must consider green procurement in the preparation of solicitation documents and resulting contracts, including requests for standing offers and requests for supply arrangements, to ensure that environmental considerations, if appropriate, are addressed. Contracting officers must also consult with relevant commodity teams with respect to Green Procurement Plans and Guide to Completion. Environmental considerations that are related to specific commodities can then be utilized in the procurement. Contracting officers should consider departmental green procurement targets and the green procurement experience of other departments.
3. Until such time as standard clauses and conditions on environmental performance considerations have been developed centrally, they should be developed by contracting officers as appropriate to support the inclusion of environmental performance requirements, recognizing that they will have to be approved by Legal Services.
4. Contracting officers can consult Annex 2.2: Green procurement: Environmental factors and evaluation indicators for a list of factors to be considered in developing the solicitation.
5. Contracting officers can contact the Green Procurement Team, within the Strategic Policy Sector, by email at TPSGC.PAAchatsEcologiques-APGreenProcurement.PWGSC@tpsgc-pwgsc.gc.ca, to obtain assistance with integrating environmental considerations in their solicitation documents.

4.15.6 Accessible procurement requirements

Effective date: 2022-05-12

1. Contracting authorities must ensure that value for money has been achieved for Canada. Value for money includes the consideration of many factors such as cost, performance, availability, quality and accessibility.
2. Contracting authorities must consider accessibility in the preparation of solicitation documents and resulting contracts, including requests for standing offers and requests for supply arrangements, to ensure that accessibility criteria, if appropriate, are included in the procurement. For more information, see Treasury Board Secretariat’s Directive on the Management of Procurement sections 4.2.7.1 and 4.2.7.1.1.
3. Contracting authorities can consult Annex 2.6 Accessible procurement: Factors and considerations for a list of factors and requirements to be considered in developing the solicitation, as well as the Accessible Procurement Resource Centre (accessible only on the Government of Canada network) (APRC) web page and the Office of Public Service Accessibility (accessible only on the Government of Canada network) web page.
4. Contracting authorities can contact the APRC, within the Acquisitions Branch, by email at TPSGC.PACRAAccessible-APAccessiblePRC.PWGSC@tpsgc-pwgsc.gc.ca, to obtain assistance with integrating accessibility considerations in their solicitation documents.

4.15.10 Methods of responding to a solicitation

Effective date: 2022-03-29

1. The method and location of bid receipt must be specified in the solicitation.
2. The following methods of response may be used:
   1. in writing and submitted to the specified Bid Receiving Unit: all ($) dollar values;
   2. in writing and submitted directly to the contracting officer: below $25,000 for goods and $40,000 for construction and services, including all applicable taxes;
   3. verbally by telephone:
      1. below $25,000 for goods and $40,000 for construction and services, including all applicable taxes;
      2. any amount, in cases of documented extreme urgency (director's approval is mandatory);
   4. on electronic media (such as DVDs, USB key(s), CD(s)) and submitted to the specified Bid Receiving Unit;
   5. by facsimile;
   6. by the Canada Post Corporation’s (CPC) Connect service.
3. When some method of responding is not acceptable contracting officers must clearly indicate this in the solicitation and should also indicate this in the Notice of Proposed Procurement.

4.15.15 Technical data

Effective date: 2010-08-16

1. For technical data, not owned by PWGSC, the contracting officer must ensure that the government obtains the right for the distribution and use of such data.
2. For DND requirements form PWGSC-TPSGC 1065, Request for Distribution of Technical Data, must be used. Contracting Officers must send (by fax,/ e-mail, etc.) the completed form to DSCOs repository section / staff DSCO 4-7 @ the National Printing Bureau (NPB - 45 Blvd. Sacré-Coeur, Gatineau, QC) in sufficient time to ensure that the data will be available when the bid solicitation is issued.
3. PWGSC will not provide data available to potential bidders through normal business channels.

Examples of such material technical data are specifications of Canadian Standards Association (CSA), Society of Automotive Engineers (SAE), National Electrical Maintenance Association (NEMA), Underwriters' Laboratories of Canada (ULC) Standards and the Canadian General Standards Board (CGSB).

4.20 Official languages obligations in procurement

Effective date: 2022-05-13

1. The Government has the obligation to serve and communicate with the public in both official languages, pursuant to the Official Languages Act (OLA) and all regulations thereunder including the Official Languages (Communications with and Services to the Public) Regulations (for the purposes of this section, the term “ OLA” refers to both the Act and Regulations).
2. The basic rule is that any member of the public in Canada has the right to communicate with and to receive available services in either official language.

4.20.1 The Official Languages Act (OLA) and the publication of procurement notices and related tender documents on the Government Electronic Tendering Service (GETS)

Effective date: 2022-05-13

1. All procurement notices and related tender documents posted on the GETS must be in both official languages. The French and English content must be of equal quality and be published at the same time.
2. This means that all procurement notices and related tender documents must be translated prior to posting on the GETS.
3. Notices and related tender documents subject to these obligations include but are not limited to:
   1. notices of proposed procurement (NPPs);
   2. solicitations (e.g. RFPs, RFSOs, RFSAs);
   3. advance contract award notices (ACANs);
   4. requests for information (RFIs);
   5. letters of interest (LOIs);
   6. invitations to Qualify (ITQs);
   7. forms, standards, purchase descriptions, statements of work, resulting contracts, blueprints, architectural drawings, reports, graphics and other documentation that is included as part of a tender package;
   8. any other notices posted on the GETS;
   9. amendments to any of the above.
4. Proper translation of government content is essential to ensure the integrity of the procurement process and to ensure that procurements are not adversely affected. Acquisition Program (AP) contracting officers and clients should note the standard for government content with regard to the Official Languages Act in section 1.3 of the Canada.ca Style Guide, namely that government content must:
   1. be professionally translated (for equal quality in both official languages);
   2. reflect Canadian writing conventions in French and English;
   3. include fully bilingual images, multimedia files and transcripts, or contain equivalent information in both official languages.
5. For translation services, AP contracting officers are encouraged to leverage the services of the Translation Bureau including translation, revision and editing. These services are also made available to other government departments and agencies. To learn more about these services and how to submit an online request to obtain them, please visit the Official language translation, revision and editing services page (accessible only on the Government of Canada network).
   1. If clients are seeking to leverage the services of Translation Bureau or a third party for the translation of documents with professional seals, they should ensure that the approach meets with any provincial or territorial standards or requirements governing the translation of those professionally sealed documents. For more information on the translation of documents with professional seals, please refer to Section 4.20.1.1.2 Translation of documents with professional seals and Annex 1.1.1 Matrix of responsibilities between Public Works and Government Services Canada and client departments for the procurement of goods and services (generic) (Section 3.1).

4.20.1.1 Standard vs. non-standard documents

Effective date: 2022-05-13

The Official Languages Act (OLA) does not make the distinction regarding the nature of documents, and whether they are standard or non-standard. All documents must therefore be given the same consideration under the OLA.

4.20.1.1.2 Translation of documents with professional seals

Effective date: 2022-05-13

1. For documents (e.g. architectural or construction documents and drawings) requiring a professional seal, the client department and project authority may identify special translation requirements, which may require expertise in a specific type of document in order to ensure that their translation would be carried out and certified for equal quality in both official languages prior to posting.
2. With respect to translated documents being of equal quality, provincial and territorial jurisdictions will often have their own stringent provisions for how professionally sealed documents must be translated. Such provisions could include specific professional association standards and/or related legislative or regulatory requirements.
3. Translation errors, or failure to follow provincial or territorial requirements for translation these documents can pose serious consequences for Canada and other parties (e.g. construction errors, loss of professional license).
4. Acquisition Program (AP) contracting officers should encourage clients to verify the provincial or territorial requirements and seek legal advice when required.
5. Legal advice may also be sought regarding the legality of translating third-party documents and documents with professional seals, including for:
   1. Issues related to intellectual property (e.g. copyright);
   2. Requirements with a final delivery point covered by a comprehensive land claims agreement (CLCA);
   3. Concerns related to contractor liability on documents with professional seals that are translated by third parties.

4.20.1.2 Tendering from supplier lists

Effective date: 2022-05-13

In cases where all suppliers are pre-qualified in a two-stage tendering process (e.g. through a supply arrangement), and all have indicated the same (unilingual) language preference, Acquisition Program (AP) contracting officers may provide documents which meet with that language preference directly to those suppliers on the pre-qualified list.

4.20.1.3 Bidding that is national in scope

Effective date: 2022-05-13

Acquisition Program (AP) contracting officers should be aware and take into consideration that the Official Languages Act (OLA) does not make a distinction regarding whether bidding is national in scope where procurement notices and related documents are concerned. All notices or documents must be given the same consideration under the OLA.

4.20.1.4 Division of responsibilities regarding the translation of documents

Effective date: 2022-05-13

1. The division of responsibilities between Public Works and Government Services Canada and client departments regarding the translation of documents is found at Section 3.1 of Annex 1.1.1 Matrix of responsibilities between Public Works and Government Services Canada and client departments for the procurement of goods and services (generic).
2. In respect of the division of responsibilities, Acquisition Program (AP) contracting officers may advise, but must not direct client departments on how they are to meet their specific translation needs. It is for the client to decide on the manner of translation for its content, including any special or third-party services required to certify that a translation is equal in quality to the original document.
3. If concerns are encountered regarding the quality of translated content received from the client, AP contracting officers should contact them to resolve any outstanding issues prior to posting on the Government Electronic Tendering Service (GETS). This may include requesting that the client verify that the source of the translated content is consistent with Section 1.3 of the Canada.ca Style Guide, and to request that the client ensure that any related errors or deficiencies are corrected.

4.21 Ineligibility and Suspension Policy Clauses

Effective date: 2024-05-31

1. Further to the Ineligibility and Suspension Policy as summarized in section 3.51 Office of Supplier Integrity and Compliance overview, all solicitations must include the appropriate standard instructions and general conditions which include the Ineligibility and Suspension Policy Clauses. Any request for modification to the Ineligibility and Suspension Policy Clauses or exemption, in part or its entirety, from the application of the Ineligibility and Suspension Policy must be escalated to the Assistant Deputy Minister, Acquisitions Branch through the Acquisitions Program, by email at tpsgc.papolitiques-appolicy.pwgsc@tpsgc-pwgsc.gc.ca.
2. The Ineligibility and Suspension Policy identifies certain contracts and types of contracts that are exempt, however all solicitations and contracts must include the Ineligibility and Suspension Policy Clauses. As the Policy is incorporated by reference, any applicable exclusion will therefore apply.
3. In accordance with the Ineligibility and Suspension Policy Clauses and the Ineligibility and Suspension Policy, the following must be provided as part of the solicitation process.
   1. For a sole proprietor, the name of the owner
   2. For a private corporation, the names of all directors and the names of all individuals or entities that hold 5% or more of ownership
   3. For a public corporation, the names of all directors

   4. For a non-profit, the names of all directors

   5. For a general partnership, the names of all of the partners 

   6. For limited partnerships (LP) and limited liability partnerships (LLP): the names of all the general partners, in addition:

      1. if the general partner is a public or non-profit corporation, the names of all directors

      2. if the general partner is a private corporation the names of all of the directors as well as the names of all individuals or entities that hold 5% or more of ownership 

   7. For a trust: the names of the trustees:

      1. if the trustee is a public or non-profit corporation, the names of all directors

      2. if the trustee is a private corporation the names of all of the directors as well as the names of all individuals or entities that hold 5% or more of ownership

   8. Integrity Verification Services (IVS) will determine whether additional information is required and will ask the contracting officer to contact the offeror if needed.
   9. Contracting officers must notify the offeror and request that a list of names be provided within a recommended 10 business days. Failure to provide the names within the specified timeframe will render the offer or arrangement non-responsive.
   10. If an offeror is unable to certify to subsection d of the Ineligibility and Suspension Policy Clauses, it must submit a completed Integrity Declaration Form providing all requested information and details of any material event that may affect the status of itself, its affiliates or its proposed first-tier subcontractors under the Ineligibility and Suspension Policy. See 5.5.5 Certifications, declarations and proofs.
4. For existing contracts that do not contain the most recent Ineligibility and Suspension Policy Clauses:
   1. Contracting officers are to propose adding the new Ineligibility and Suspension Policy Clauses to the contract when exercising an option or modifying the terms of the contracts.
   2. Where the contractor refuses to make changes to the Ineligibility and Suspension Policy Clauses or provide the Certification as requested in the Template Letter for Addition of Clauses to an Existing Contract (see Annex 8.13: Letter templates for integrity), best efforts should be made to ensure that the contractor has a clear understanding of the terms of the new Ineligibility and Suspension Policy Clauses. This may include having a manager contact the contractor directly.
   3. Where the contractor still refuses to update the Ineligibility and Suspension Policy Clauses, the refusal should not prevent the continuation of business operations and the contract amendment may proceed.
   4. For assistance, contact the Acquisitions Program by email at tpsgc.papolitiques-appolicy.pwgsc@tpsgc-pwgsc.gc.ca.
5. See section 5.16 Integrity compliance for details on the process to be followed before contract award, issuance of a standing offer or supply arrangement, or publishing of a pre-qualified supplier list.

4.21.1 Administrative Agreements

Effective date: 2024-05-31

Administrative Agreements are managed by the Departmental Oversight Branch (DOB). They are negotiated agreements between Public Works and Government Services Canada (PWGSC) and contractor, current or potential, to, among other things:

1. suspend the period of ineligibility to contract with Canada;
2. avoid a suspension
3. enter into a contract where the Public Interest Exception (PIE) is invoked and where time is not of the essence; or
4. continue a contract where the contracting authority has a right to terminate the contract due to non-compliance with the Ineligibility and Suspension Policy.

Additional information on Administrative Agreements can be found in Section 10 Administrative Agreements of the Ineligibility and Suspension Policy.

4.21.2 Public Interest Exception (PIE)

Effective date: 2024-05-31

1. Where it is necessary to do so in the public interest as set out in Section 9 of the Ineligibility and Suspension Policy, a contracting officer may enter into a contract with an offeror, issue a standing offer with an offeror, or a supply arrangement with an offeror, that has been determined to be ineligible or has been suspended under the Ineligibility and Suspension Policy.
2. A Public Interest Exception (PIE) cannot be invoked in situations where the supplier has no capacity to contract with Canada pursuant to subsection 750(3) of the Criminal Code.
3. If a contract must be awarded to an ineligible or suspended offeror, the contracting officer must escalate the request to the deputy head or equivalent. The Registrar may require an offeror to enter into an administrative agreement before being awarded a contract further to a PIE.

4.21.3 Contracting with subcontractors

Effective date: 2024-05-31

1. When contracting with the Government of Canada, contractors understand that they cannot enter into a contract with first-tier subcontractors that have been determined to be ineligible or suspended under the Ineligibility and Suspension Policy. A first-tier subcontract is defined in the Policy as “a contract made between the offeror or contractor and a person (other than Canada) for carrying out or supplying goods for part or all of another contract between the supplier and Canada (which may include, without limitation, all the activities, services, goods, matters and things required to be done, delivered or performed by the supplier under a contract or real property agreement); and, a sublease made between the supplier and a person (other than Canada) for part of or all of premises leased by Canada to the supplier.”
2. Offerors are responsible for verifying the status of first-tier subcontractors prior to submitting an offer that identifies first-tier subcontractors and before entering into a contractual relationship with first-tier subcontractors. See section 12.1.2. of the Ineligibility and Suspension Policy for more information on this process.
3. If a contractor must enter into a first-tier subcontract with an ineligible or suspended subcontractor, they must first obtain written approval of the appropriate deputy head or delegate by forwarding this request to the contracting officer and providing a copy of the request to the Registrar. Contractors who enter into a first-tier subcontract with an ineligible or suspended first-tier subcontractor without the prior written consent from the relevant deputy head can be declared ineligible in accordance with the Ineligibility and Suspension Policy.
4. If a successful offeror wishes to replace a first-tier subcontractor that has been determined ineligible or suspended prior to contract award, a rigorous re-evaluation process that ensures that all offerors are treated fairly and equally must be followed. This process will be tailored, as appropriate, to individual situations and the specific procurement circumstances at hand.
5. Any request from successful offerors wishing to replace a now ineligible or suspended first-tier subcontractor, or from contractors wishing to enter into a first-tier subcontract with an ineligible or suspended subcontractor must be sent to the Acquisitions Program by email at tpsgc.papolitiques-appolicy.pwgsc@tpsgc-pwgsc.gc.ca.
6. In situations where there is a prolonged bid evaluation period, contracting officers must remind the successful offeror, using the template provided by Acquisitions Program, that:
   1. they are obligated to obtain PWGSC approval prior to entering into a contractual relationship with an ineligible or suspended first-tier subcontractor; or
   2. they can replace a now ineligible or suspended first-tier subcontractor, whose eligibility standing has changed since the offer was originally submitted, as long as the subcontractor suggested as a replacement is accepted by Canada.
7. Additional information regarding contracting with ineligible or suspended subcontractors can be found in Section 12 Obligations with respect to First-Tier Subcontractors of the Ineligibility and Suspension Policy.

4.25 The requirement

Effective date: 2010-01-11

1. The requirement could take the form of technical requirements for the procurement of goods or a Statement of Work for the procurement of services. Requirements must be defined and specifications and estimates established before bids/offers are solicited and contracts let, so that all potential suppliers are treated equally. Adequate specification details must be available to all interested or qualified suppliers.
2. For more information on the preparation of the requirement, consult Chapter 2 - Defining the requirement and requisition receipt.

4.30 General instructions for the preparation of a solicitation

Effective date: 2010-01-11

4.30.1 Requirement and Statement of Work

Effective date: 2013-04-25

The requirement must be clearly identified, the deliverables and the delivery schedule defined and the tasks must be included in the Statement of Work.

For more information, consult the Statement of Work Guide (available on GCpedia - Acquisitions Program Policy Suite - Procurement Process)(accessible only on the Government of Canada network).

4.30.10 Security in contracts

Effective date: 2022-12-01

1. For all proposed procurements with security requirements, including pre-contractual agreements, contracts, call-ups and service agreements, the Security Requirements Check List (SRCL) and the Statement of Work must be prepared by the client department and provided directly to the Contract Security Program (CSP) prior to sending the TPSGC-PWGSC 9200 Requisition for Goods and Services and Construction form to PWGSC Allocation Unit. Therefore, for every proposed procurement, the client department identifies the security requirements by completing an SRCL or by certifying in writing that there are no security requirements. The CSP will then provide the security clauses to the client department. The SRCL and the security clauses, or the Certification, must be provided along with the TPSGC-PWGSC 9200 Requisition for Goods and Services and Construction form and must be on file and available upon demand.

2. For solicitations with security requirements, including requests for proposals under competitive solicitations, and Requests for Standing Offers (RFSO) and Requests for Supply Arrangements (RFSA), procurement officers must provide instructions to bidders to submit a completed, dated and signed Application for Registration (AFR) form (accessible only on the Government of Canada network) as part of their proposal (i.e. bid response). Procurement officers must provide bidders until the date of the contract award to obtain the required security clearance. Once the solicitation process ends, procurement officers must submit the following to the CSP at tpsgc.ssiinscription-issregistration.pwgsc@tpsgc-pwgsc.gc.ca:

   1. A bid submission cover sheet (accessible only on the Government of Canada network) containing the solicitation number, anticipated contract award date as well as names of confirmed bidders;
   2. Copies of the completed AFR forms; and
   3. The CSP-approved Security Requirements Check List (SRCL) with the procurement officer’s signature in block 16.

   Failure to provide any of these documents will delay the organization security screening process for the bidders.

3. The role of the CSP, among other things, is to:
   1. review the SRCL, the Application for Registration (AFR) form (accessible only on the Government of Canada network), if applicable, and supporting documents that contain security details, such as the Statement of Work, or security and IT guides for accuracy, completeness, and authorized signatures. Security details in the supporting documents must align with the security categorizations on the SRCL;
   2. for potential contracts involving foreign-based suppliers and/or foreign classified information, ensure that the participating countries or international organizations have the appropriate bilateral security instrument (i.e. Memorandum of Understanding, arrangements, or agreements) in place with Canada (see 4.30.25 Security and international contracts). If foreign-based suppliers are expected to bid, a list of the applicable country(ies) of origin should be provided to the CSP’s International Industrial Security Directorate (IISD), and the appropriate country-specific clauses related to foreign-based suppliers will be provided;
   3. sign the SRCL form as the Contracting Security Authority and provide the applicable security clauses to the client department;
   4. provide information to the contracting officer on the security status of each bidder, contractor, or offeror, as applicable;
   5. provide to Canadian bidders, contractors, or offerors, information on the preparation and transmission of classified or protected information or assets. Classified information and assets must be forwarded to the CSP’s Document Control Section (DCS).
4. The fully signed SRCL must contain the following signatures:
   1. the Organization Project Authority must sign the form to indicate that the SRCL properly reflects the security categorizations of the requirement;
   2. the Organization Security Authority must also sign the form to indicate that the SRCL properly reflects the security categorizations of the requirement. The CSP will not process the SRCL and provide the applicable clauses if the above two signatures are not provided;
   3. the contracting officer must sign block 16 "Procurement Officer" only after the CSP has advised that the successful bidder has received their security clearance, which means just prior to contract award. The procurement officer’s signature on the SRCL confirms that:
      1. all information on file related to the contract security requirement has been provided to the CSP for their review prior to the solicitation stage;
      2. the contracting officer intends to attach the fully completed and signed SRCL, as well as, insert the security clauses provided by the CSP into the contract; and
      3. The CSP has provided confirmation that the proposed contractor meets the security requirements.
         Important: When security capabilities such as document safeguarding, IT (including cloud computing), Production and/or COMSEC are required, seek assurance of these specific security types from the CSP as they are contract-specific.
   4. The CSP signs as indicated in (c) (iii) above.
5. Client departments must provide the hard copy of the SRCL form Security Requirements Check List (SRCL) or use the online Security Requirements Check List (SRCL) service. To use the online service register online or contact the Contract Security Program.
6. Contracting officers must inform the CSP at tpsgc.ssilvers-isssrcl.pwgsc@tpsgc-pwgsc.gc.ca of the anticipated posting and closing dates of the solicitation, and notify the CSP once the tender has been posted.
7. If a requirement is cancelled, the contracting officer must advise the CSP immediately so that the file can be appropriately closed.
8. Contracting officers must not reuse previously approved security clauses, except in processes or instruments that have been pre-approved by the CSP.

9. At its discretion, the CSP may make an exception to the new process for sponsorship requests to support ministerial mandate letter commitments and Government of Canada priorities. In such cases, client departments and contracting officers can sponsor suppliers for private sector personnel and organization security screenings, even if the supplier is not an active participant in a solicitation process. To sponsor a supplier under such circumstances, departments or contracting officers must provide the following documents to the CSP at tpsgc.ssiinscription-issregistration.pwgsc@tpsgc-pwgsc.gc.ca:

   1. A completed Request for private sector organization screening (PSOS) form, signed by senior management (i.e. Director level or higher); and
   2. A justification for the screening against a Minister’s Mandate Letter or other Government of Canada priorities.

   To sponsor a supplier for a Facility Security Clearance (FSC) and/or document safeguarding capability, the contracting officer will also need to provide a duly completed Security Requirements Check List (SRCL) as well as a Statement of Work to the CSP with their PSOS form and valid justification.

4.30.15 Security in solicitations

Effective date: 2022-05-02

1. When there are security requirements, the evaluation section or the security requirements section of the solicitation documents must clearly state when security requirements must be met. The contracting officer should be fully aware of the time frames required for the security screenings to be carried out.
2. The completed SRCL must be attached as an annex to the solicitation, though the signature page may be omitted.
3. In certain cases, suppliers and their personnel may require security clearances for bidders’ conferences, site visits, or to access protected or classified documents during the bid solicitation stage and for the purpose of preparing their bids. In such cases, the Contract Security Program (CSP) may grant a provisional security clearance to eligible bidders and their respective bid preparation teams if they are not already cleared into the CSP. These provisional security clearances will only be valid for the duration of the bid solicitation stage.
4. To request a provisional security clearance for eligible bidders, procurement officers must submit the following documents to the CSP at tpsgc.ssiinscription-issregistration.pwgsc@tpsgc-pwgsc.gc.ca:
   1. Completed Request for private sector organization screening (PSOS) form for each bidder requiring access;
   2. A completed bid submission cover sheet (accessible only on the Government of Canada network);
   3. Solicitation number and timelines associated with the letter of interest, request for information, request for proposal, etc.;
   4. CSP-approved Security Requirements Check List (SRCL);
   5. Statement of Work or substantive description of work (if not already provided); and
   6. Application for Registration (AFR) form (accessible only on the Government of Canada network) completed by each bidder requiring access.
5. For procurements with private sector personnel or organization security screening requirements that must be met as a mandatory requirement for contract award, contracting officers must include the CSP’s AFR form with bid solicitation documents. Any supplier who wishes to bid will be required to complete and submit the AFR form with their bid. Suppliers that are already registered with the CSP will need to complete the AFR even if they already hold the necessary security clearances.
6. Once all the bids have been received, the contracting officer overseeing the bid solicitation process will submit a completed bid submission cover sheet (accessible only on the Government of Canada network), CSP-approved SRCL, and the completed AFR forms for each bidder to the CSP at tpsgc.ssiinscription-issregistration.pwgsc@tpsgc-pwgsc.gc.ca. AFR forms submitted with incomplete bids (where known) should not be forwarded to the CSP. The AFR form provides the CSP with mandatory organization based information required to conduct background and security screenings.
7. Upon review of the AFR forms, the CSP will keep the contracting officer apprised of the progress of all screening files.
8. Delays in the organization security screening process can be expected when additional verifications need to be conducted for cause. If the CSP requires more time to clear a successful bidder, it will inform the contracting officer. If the contract needs to be awarded urgently, the contracting officer and the client department’s Chief Security Officer (CSO) and technical/project authority can consult the CSP to obtain advice and guidance on the development of an acceptable risk mitigation strategy so the contract can be awarded before the security clearance process is completed. If risk mitigation measures proposed by the contracting officer and client departments cannot be implemented for the successful bidder, or agreed upon by all parties (including the CSP), the contracting authority will either need to delay contract award until the recommended supplier obtains the appropriate security clearance, or where the recommended supplier cannot obtain the appropriate security clearance, select the next highest-ranked technically compliant bidder.
9. Once the CSP has completed its screening process, the CSP will inform the contracting officer of the results of the screening(s) and confirm in writing if bidders meet the security requirements in advance of contract award.
10. For procurements with security requirements for work to be performed or documents safeguarded at the contractor’s facilities, security screening has to be done for those facilities before any work can start at those facilities. The contractor’s address indicated in the bid document is not necessarily the location of where the contractor intends to perform work or keep documents. It is important for the CSP to know, as early as possible in the process, in which of the contractor’s facilities the work will be performed or the government's sensitive information/assets will be safeguarded if issued a contract or call-up. The CSP will perform a contract-specific inspection of the contractor’s site(s).
11. In the bid solicitation document, the contracting officer needs to add, under the Security references "Location(s) of Work Performance" for the contractor to complete.

4.30.20 Security in Standing Offers and Supply Arrangements

Effective date: 2022-05-02

1. When the contracting officer and the client department have determined that it is appropriate to use a standing offer or supply arrangement method of supply for procurements with a contract security requirement, the Request for a Standing Offer (RFSO) or Request for a Supply Arrangement (RFSA) should specify the minimum level of security clearance required as well as the circumstances under which a higher level would be required. Instructions to users of the arrangement must be clear on:

   1. how to identify which level of security applies in resulting contracts; and
   2. the client department's responsibility in confirming with the Contract Security Program (CSP), prior to issuing a contract or call-up, that the suppliers meets the security requirement.

   Important: When security capabilities such as document safeguarding, IT (including cloud computing), Production and/or COMSEC are required, seek assurance of these specific security types from the CSP as they are contract-specific.

2. Resulting call-ups and contracts with security requirements must identify the applicable security categorization, and the applicable SRCL must be attached to the call-up or contract.
3. A copy of all awarded call-ups and contracts with security requirements must be sent to the CSP at tpsgc.ssicontrats-isscontracts.pwgsc@tpsgc-pwgsc.gc.ca.

4.30.25 Security and international contracts

Effective date: 2022-05-02

1. As per Canadian international security commitments, the Designated Security Authority for Canada (Canada’s DSA) is the Director of International Industrial Security Directorate (IISD) within the Contract Security Program (CSP). Canada’s DSA is the authority for confirming compliance with the international security requirements involving foreign-based suppliers and/or foreign classified information and assets.
2. Where a procurement may involve foreign-based suppliers, or when the contracted work requires access to international organizations (e.g., NATO) or foreign classified information, assets, or sites, the contracting officer must submit the Statement of Work to the CSP’s IISD as soon as possible for a review of any security wording to ensure compliance with Canada’s international security commitments. The CSP’s IISD can be reached at tpsgc.dgsssiprojetintl-dobissintlproject.pwgsc@tpsgc-pwgsc.gc.ca.
3. Once they become aware of potential contracts with foreign-based suppliers, the contracting officer must inform the CSP’s IISD as soon as possible of the country of origin for each foreign-based supplier that is interested in participating in the procurement. The CSP’s IISD will then confirm the international security screening requirements based on the applicable international bilateral security instrument in place with the relevant foreign entity and other Canadian international security commitments. If the exchange of sensitive information is permitted under these international security commitments, country-specific security clauses will be provided to the contracting officer.
4. The CSP’s IISD will liaise with the appropriate foreign security authorities to confirm to the contracting officer that the foreign-based supplier has completed the necessary security screening requirements before the foreign-based supplier is authorized to access Canada’s sensitive information.
5. Before and during the contract, transmittal of Canada’s sensitive information or assets out of Canada, or transmittal of NATO or foreign classified information within Canada must be approved and normally exchanged through the CSP’s IISD as per Canada’s international security requirements.

4.30.30 Foreign ownership, control or influence

Effective date: 2022-05-02

1. A Foreign Ownership, Control or Influence (FOCI) evaluation assesses the nature and extent of authority, ownership, control or influence that foreign interests may have over Canadian organizations.
2. The evaluation helps determine and mitigate the risk that unauthorized third parties may exert undue influence over a Canadian organization to access government classified information, assets or sites.
3. A FOCI evaluation is mandatory when the contracted work requires access to international organizations (e.g., NATO) or foreign classified information, assets or sites, access to COMSEC information and assets, or as directed by the Contract Security Program (CSP).
4. Canada’s obligations and commitments to conduct FOCI evaluations are outlined in the IT Security Directive for the Control of COMSEC Materiel in the Canadian Private Sector (ITSD-6A), the North Atlantic Treaty Organization (NATO) Security Policy and various international bilateral security instruments between Canada and its international partners.
5. Suppliers must be informed of the requirement for a FOCI evaluation in the bid solicitation documents however, completed packages from suppliers should only be requested after the bid evaluation process has determined which supplier(s) will be awarded a contract. The material that a supplier has to provide for such an evaluation is often extensive and time consuming to gather.
6. A FOCI evaluation is requirement-specific and must be completed prior to granting access to sensitive information, assets or sites is permitted. The FOCI evaluation remains valid for the duration of the contract and as long as the degree of potential foreign control or influence of the private organization remains unchanged. Re-evaluations are conducted when a new contractual FOCI requirement is identified or in cases where a certain type of change has impacted the nature and extent of foreign ownership, control or influence over the private organization.

4.30.35 Information on Comprehensive Land Claims Agreements

Effective date: 2015-09-24

For more information on Comprehensive Land Claims Agreements, consult 9.35 Comprehensive Land Claims Agreements (CLCAs).

4.30.40 Information on the Procurement Strategy for Indigenous Business

Effective date: 2022-05-12

For more information on the Procurement Strategy for Indigenous Business, consult 9.40 Procurement Strategy for Indigenous Business.

4.30.45 Standard instructions, clauses and conditions

Effective date: 2010-01-11

Standard instructions, clauses and conditions set out in the Standard Acquisition Clauses and Conditions (SACC) Manual issued by PWGSC may be added in the solicitation documents to meet specific commodity needs. Contracting officers must ensure that there are no inconsistencies with the applicable general conditions.

4.30.45.1 Equivalent products

Effective date: 2019-05-30

1. When there is no alternative to specifying a particular manufactured product, the solicitation should, whenever possible, include SACC Manual clause B3000T for equivalent products. Before issuing the solicitation, the contracting officer should contact the client department to discuss the potential for equivalent products and any mandatory performance criteria related to the item being specified that must be included in the solicitation to ensure proper evaluation of a substitute product's equivalency. Contracting officers must ensure that all references to a manufacturer's brand name, model and/or part number contained anywhere within the solicitation are followed by the words "or equivalent".
2. For procurements subject to the Canadian Free Trade Agreement (CFTA) or to any of Canada’s international trade agreements, provision for equivalent products must be made. Contracting officers must give consideration to supplier claims of equivalence and have some way to determine if the proposed products are, indeed, equivalent.

4.30.45.5 No substitute products

Effective date: 2019-05-30

When a manufacturer's brand name, model and/or part number are used in the item description and substitutes will not be considered in a solicitation, SACC Manual clause B4024T should be used. This clause must not be used in solicitations subject to the Canadian Free Trade Agreement (CFTA) or to any of Canada’s international trade agreements.

4.30.45.10 Multi-item bids/offers

Effective date: 2010-08-16

1. A requirement can either be on an aggregate basis or an item-by-item basis or a combination of the two. If it is on aggregate basis, the entire requirement will be awarded to a single supplier. An item by item basis will be used, for example to obtain better prices for certain products or to provide complete coverage when one supplier cannot meet the entire requirement.
2. The evaluation of multi-item bids/offers should be governed by cost-benefit considerations.
3. The savings generated from the split of a requirement into more than one contract should be compared with the additional costs usually associated with the award of multiple contracts or issuance of multiple standing offers:
   1. costs to PWGSC, for example, the costs of awarding, administering and closing-out contracts;
   2. costs to the client department, for example, extra billing and inspection, and other related administrative costs; and
   3. costs to the contractor, for example, transportation costs, price per unit.
4. Sectors/regions should determine their own administrative premiums for costs such as those identified in paragraphs (i) and (ii) above.
5. The savings from awarding more than one contract must also be weighed against possible disadvantages, such as:
   1. the difference in delivery times for components provided by different suppliers;
   2. the compatibility of items supplied by different suppliers; and
   3. the service or maintenance of items after delivery.
6. While the standard instructions of the bids and offers provide for their acceptance "in whole or in part", it is sometimes appropriate to emphasize the option to award a contract or issue a standing offer, on either an aggregate or an item-by-item basis. When using the aggregate or item-by-item basis, SACC Manual clause A0272T should be used for bid solicitations and M0032T for Request for a Standing Offer (RFSOs).

4.30.45.15 Bidders' conferences and site visits

Effective date: 2014-06-26

1. The purpose of a bidders' conference is to provide information to suppliers and to ensure that all suppliers receive the same information. For detailed information on bidder’s conferences, refer to section 3.115 Bidders' conference.
2. Site visits are meetings held on site to provide suppliers with opportunities to view and assess aspects of the work that cannot be adequately described in performance specifications or the statement of work. For more information on site visits, please see section 3.116 Site visits.

4.30.45.20 Intellectual Property

Effective date: 2010-01-11

1. It is the policy of the Government of Canada that the contractor be the owner of any foreground information (as defined in the conditions applicable to the contract) created by the contractor in performance of the contract. This is however subject to some exceptions set out in Section 6 of TB Policy, ARCHIVED - Title to Intellectual Property Arising Under Crown Procurement Contracts.
2. Client departments should be requested to fully justify any requests to retain ownership of intellectual property (IP), as provided for in the policy, except for the case of non-software copyright, where the practice of PWGSC practice is to make Canada ownership the norm.
3. The solicitation should make clear to suppliers the ownership of any IP rights, as determined by the client department. SACC Manual clauses may be used in conjunction with the general conditions and supplemental general conditions to meet the requirement of the client department. See Annex 4.2: Intellectual Property.

4.30.45.25 Former public servants

Effective date: 2015-02-25

1. Former public servants must comply with the Conflict of Interest Act. This is a term of all general conditions and forms part of all solicitations.
2. For service contracts, Standard Acquisition Clauses and Conditions (SACC) Manual clauses A3025T, A3026T, M3025T and M3026T, as applicable, must be used in all solicitations to ensure compliance with former public servant policies. Suppliers are required to self-identify as a former public servant, if applicable, and to make available to Canada any additional details of their status with respect to cash-out amounts and time equivalents, pension payment details and status of ownership.
3. Former public servants must provide the required information identified in the SACC clause (A3025T, A3026T, M3025T, or M3026T) before contract award or issuance of a standing offer. Canada will declare a bid or offer non-responsive if the required information is not completed and submitted as requested.
4. The required information will be a condition precedent to contract award, as opposed to a mandatory requirement for evaluation purposes.
5. All information that suppliers provide to Canada is subject to verification by Canada during the evaluation period (before award of a contract) and after award of a contract to ensure compliance. For more information on definitions and exceptional contracting authorities, consult Chapter 3 - Procurement strategy and Chapter 6 - Approvals and authorities.

4.30.50 Taxes and duties

Effective date: 2010-01-11

For more information on taxes and duties, consult annexes Annex 4.3: Taxes and duties, Annex 4.4: Supplies exempt from Goods and Services Tax/Harmonized Sales Tax and Annex 4.5: Goods Subject to Excise Tax.

4.30.55 Ontario Labour Legislation

Effective date: 2010-01-11

Solicitations for janitorial, food catering and security services must include SACC Manual clause A0075T whenever information concerning each employee of a previous supplier must be provided to other suppliers, in accordance with the Ontario labour legislation. See 4.70.105 Ontario Labour Legislation and Annex 4.6: Ontario Labour Legislation.

4.30.60 Communications notification

Effective date: 2012-07-16

Process cancelled as per direction from Communications Branch in July 2010.

4.35 Evaluation criteria

Effective date: 2010-01-11

All evaluation criteria must be clearly specified in the solicitation document and their relative weighing and importance must be described. If applicable, the solicitation must also indicate whether, and under what conditions, alternatives or substitutes will be considered. Additionally, consideration should be given to when a condition will have to be met, that is a condition of contract award versus a condition of bid submission. For example, a certificate of insurance may not be available at the time of submission as it may only be issued on award of a contract. In this case, a requirement for a certificate of insurability may be more appropriate.

4.35.1 Mandatory criteria

Effective date: 2012-07-16

Contracting officers must ensure that mandatory requirements represent truly essential requirements, since not even a single mandatory requirement can be later waived when faced with an otherwise good bid/offer/arrangement. Contracting officers should discuss this with client departments since the bulk of the mandatory requirements are typically defined by the client department. Mandatory evaluation criteria identify the minimum requirements that are essential to the successful completion of the work. Contracting officers must minimize the number of mandatory criteria in order to increase probability of receiving responsive bids/offers/arrangements. Mandatory criteria must be clearly specified in the solicitation document and may include:

1. licensing requirements;
2. minimum performance characteristics of equipment;
3. requirements for delivery dates or condition;
4. essential minimum qualifications or experience of proposed personnel;
5. budget limitations.

4.35.5 Rated criteria

Effective date: 2010-01-11

1. Only bids/offers/arrangements that meet the mandatory criteria are subject to point rating, as applicable. Rated criteria are used to assess various elements of the technical bid/offer/arrangement so that the relative merits of each bid/offer/arrangement can be used to distinguish one bid/offer/arrangement from another. The maximum points that can be achieved for each rated criterion must be specified in the solicitation document.
2. When point rating is used, bids/offers/arrangements may have to achieve a minimum number of points overall to be considered responsive, and often they must achieve a minimum number of points for certain individual criteria. Solicitation documents must clearly identify any minimum thresholds and clearly indicate that such minimums are mandatory. When assigning weights to each criterion, the contracting officer and the client department should ensure that a high aggregate of points for minor criteria does not overcompensate for a low aggregate of points for major criteria.
3. When evaluating knowledge and experience is important, contracting officers must specify in the solicitation documents how knowledge and experience will be assessed. In the case of joint ventures for example, whose experience will be assessed, i.e. the experience of a joint venture member only or a pooling of experience of all the members.

4.40 Evaluation process and method of selection

Effective date: 2022-10-20

1. The evaluation process and the method of selection such a lowest price, best value, etc., must be clearly described in the solicitation documents.
2. For detailed guidance on the development of evaluation and selection criteria, consult the Basic Guide for Bid Evaluation Process (available on GCpedia - Acquisitions Program Policy Suite - Procurement Process) (accessible only on the Government of Canada network) and the Phased Bid Compliance Process (PBCP) Handbook (available on GCpedia - Phased Bid Compliance Process)(accessible only on the Government of Canada network).
3. For the basis of selection, contracting officers must use the appropriate SACC Manual clauses; for example: A0027T, A0031T, A0034T, A0035T, A0036T, A0069T, M0031T, M0034T, M0035T, M0069T, S1001T, S1002T, etc.
4. The Canadian International Trade Tribunal (CITT) has determined that although suppliers may be aware of the department's normal practice to award contracts to the lowest-responsive supplier, this does not relieve it of the obligation to state its method of selection in the solicitation. If the department intends to rely on a publicly available policy, it must be incorporated into the solicitation.
5. For more information on evaluation procedures, consult Chapter 5 - Evaluation and selecting the contractor.

4.45 Certifications and additional information

Effective date: 2024-05-31

A requirement for certifications must be included in all solicitation documents. Offerors must provide the required certifications to be awarded a contract or issued a standing offer or supply arrangement. Canada will declare the offer non-responsive if the required certifications are not completed and submitted as requested. Compliance with the certifications provided to Canada is subject to verification:

• during the evaluation period (before award of a contract, or issuance of a standing offer or supply arrangement), or
• after award of a contract, or issuance of a standing offer or supply arrangement, during the entire period of the contract, standing offer or supply arrangement.

Non-compliance with certification will or may lead to the termination of a contract.

In some cases, certifications are required as a precedent to contract award or the issuance of a standing offer or supply arrangement. In other cases, the certifications are required at solicitation closing. Some common certifications are provided below.

1. Federal Contractors Program for Employment Equity (See 5.5.5 Certifications, declarations and proofs)
   1. The Federal Contractors Program (FCP) for employment equity is a program administered by Employment and Social Development Canada (ESDC) – Labour Program. The FCP is intended to address employment disadvantages for four designated groups: women, Indigenous 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.
   2. Public Works and Government Services Canada (PWGSC) is to request and obtain from the bidder or offeror, the necessary evidence of compliance with the FCP in its procurement, in order to comply with the Employment Equity Act.
   3. The FCP requires that bidders subject to the FCP, including a bidder who is a member of a joint venture, bidding for federal government contracts, certify that they have not been declared non-compliant with the FCP by ESDC-Labour Program and to make a formal commitment to implement employment equity. Consult Annex 5.1 Federal Contractors Program for employment equity for more information.
2. Canadian content (See 5.5.5 Certifications, declarations and proofs)
   1. When the Canadian Content Policy applies to a requirement, the appropriate SACC Manual Canadian content certification clause must be included in the solicitation. These clauses describe the type of solicitation (limited, open or conditionally limited).
   2. SACC Manual clause A3050T, which defines Canadian content, must also be included in the solicitation. See Chapter 3 - Procurement strategy.
3. Price certification and rate certification (See 5.5.5 Certifications, declarations and proofs)
   1. A price certification or a rate certification is required for all negotiated firm-price and fixed-time rate contracts valued at $50,000 or more, for the acquisition of commercial or non-commercial goods and/or services.
   2. Price certification clauses:
      1. C0001T: acquisition of goods and/or services from foreign-based suppliers;
      2. C0002T: acquisition of commercial goods and/or services, other than petroleum products, from Canadian-based suppliers, other than agency and resale outlets;
      3. C0003T: acquisition of non-commercial goods and/or services from Canadian-based suppliers;
      4. C0004T: acquisition of commercial goods and/or services from Canadian agency and resale outlets, including subsidiaries of foreign-based manufacturers; and
      5. C0006T: acquisition of petroleum products.
   3. Rate certification clauses:
      1. C0600T: acquisition of commercial goods and/or services from Canadian-based suppliers; and
      2. C0601T: acquisition of non-commercial goods and/or services from Canadian-based suppliers.
4. Ineligibility and Suspension Policy Clauses (See 5.5.5 Certifications, declarations and proofs)
   1. Ineligibility and Suspension Policy Clauses must be included in all procurement instruments.
   2. By submitting an offer or arrangement, the offeror is certifying that they are in compliance with the Ineligibility and Suspension Policy Clauses.
   3. Integrity Declaration Form: The offeror must provide a completed Integrity Declaration Form with its offer only if it is unable to provide any of the certifications listed in the Ineligibility and Suspension Policy Clauses.

4.45.1 Code of Conduct (certification)

Effective date: 2024-05-31

The content of this section was reviewed and moved to section 4.21 Ineligibility and Suspension Policy Clauses.

For reference purposes, section 4.45.1 is available in the Supply Manual Archive (accessible only on the Government of Canada network), Version 2013-7.

4.50 Financial security

Effective date: 2022-12-01

1. Financial security can be required from a supplier to:
   1. protect Canada against loss should a supplier fail to enter into a contract (bid financial security);
   2. ensure that a contractor's obligations under a contract are carried out (contract financial security); or
   3. protect subcontractors and material suppliers (payment bond).
2. The financial security may be a security deposit (government guaranteed bonds, bills of exchange, irrevocable standby letters of credit or a surety bond).
3. The decision to obtain financial security for competitive solicitations must be taken before issuing the solicitation and the solicitation must state clearly what is mandatory.
4. Suppliers have the right to determine which form of financial security they will provide. See SACC Manual clauses E0004T and E0007C.
5. Government guaranteed bonds will be valued at current value.
6. Contracting authorities must ensure that any company selected to provide financial security is licensed to provide it in the jurisdiction of the eventual contract, as per section 4.11.3 of the Directive on the Management of Procurement.
7. For more information on risk management, consult Chapter 3 - Procurement strategy; for information on the handling of bid and contract security, consult Chapter 7 - Award of contracts and issuance of Standing Offers and Supply Arrangements.

4.50.1 Surety bond forms

Effective date: 2010-01-11

The surety bond forms are:

1. PWGSC- TPSGC 504, Bid Bond;
2. PWGSC- TPSGC 505, Performance Bond; and
3. PWGSC- TPSGC 506, Labour and Material Payment Bond.

4.50.5 Bid financial security

Effective date: 2022-12-01

1. The decision to obtain bid financial security should take into account the following:
   1. the extent of bidder prequalification possibility;
   2. the type of work and custom of the trade;
   3. the likelihood of attempts to withdraw;
   4. the consequences of the failure or inability of the bidder to enter into a contract.
2. The amount of bid financial security must be the minimum required to ensure that the bidder enters into the contract. SACC Manual clause E0004T must be used in conjunction with E0008T when bid financial security is required. When clause E0004T is used to require bid financial security and a contract financial security is required under the resulting contract, it must be used with E0003T, E0005C and E0008C. When clause E0004T is used to require bid financial security, but no contract financial security is required, clause E0009T must be used.
3. If the estimated contract value is $250,000 or less, the security should not exceed 10 percent of the bid price. In the case of larger acquisition values, the contracting officer will determine the percentage.
4. Any letter of credit received by Canada must have an appropriate expiry date. The letter of credit should not have its expiry date coincide with the projected cessation of the risk that it covers. For instance, the expiry date stated in the letter of credit should not be the same date as the one projected for the contract award. The expiry date should allow for a comfortable turn-around time from the estimated date of the contract award, to ensure that the contracting officer is satisfied that the bidder has discharged its obligations for which the letter of credit was provided. If the bidder has not met its obligations, the contracting officer must have sufficient time to prepare and present the required demand for payment under the letter of credit.
5. To prevent problems in obtaining contract financial security (if required) at a later date, the solicitation must specify that, if the required contract security is not provided within the period specified, a security deposit (government guaranteed bonds, bills of exchange, irrevocable standby letters of credit) given as bid security will be forfeited or payment demands will be made against the bid support letter of credit. The amount forfeited must not exceed the difference between the bid price and the amount of the contract entered into by Canada. This provision is also contained in form PWGSC- TPSGC 504.
6. Unless the acceptable form of security is limited to security deposits (government guaranteed bonds, bills of exchange, irrevocable standby letters of credit), the solicitation must include a list of insurance companies licensed to provide financial security in the jurisdiction of the eventual contract, together with the applicable surety bond form. Deviation from the surety bond form will be permitted only with the prior approval of Legal Services.
7. For more information on procedures on the handling bid security, consult Annex 5.2: Handling, custody and safekeeping of financial security/handling of bills of exchange.
   
   The contracting officer must instruct the specified bid receiving unit of the handling of bid securities received.

4.50.10 Contract financial security

Effective date: 2011-05-16

1. For the successful supplier, the contracting officer must ensure that bid financial security is not released until the contractor provides the required contract financial security. The decision to obtain contract financial security, and the amount of security required, should take into account the following:
   1. the type of work and custom of the trade;
   2. the consequences of the failure or inability of the contractor to carry out its contractual obligations;
   3. costs associated with the provision of security, compared with the degree of risk involved.
2. For construction contracts with an estimated value of $100,000 or more, contract financial security must be sought.
3. Decisions as to whether and how much financial security will be required should be based on the circumstances of the individual procurement. Some businesses may encounter difficulty in obtaining certain kinds of security; therefore, contracting officers should be sensitive to this and not require unreasonable contract security. In certain cases, perhaps an advance form of security may not be needed; holdbacks in contract payment may suffice. Treasury Board recommends that financial security not be considered until the estimated cost of the contract exceeds $100,000. However, issues relating to the nature of the requirement are usually more important than the dollar value.
4. When the decision to obtain contract financial security has been taken, the contracting officer must stipulate in the solicitation documents that contract financial security will be required. When the contractor is required to provide contract financial security after contract award, SACC Manual clause E0007C must be used in conjunction with E0008C. When the successful supplier must provide a security deposit as contract financial security, clause E0005C must be used in conjunction with E0008C.

4.55 Controlled goods

Effective date: 2020-11-19

Whenever the controlled goods program applies to a requirement, the following applies:

1. Controlled goods cannot be released to persons that are not registered, exempt or excluded by the Controlled Goods Program (CGP). For more information on controlled goods, visit the Controlled Goods Directorate website.
2. SACC Manual clause A9130T must be included in solicitations when there is production of or access to controlled goods.
3. When the solicitation contains controlled goods (for example, a drawing or Statement of Work), only those controlled goods cannot be released to any persons that are not registered, exempt or excluded under the CGP. The remainders of the items are processed as usual.
   Note: "Not all drawings" or Statements of Work are controlled goods themselves, even if they relate to controlled goods.
4. Registered Persons are listed on the Controlled Goods Directorate (CGD) website. (Note: the information contained in this list is for information purposes only.) This list is updated daily based on information provided by registered persons. Canada cannot guarantee the completeness of the information contained in this list, as some registered persons have asked not to be listed. If a registered person does not appear in this list, contact CGD at 1-866-368-4646 or by email at dmc-cgd@tpsgc-pwgsc.gc.ca for further verification. Once the contracting officer has verified that the person requesting the controlled goods is registered, the solicitation documents, drawings, statements of work, etc. containing the controlled goods may then be released through adequate means to preclude the examination of controlled goods by unauthorized persons.
5. An export permit to ship a controlled Technical Data Package (TDP) is required to all countries except, in most cases, the United States. Contracting officers must first determine if their TDP is, in fact, controlled. The ultimate authority for making this determination is the Export Controls Division, Department of Foreign Affairs and International Trade Canada (DFAIT). A determination needs to be made as to whether or not the supplier has access to controlled goods, in Canada, under the Defence Production Act.
6. Generally, if the TDP contains technical information for the "development, production or use" of an item controlled under the DFAIT's Export Control List (most items under Group 2; Item 5504 under Group 5; and all items under Group 6), then the TDP is also controlled. Refer also to a shorter version, published by CGD, of the items that are controlled. If the TDP is designed solely for the solicitation of bids, it is probably not controlled. Contracting officers should contact the Export Controls Division, DFAIT, at 613-996-2387, for assistance in making this determination.
7. Security precautions for transferring controlled goods will vary, depending on the type and size of the controlled goods. Safeguards chosen must adequately preclude the examination and unauthorized transfer of controlled goods by a person who is not registered, exempt or excluded under the CGP and should be such as to make tampering evident. These include:
   1. using double envelopes, security seals and security-sealed containers;
   2. marking transfer containers with a return address;
   3. recording how the controlled good is being transferred;
   4. determining the reliability of a postal or courier service;
   5. transferring controlled goods by first class or registered mail, or by a reliable postal or courier service that offers: proof of mailing, a record while in transit, and a record of delivery;
   6. recording the controlled good being transferred, who is transferring it, and the identity and address of the person to whom it was transferred; or
   7. upon receipt, examining the packaging and sealing devices, and reporting tampering.

4.60 Transportation costs

Effective date: 2010-01-11

1. For most requirements with an estimated expenditure of $25,000 or more, including Goods and Services/Harmonized Sales Tax (GST/HST), with known delivery points, bids/offers should be solicited on the basis of Free On-Board (FOB) destination.
2. For requirements with unknown delivery points, bids/offers should be solicited on the basis of FOB origin only. See the Glossary "Incoterms."
3. When Incoterms are used, contracting officers must ensure that suppliers understand the differences in the acronyms used particularly those that use the same letters: FOB in Incoterms means Free On-Board, not Freight on Board.
4. For more information on transportation costs and the applicable SACC Manual clauses to be used for good requirements, consult 4.70.100 Transportation costs information.

4.65 Exchange rate fluctuation risk mitigation

Effective date: 2017-08-17

1. The exchange rate risk on the purchase of materials, components or products from outside Canada is generally considered a normal business risk for suppliers. However, in some cases, it may be in the interest of Canada to accept the risks and benefits of currency fluctuations. In such circumstances, the bidder may be offered the choice to mitigate their risk by having an exchange rate fluctuation provision included in the contract.
2. When determining if an exchange rate fluctuation provision will be included, contracting officers may consider such factors as: the likelihood that currency fluctuations will reduce the number of bidders; the duration and value of the contract; previous concerns of suppliers; potential impact on prices, and the willingness and/or ability of the client department to accept such provision.
3. An exchange rate fluctuation provision would not generally be applied to procurements done by the European and Washington regions, or procurements on the behalf of the Canadian Commercial Corporation. This provision should also not be used with telephone buys nor with cost reimbursable contracts (or cost reimbursable items of a contract).
4. The solicitation must indicate if an exchange rate fluctuation provision is included as a choice for the bidder, and explain clearly how such provision will be applied. The solicitation must indicate the method for determining the initial exchange rate. For example the initial exchange rate is the Bank of Canada rate published on the solicitation closing date. The Bank of Canada publishes its rates each business day by 16:30 Eastern Time (ET).
5. The solicitation must also indicate the date to be used in determining the exchange rate for adjustment purposes. This will be the rate published by the Bank of Canada on such a date, by 16:30 ET. It is often preferable to use the delivery date as the exchange rate for adjustment purposes. Contracting officers may also choose to use the direct shipment date, as indicated on the Canada Customs Coding Form, CBSA Form B3-3, or some other date. Contracting officers must always ensure that the solicitation (and contract) clearly specifies the method for determining the date for the exchange rate for adjustment. Where a modification to a clause is required, contracting officers are encouraged to work with the Procurement Process Tools Division (outilsapprov.proctools@tpsgc-pwgsc.gc.ca) and legal services to modify the appropriate Standard Acquisition Clauses and Conditions (SACC) Manual clause. Generally, bids must be submitted in Canadian currency.
6. Exchange rate fluctuation provisions must be identified in procurement plans, contract requests, and Contract Planning and Advance Approvals (CPAA), since it is part of the basis of payment and may impact the total contract costs. The client should be informed of and agree with the decision to use this provision in the solicitation and the contract. The client should provide a buffer in the commitment, or alternatively, be aware that a supplemental section 32 certification of the Financial Administration Act may become necessary in order for the payment to be made. The client project authority may need to inform the department financial authority of a potential impact to the commitment. Approval of the procurement/contract does not need to be sought again due to any increases in the total contract value resulting from exchange rate fluctuation that may occur.
7. To have the exchange rate fluctuation provision apply, bidders must identify this choice as per the instructions in subsection j. The FCC is defined as the portion of the price or rate that will be directly affected by exchange rate fluctuation. The FCC should include all related taxes, duties and other costs paid by the supplier and which are to be included in the adjustment amount.
8. When bidders are offered the choice to mitigate their risk against the exchange rate fluctuation, SACC Manual clause C3010T must be incorporated by reference in the solicitation, and clause C3015C, which may be used for various methods of payment such as milestone and cost incurred progress payments, must be used in the resulting contract clauses.
9. Whenever exchange rate fluctuation is not expected to be an issue, and therefore it is not proposed to offer mitigation against it, the SACC Manual clause C3011T must be included in the solicitation to clearly indicate to bidders that a request for exchange rate adjustment will not be considered and that inclusion of such request in the bid will render the bid non-responsive.
10. To have the exchange rate fluctuation provision apply, the bidders must identify this choice and clearly indicate the applicable FCC, generally in Canadian dollars, and the applicable foreign currency for each line item in the financial proposal for which the adjustment will be applied. Bidders may indicate this using form PWGSC-TPSGC 450 Claim for Exchange Rate Adjustments. The FCC amount will then be used in the calculation of the adjustment amount when invoiced and paid.
11. The exchange rate adjustment amount will be calculated by the successful bidder using the following formula:
    Exchange Rate Adjustment = FCC x Qty x (i₁ - i₀ ) / i₀
    where formula variables correspond to:

    FCC: Foreign Currency Component (per unit)

    Qty: quantity of units

    i₀: initial exchange rate (CAN$ per unit of foreign currency [for example US$1])

    i₁: exchange rate for adjustment (CAN$ per unit of foreign currency [for example US$1])

    This calculation may be done for each line item and the sum of adjustments shown as a single line item on the invoice.

12. Example: In a solicitation for 100 "regular chairs," the successful bidder bid CAN$200 per chair and specified an FCC for each chair of CAN$100 (50%) representing the initial value of materials from the US$, including all applicable customs, taxes and exchange rate costs which are impacted by the exchange rate. The solicitation specified that the initial rate is based on the bid closing date and that the rate for adjustment is based on the delivery date. The bid closed on March 1, and on that day, the exchange rate was 1.0000 CAN$ per US$ dollar. On May 1, when the chairs were delivered, the exchange rate changed significantly to 1.1500 CAN$/US$.
    Calculation: Exchange Rate Adjustment = (FCC per unit) x Qty x (i₁ - i₀ ) / i₀
    = $100 x 100 x (1.1500 CAN$/US$ – 1.0000 CAN$/US$) / 1.0000 CAN$/US$
    = $1,500

    Figure 1: Sample invoice including exchange rate adjustment

    Description of unit	Qty	Unit price (CAN$)	Value (CAN$)
    Regular chair	100	$200	$20,000
    Exchange rate adjustment (on regular chairs, US$ exchange rate for March 1, 2013 to May 1, 2013)	100	$15	$1,500
    Subtotal:			$21,500

    
    Alternatively, had the new rate been 0.8900 CAN$/US$, then the exchange rate adjustment would be: $1,235.96 representing a reduction in the price paid by Canada.
    Note: Suppliers should submit a separate calculation sheet for each invoice submitted showing the exchange rate adjustment for all line items with an FCC.

13. The exchange rate adjustment will only be applied when the exchange rate fluctuation is greater than 2% (increase or decrease), i.e. abs[(i₁ – i₀) / i₀] > .02, where "abs" represents the absolute value.
14. The choice by a bidder to mitigate their risk against the exchange rate fluctuation will not have an impact on the evaluated price. The exchange rate adjustment is applied at the time of payment.
15. The client payment office is responsible for ensuring that the adjustment is in accordance with the contract provisions.
16. Contracting officers must ensure that the initial exchange rate, the FCC for each item, and the associated foreign currency for each FCC is clearly indicated with the prices in the contract to facilitate the payment process.
17. Contracting officers must also ensure that the basis of payment clause specifies:
    "The price paid will be adjusted in accordance with the exchange rate fluctuation provision (as applicable)."
    Note: The words "as applicable" are used, since it is the bidder's choice to include an exchange rate fluctuation provision and the exchange rate fluctuation must be greater than 2% (increase or decrease).
18. Invoicing: The supplier must indicate the exchange rate adjustment amount (either upward, downward or present no change) as a separate item on each invoice or claim for payment submitted under the contract. This must be shown even when there is no adjustment claim due to the change in the rate being below the threshold.
19. The total estimated cost of the contract must be amended upward, where needed, to address changes due to the exchange rate fluctuation. The final contract amendment should amend the contract price upward or downward, as needed, to reflect the actual price paid.

4.70 Conditions of the resulting contract

Effective date: 2010-01-11

4.70.5 General conditions

Effective date: 2010-01-11

1. Standard Acquisition Clauses and Conditions (SACC) Manual general conditions describe the rights and obligations of both the government and the contractors in various types of contractual situations. Contracting officers must determine which general conditions apply to a specific requirement. Only one set of general conditions is to be used for a requirement. Additional conditions, not addressed in the chosen general conditions, may be added to the procurement document; however, contracting officers must ensure that there are no contradictions, inconsistencies and redundancies in the clauses contained in the template, the standard instructions and the general conditions. Legal Services should be consulted for any additional conditions.
2. The general conditions are incorporated by reference in the procurement document. The remarks contained in the general conditions provide instructions on their application.
3. For more information on the general conditions and their use, consult Annex 4.1: General conditions and supplemental general conditions.

4.70.5.1 Warranty

Effective date: 2010-01-11

1. In a contract for the sale of goods, any affirmation of fact or any promise by the supplier relating to the goods is an express warranty. The warranty provisions in the general conditions do not negate or limit in any way the operation of other relevant warranties that are, as a general rule, implied or imposed by law.
2. Examples of relevant warranties that are implied by law are:
   1. the fitness of the goods for the purpose intended; or
   2. the merchantable quality of the goods.
3. These warranties are implied in most contracts for the sale of goods through the International Sale of Goods Contracts Convention Act, a version of which exists in all Canadian provinces and territories except Quebec. In Quebec, the warranty under the Civil Code is a warranty of ownership and of quality, which includes latent defects.
4. The contracting officer may negotiate an increase to the warranty time period in a contract, subject to client department agreement to the proposed time period and related cost. This change in warranty time period should be addressed in the contract approval document.
5. Any requests for lessening Canada's full rights at law, a disclaimer, limitation of the contractor's liability, or decrease of the warranty time period, must be reviewed by Legal Services, be acceptable to the client department, and form part of the contract approval document.
6. It may be necessary to consider obtaining a broader warranty than that contemplated by the warranty provision appearing in the SACC Manual general conditions to cover "symptomatic defects" or "epidemic failures."
7. These are cases where the same or similar defects have developed in several identical items of finished work, or components, and it is reasonable to assume that the same defects will be found in the total quantity of such items, which have already been delivered, or will be delivered.
8. Where this type of warranty is requested by the client department, or considered desirable by PWGSC, the contracting officer, in consultation with the client department, must determine the extent and nature of the warranty required, and request Legal Services to prepare a suitable provision to cover the requirement. In the case of negotiated firm price contracts, the contracting officer must obtain the client department's agreement to the estimated cost of this warranty.
9. The general conditions provide that contractors must carry out warranty work at their own expense. The following interpretations apply:
   1. in the case of firm price contracts awarded as a result of a competitive solicitation, where the procurement process precludes any adjustment to the price quoted, costs incurred as a consequence of warranty consideration must be the responsibility of the contractor;
   2. in the case of negotiated firm price contracts, where contingency for warranty work becomes a factor for consideration during the price negotiations, the amount included in the firm price must be kept to reasonable levels, and must be specifically approved. Supporting details must be part of the cost summary presented in the contract approval document;
   3. in the case of negotiated firm price contracts governed by the Defence Production Act, the contractor must certify that the price is based on costs computed in accordance with Contract Cost Principles 1031-2, which do not permit any increase in reserves for guaranteed work. Therefore, costs for work and/or expenses in order to provide for product correction/adjustment/replacement under warranty requirements, are not to be included in the contract price since provision for these expenses has already been included in the certified price;
   4. in cost reimbursable contracts, the contractor is not allowed to charge any contingency for warranty as an element of cost. If the contractor is required to make good under the warranty provisions, the contracting officer may allow recovery of the reasonable cost incurred for direct labour and direct material only. There is to be no allowance for overhead or profit;
   5. if the contracting officer is of the opinion that reasonable warranty costs may be allowed, then an appropriate clause approved by Legal Services must be inserted in the contract to authorize such costs. The contract should contain a line item providing for the allowance of costs, with or without a maximum estimated expenditure.

4.70.10 Supplemental general conditions

Effective date: 2010-01-11

1. Contracting officers must determine which SACC Manual supplemental general conditions apply to a specific requirement. The supplemental general conditions must be used in conjunction with one set of SACC Manual general conditions. Their purpose is to expand upon and clarify specific points within the context of an identified subject area.
2. The supplemental general conditions are incorporated by reference in the procurement document. The remarks contained in each set of the supplemental general conditions provide instructions on their application.
3. For more information on the use of supplemental general conditions, consult Annex 4.1: General conditions and supplemental general conditions and the SACC Manual.

4.70.15 Term of the contract and options

Effective date: 2010-01-11

The period of the contract or the delivery date must be indicated, as applicable. SACC Manual clause A9022C may be used in contracts for services. If the contract contains option periods, use in conjunction with A9009C.

4.70.20 Basis of payment

Effective date: 2023-04-14

1. The Practitioner’s Guide for Procurement Pricing, Section 4.1 Basis of Payment, provides further guidance on the selection and use of different basis of payment for contracts.
2. The following are the four primary basis of payment types:
   1. fixed price, including options for: fixed price competitive, fixed price non-competitive, and fixed price subject to economic price adjustment;
   2. fixed time/unit rate, including options for fixed time/unit rate subject to economic price adjustment;
   3. cost reimbursable, including options for: no fee, fixed fee, target cost/incentive fee, and with fee based on actual costs;
   4. provisional price.
3. The determination of basis of payment should reflect consideration of the clarity of scope and requirements; market forces; contract duration; price validation; contractor readiness; and the applicability of incentives. Multiple bases of payment may be used in one contract.
4. A contract or part of a contract with a fixed time/unit rate or a cost reimbursable basis of payment must include either a ceiling price or a limitation of expenditure.
5. Where a contract price will be based on estimated or actual costs, the contracting authority, in consultation with the Procurement Support Services Sector, may require an accepted Cost Accounting Practices (CAP) Submission evidenced by a CAP Submission Acceptance Letter to clarify the cost accounting practices to be used for contract pricing. See the Practitioner’s Guide for Procurement Pricing, section 5.1.2 Cost Accounting Practices Submission.

4.70.20.1 Firm price

Effective date: 2023-04-14

1. The firm price basis of payment is no longer recommended for use for the following reasons:
   1. Firm price removes all incentive for the contractor to improve the processes and to gain efficiencies because Canada has the right to audit and recover any resulting overpayment.
   2. The discretionary audit clause may not be applied consistently and when it is applied, the audit and resulting recovery appears punitive in nature.
   3. Firm price does not help build or maintain contractor relationships due to disputes over excess profit recoveries and audit findings as well as the inconsistent application of the clause.
   4. Contractors are awarded a premium for Firm Price at the beginning of a contract. Then, throughout the contract, if the scope and requirements are modified, the nature of the contract resembles that of a cost reimbursable contract with Canada bearing the risks related to cost uncertainties and the contractor earning a higher than necessary profit premium.
2. The Practitioner’s Guide for Procurement Pricing, section 6.0 Annexes, Annex 1: Firm Price Basis of Payment, provides further clarification regarding fixed versus firm pricing as well as further guidance on the decision process and procedures for use of the fixed price basis of payment. The Procurement Support Services Sector may also be contacted for further guidance.
3. Historically, firm price provided a price, which was not subject to adjustment for performance of the contract or part of it. It gave maximum profit incentive to the contractor for cost control in that the contractor assumed full responsibility for all costs under or over the firm price. In addition, it placed a minimum administrative burden on both contracting parties. See SACC Manual clause C0207C.
4. This basis of payment was used to buy commercially available goods or readily quantifiable services when:
   1. the contractor had previously manufactured the particular good or provided the particular service, or similar goods or services, and had sufficient experience to permit a realistic statement of work based on firm specifications;
   2. the statement of work could have a cost applied to it in terms of quantities of material and labour time required; and
   3. a realistic estimate of the material prices and labour and overhead rates applicable during the contract period could be made.
5. Subsequent to the negotiation of a firm price basis of payment for a non-competitive requirement, the contractor must resubmit the price bid based on the agreement reached.
6. A discretionary audit clause may be included in the contract, as appropriate, subject to the receipt of a price certification in accordance with SACC Manual clauses C0002T or C0004T or C0006T.

4.70.20.2 Fixed price

Effective date: 2023-04-14

1. The Practitioner’s Guide for Procurement Pricing, Section 4.1.1 Fixed Price, provides further guidance on the decision process, procedures, and examples for use of this basis of payment type.
2. Fixed price provides price certainty throughout the life of a contract. In a fixed price contract, the contractor is paid a definite sum of money for carrying out the work regardless of the costs incurred. It gives maximum profit incentive to the contractor for cost control in that the contractor assumes full responsibility for all costs under or over the fixed price. In addition, it places a minimum administrative burden on both contracting parties. See SACC Manual clause C8000C.
3. Options for this basis of payment are:
   1. fixed price competitive: price is established by market competition with more than one compliant bidder. A competitive fixed price is the optimal basis of payment for achieving value because it is based on business profit motives. With multiple compliant bidders, the contracting officer is generally afforded a high degree of comfort that the price being fixed is fair market value;
   2. fixed price non-competitive: price is negotiated at the outset of the contract or in an amendment to the contract; and
   3. fixed price subject to economic price adjustment: price includes the ability to adjust for significant fluctuations of price outside of Canada and the contractor’s control (see Section 4.2 Economic Price Adjustments and Foreign Currency Adjustments of the Practitioner’s Guide for Procurement Pricing).
4. Use this basis of payment when:
   1. The contracting officer has a significant level of assurance that the price being fixed is fair and will not result in unreasonable profits being paid by Canada. This assurance can be obtained through:
      1. a competitive procurement with multiple compliant bidders, which allows the market to set the price.
      2. sufficient benchmarking and should-cost information to validate the price.
      3. available historical data on costing that is robust enough to be able to validate the price prior to fixing it. With a follow on contract, for example, assurance services can be performed on the costs and profit of the previous contract to establish a fixed price in the follow on contract.
   2. the requirements, scope of work and outputs to determine the level of effort are known, clearly defined and are unlikely to change. (e.g., where the relevant technology, industry, platform, or service is mature or proven).
   3. the contract duration is short to medium-term to ensure that:
      1. the price would not need to include additional profit premiums to account for long-term requirements and cost uncertainties.
      2. the contracting officer has a reasonable level of assurance that the price will still be reasonable and of value to Canada in the later years of the contract given the potential for technology changes and process improvements.
   4. the schedule is relatively certain and considered achievable.
   5. it is appropriate for the contractor to bear the risk of cost uncertainty.
5. A fixed price basis of payment may not be appropriate for high risk procurements involving contracts with highly uncertain or variable scopes. For example: cutting edge, untested or developmental technology.
6. There is no discretionary audit clause in a fixed price contract, which means that once a contract is signed, the contracting officer no longer has the ability to validate the costs and profit being earned on a contract during the contract or at contract completion for the purposes of excess profit recovery.
7. Ensure as part of the validation strategy, that Canada retains it’s right to audit for information purposes related to potential future negotiations on interim or follow-on contracts. This should include the right to audit the underlying costs, including the cost of production, to produce the necessary level of price support needed to determine if the fixed price is fair and reasonable. General audit clauses/conditions are a part of the general conditions template for low, medium and high complexity procurements.

4.70.20.5 Economic price adjustments and foreign currency adjustments

Effective date: 2023-04-14

1. The Practitioner’s Guide for Procurement Pricing, section 4.2 Economic Price Adjustments (EPAs) and Foreign Currency Adjustments (FCAs), provides further guidance on criteria for when to use, factors to consider, process steps, and examples for their use.
2. Economic price adjustments and foreign currency adjustments are tools to mitigate specific pricing risks resulting from changing market conditions, where one or more elements of the cost of a good or service may be subject to significant price fluctuations (i.e. increase and decrease) that are outside of Canada and the contractor’s control, for example, commodity prices, foreign exchange, and labour rate in collective bargaining negotiations.
3. EPAs and FCAs are used when it is not possible for Canada and the contractor to make a realistic estimate of future material, labour or overhead costs, and the potential variations in these costs could be significant. It is also used in fixed price or fixed time/unit rate basis of payment in both competitive and non-competitive situations. Adjustments to fixed prices or fixed time/unit prices in a contract will be allowed only if provided for in the contract. Refer to various clauses for EPAs and FCAs in subsection 5-C of the SACC Manual.
4. Economic price adjustments should not normally be included in contracts with delivery schedules of less than 12 months, or contracts valued under $100,000.
5. When a competitive bidding process is used, the proposed economic price adjustment provisions must be considered in the evaluation of the bid. In all other situations, economic price adjustment provisions must be agreed upon during negotiation of the initial or base year contract price.
6. When a provision for future wage or price adjustments, on one or more elements of the cost of a good or service, is necessary to protect the contractor and the government against significant economic fluctuations, economic price adjustment provisions may be used in fixed or firm price type contracts and in contracts that contain fixed or firm price elements within the basis of payment.
7. There are other alternatives that may be considered in place of using, or in addition to using EPAs and FCAs. See Factors to Consider in section 4.2 of the Practitioner’s Guide for Procurement Pricing.

4.70.20.10 Fixed time/unit rate

Effective date: 2023-04-14

1. The Practitioner’s Guide for Procurement Pricing, section 4.1.2 Fixed Time/Unit Rate, provides further guidance on the decision process, procedures and examples for use of this basis of payment type. See SACC Manual clause C8001C.
2. This basis of payment provides for the payment to the contractor for the actual hours worked or other units procured in performance of the work. For example, time/units can represent labour hours or machine hours. The actual amount of time/units spent in performance of the work may be subject to government audit. The amount paid for these hours or other units is calculated based on a predetermined fixed rate. A predetermined fixed rate is typically composed of estimated direct costs, indirect costs (overhead charges) and profit.
3. Use this basis of payment when:
   1. it is not possible to estimate in advance the level of effort and/or quantities required to perform the contract, but it is possible to determine within reasonable limits the applicable direct and indirect costs for each hour worked or other unit procured during the contract period; and
   2. there is provision for adequate controls to ensure that the contractor is not using inefficient or wasteful methods.
4. For non-competitive contracts, the fixed rate is determined by negotiation between the contractor and the contracting authority with support available from Procurement Support Service Sector’s price advisors. Price and technical validation prior to contract award is necessary to ensure that cost estimates are reasonable and that the contractor’s financial systems, which supports the estimates, are sufficient and reliable.

   
   SACC Manual clause C8001C Fixed time/unit rate basis of payment incorporates wording to include either a ceiling price or limitation of expenditure. Other SACC Manual time/unit rate basis of payments must be used with a ceiling price (SACC Manual clause C1206C and C6000C), or without a ceiling price (in which a limitation of expenditure clause, SACC Manual clause C6001C, must be used). Refer to Section 4.3 Ceiling Price and Limitation of Expenditure and Section 4.1.2 Fixed Time/Unit Rate of the Practitioner’s Guide for Procurement Pricing:

   1. For a contract or part of a contract with a time/unit rate basis of payment, which includes a ceiling price, the contractor must complete the prescribed work without additional payment, whether or not the actual costs exceed the ceiling price. When a ceiling price is used, there must be full agreement between the parties as to what constitutes the prescribed work.
   2. When a contract or part of a contract with a time/unit rate basis of payment does not include a ceiling price, a limitation of expenditure must be included in the contract. A limitation of expenditure is the maximum amount the contractor may be paid for the prescribed work. The limitation of expenditure is normally used when the level of effort cannot be accurately estimated at the outset. At the client’s request, the contracting authority will amend the contract to provide additional funds, or request the contractor to complete the work to the extent that the original funding permits.
5. Audits or time verifications and rate certifications must be provided for in contracts.

4.70.20.11 Cost reimbursable

Effective date: 2023-04-14

1. The Practitioner’s Guide for Procurement Pricing, Section 4.1.3 Cost Reimbursable, provides further guidance on the decision process, procedures and examples for use of this basis of payment type.
2. A cost reimbursable basis of payment provides for the reimbursement to the contractor of allowable costs incurred in performance of the work in the contract. Please refer to SACC Manual Contract Cost Principles 1031-2.
3. Cost reimbursable pricing is primarily used when there is uncertainty as to the scope and requirements of the work. Cost reimbursable pricing is generally used in negotiated contracts. It may not provide much encouragement for a contractor to limit costs unless paired with a cost control incentive, such as a cost reimbursable with target cost basis of payment, as described in the Practitioner’s Guide for Procurement Pricing, Section 4.1.3 Cost Reimbursable.
4. Cost reimbursable pricing is most appropriate in the following types of situations where scope of the contract is uncertain:
   1. research and development;
   2. major system development;
   3. prototype development and testing;
   4. low rate initial production;
   5. immature industry, platform, or service;
   6. minimal competition; and/or
   7. immature product, poorly defined concept/understanding of requirements.
5. Cost reimbursable contracts should only be used when:
   1. a contractor’s accounting system is adequate for determining costs applicable to the contract;
   2. adequate government resources are in place to manage a cost reimbursable contract, which includes resources to review and validate costs claimed;
   3. appropriate validation mechanisms exist during the contract performance and after contract completion to provide reasonable assurance that efficient methods and effective cost controls are used; and
   4. it is not possible to reasonably estimate a price for the work that can be agreed upon by both parties that would result in more equitable sharing of risks and responsibilities between Canada and the contractor.
6. Cost reimbursable basis of payment should not be used if a commercial price is available.
7. All Cost Reimbursable contracts require audit clauses to allow for periodic validation of costs. Refer to the Supply Manual Section 4.70.20.35 Cost reimbursable contracts: Audit for details.
8. Please refer to SACC Manual Contract Cost Principles 1031-2 and Annex 2 Costing Standard of the Practitioner’s Guide for Procurement Pricing for a description of allowable costs.

4.70.20.15 Cost reimbursable with target cost/incentive fee

Effective date: 2023-04-14

1. The Practitioner’s Guide for Procurement Pricing, section 4.1.3.3 Cost Reimbursable with Target Cost/ Incentive Fee, provides further guidance on the decision process, procedures, and examples for use of this basis of payment type. See SACC Manual clauses C8002C, C8003C, C8004C and C8005C.
2. This basis of payment is a form of gain or pain sharing, where cost efficiencies or losses are rewarded and shared through fee arrangements in which both the contractor and Canada share the reward (risk) of meeting (or not meeting) contract performance criteria. In effect, the gain or pain sharing formula in this basis of payment encourages the contractor to control their costs. Setting targets and percentages for gain/pain sharing formulas should involve determining the likelihood of variations from the established target. Actual experience may indicate that the contractor’s underlying business solution or Canada’s requirements have changed to the point where the sharing agreement and the contract should be amended.
3. Use this basis of payment when the criteria required for a fixed or firm price basis of payment are lacking and the goods and services being acquired are of a nature that the assumption by the contractor of a degree of cost responsibility is likely to provide a positive incentive for effective cost control and contract performance.
4. There are two primary target cost/incentive fee basis of payment types. For additional comparisons, see examples and procedures in the Practitioner’s Guide for Procurement Pricing, 4.1.3.3 Cost Reimbursable with Target Cost/ Incentive Fee:
   1. With no maximum price: Canada and the contractor share in cost savings or costs exceeding the target in the performance of the contract and there are no limits to the losses or gains incurred.
   2. With maximum price: Canada and the contractor share in cost savings or costs exceeding the target in the performance of the contract up to the point of the maximum price.
5. When a cost reimbursable with a target cost/incentive fee basis of payment is used, it may be necessary to negotiate in advance a target cost, a target fee, a maximum fee and a formula for fee adjustment depending on the type of target cost/incentive fee basis of payment.
6. The target should be the estimated costs of performing the work, computed in accordance with Contract Cost Principles 1031-2 and Annex 2 - Costing Standard of the Practitioner’s Guide for Procurement Pricing.
7. The target fee and the maximum fee should be an amount no greater than that calculated in accordance with the procedures for profit determination as seen in section 5.2 Profit Principles of the Practitioner’s Guide for Procurement Pricing.
8. The sharing formula provides for:
   1. an increase in fee above the target, up to the maximum fee, for actual acceptable costs below the target; and
   2. a reduction of the fee below the target, for actual acceptable costs above target.
9. In a contract, or part of a contract, with a cost reimbursable target cost/incentive fee basis of payment, with no maximum price, SACC Manual clause C6001C - Limitation of expenditure must be included in the contract.
10. A contract, or part of a contract, with a cost reimbursable target cost/incentive fee basis of payment with maximum price must use a ceiling price clause (SACC Manual clause C6000C).

4.70.20.20 Cost reimbursable with a fixed fee

Effective date: 2023-04-14

1. The Practitioner’s Guide for Procurement Pricing, section 4.1.3.2 Cost Reimbursable with a Fixed Fee, provides further guidance on the decision process and procedures for use of this basis of payment type.
2. This cost reimbursable basis of payment option provides for the payment to the contractor for the actual amount of costs incurred in performance of the work. The actual amount of costs incurred in performance of the work may be subject to government audit. While the fixed fee does not vary with actual costs incurred, it may be renegotiated under certain circumstances. Refer to SACC Manual clause C0202C.
3. Use this basis of payment when circumstances do not permit the use of a fixed price and where the possible savings from the use of a cost reimbursable with target cost/incentive fee contract are likely to be offset by the complexities of contract administration resulting from its use. It is primarily used in research and advanced development or in projects where the required level of effort is unknown.
4. The amount of the fixed fee, based on an estimate of the costs to be incurred, should be no greater than the appropriate amount of profit. See Practitioner’s Guide for Procurement Pricing Section 5.2 Profit Principles for guidance on the determination of profit. If it is not possible for both parties to reach agreement on an estimate of the costs to be incurred, as a basis for calculating the fixed fee, swing points are used. Swing points are the amounts of estimated costs, one higher and one lower than the amount used for the calculation of the fixed fee, at which the fixed fee will be renegotiated.
5. In a contract or part of a contract with this basis of payment, which include a ceiling price, the contractor must complete the prescribed work without additional payment, whether or not actual costs exceed the ceiling price. When a ceiling price is used, there must be full agreement between the parties as to what constitutes the prescribed work. SACC Manual clause C6000C must be used in a ceiling price contract where it is necessary to ensure against the contractor making changes or carrying out additional work without the prior approval of the contracting officer. If it is possible to determine the prescribed work and for the parties to agree on an estimated amount to complete it as a basis for the ceiling price, it may be appropriate to use another basis of payment, that is, one which provides for a more equitable sharing of responsibilities and risks between the contractor and Canada.
6. In a contract or part of a contract with this basis of payment, which does not include a ceiling price, SACC Manual clause C6001C - Limitation of expenditure must be included in the contract.

4.70.20.25 Cost reimbursable with fee based on actual costs

Effective date: 2023-04-14

1. This basis of payment is not recommended because it provides little or no control over contract costs and actually encourages contractors to increase costs as a way to increase profit. The Practitioner’s Guide for Procurement Pricing, section 4.1.3.4 Cost Reimbursable with Fee Based on Actual Costs, provides further guidance on the decision process and procedures for use of this basis of payment type.
2. This basis of payment provides only for the payment to the contractor of actual costs incurred in performance of the work plus a fixed percentage of those actual costs as fee. The actual costs incurred in performance of the work may be subject to government audit. The amount paid is calculated based on actual costs incurred. Refer to SACC Manual clause C0205C.
3. Use this basis of payment only when circumstances do not allow for the use of any other basis of payment.
4. The amount of fee is based on the actual costs incurred, as determined by Contract Cost Principles 1031-2 and/or the Costing Standard in Annex 2 of the Practitioner’s Guide for Procurement Pricing. This fee could be subject to government audit, and should be no greater than the appropriate level of profit. Please refer to the Practitioner’s Guide for Procurement Pricing section 5.2 Profit Principles for guidance on the determination of profit.
5. Ceiling prices are not applicable when this basis of payment is used.
6. Since the fee is based on actual costs incurred, it is important to validate the costs claimed by the contractor upon completion of the contract or periodically, for example annually in the case of multi-year contracts.
7. In a contract or part of a contract with this basis of payment, SACC Manual clause C6001C - Limitation of expenditure must be included in the contract.

4.70.20.30 Cost reimbursable with no fee

Effective date: 2023-04-14

1. The Practitioner’s Guide for Procurement Pricing, section 4.1.3.1 Cost Reimbursable With No Fee, provides further guidance on the decision process and procedures for use of this basis of payment type.
2. This basis of payment provides only for the reimbursement to the contractor of actual costs incurred, as may be determined by government audit. Refer to SACC Manual clause C0201C.
3. Except for contracts covering the provision of assistance to a contractor, this basis of payment is rarely used entirely on its own. Contractors cannot normally be expected to accept a contract, which provides for no profit for the manufacture of goods or the provision of services.
4. A contract, or part of a contract, with this basis of payment should not include a ceiling price as it conflicts with the reason why this basis of payment is being used.
5. Since the price is based on actual costs incurred, it is important to validate the costs claimed by the contractor upon completion of the contract or periodically, for example annually in the case of multi-year contracts.
6. In a contract or part of a contract with this basis of payment, which does not include a ceiling price, SACC Manual clause C6001C - Limitation of expenditure must be included in the contract.

4.70.20.31 Provisional price

Effective date: 2023-04-14

1. The Practitioner’s Guide for Procurement Pricing, Section 4.1.4 Provisional Price Basis of Payment, provides further guidance on the decision process, procedures, and examples for use of this basis of payment type.
2. In a provisional price basis of payment, a contract begins with a cost reimbursable basis of payment when the requirements and costs within the contract are uncertain or cannot be estimated, with a clearly defined price ceiling or limitation of expenditure.
3. This basis of payment is used when there is a plan to move from a cost reimbursable basis of payment to a fixed price basis of payment because there will be an increased certainty in terms of the contract requirements over time, which therefore decreases the risks to Canada for the remainder of the contract. Provisional pricing gives contracting officers the ability to reduce the risks to Canada when they are able to better analyze and evaluate appropriate, attributable and reasonable cost.
4. Provisional price requires a milestone to be established that is relevant to the level of uncertainty for the requirement. This milestone is typically tied to a certain percentage of work completed or achievement of critical performance indicators within the contract when the costs are more certain and stable. This would predefine when the cost reimbursable portion is complete and the basis of payment can move to fixed price. This must be clearly detailed in the contract.
5. The price validation is triggered when the contractor submits a declaration of the percentage of work completed that corresponds to the milestone. This declaration must include a cost submission prepared by the contractor (please refer to SACC Manual clause C0300C). Costs must be validated before the basis of payment is formally changed to a fixed price.
6. Contractors must cooperate in a timely manner with auditors and provide all necessary supporting evidence such as financial information, as and when required by auditors. The submission of all costs incurred must be sufficient to disclose unit cost and cost trends for the goods and/or services performed in relation to the contract and inventories of both work in progress and undelivered contract supplies on-hand. Benchmarking by market data or historical data on costs and profit calculation is also included in the price validation process. The use of expertise within Procurement Support Services Sector to validate the price is highly recommended.
7. When the milestone is attained and the costs become more certain and stable, Canada and the contractor will negotiate a fixed price for the remainder of the contract based on the terms and conditions outlined in the initial contract.
8. Typically, provisional pricing is used in longer-term contracts, such as five (5) years or longer, where it is not possible to fix the price due to uncertainty, or where there is an inability to set reasonable estimates or targets on contract requirements and costs.
9. Provisional pricing enables contracting officers to work towards the benefits of a fixed price, such as cost efficiencies, transfer of risk to the contractor, and reduction of the administrative burden that existed during the period where the contract had a cost reimbursable basis of payment. A cost-benefit analysis could help to reveal the potential value in using provisional pricing.

4.70.20.35 Cost reimbursable contracts: Audit

Effective date: 2022-12-01

1. Cost reimbursable contracts or contracts with cost reimbursable elements require special attention because the price is not specified in the contract, but rather is determined after completion of the work. All cost reimbursable contracts must include SACC Manual clause C1004C indicating that Canada reserves the right to recover amounts and make adjustments to amounts payable to the contractor where an examination of the contractor’s records has identified amounts allocated to the contract that are not in accordance with the contract terms.
2. For all cost reimbursable contracts valued at $50,000 or more awarded to Canadian suppliers, the contracting officer must, on completion of the work, place on file a certification that the final amount paid represents a reasonable price.
3. This certification may be based on the findings of a formal or an informal audit. This audit provides the basis for certification that the price is reasonable.
4. All contracts containing cost reimbursable elements must include an appropriate basis of payment clause (see clauses C0201C, C0202C, C0203C and C0205C.)
5. All cost reimbursable contracts must also include clause C0300C, which calls upon the contractor to provide a cost submission to the contracting officer upon completion of the contract or annually for multi-year contracts spanning more than one contractor fiscal year.
6. The requirement for a cost submission will be listed as a mandatory deliverable item within the contract. However, for repair and overhaul (R&O) service contracts, the contracting officer or audit agency may determine whether a cost submission is needed as a deliverable item. The clause C0307C pertaining to R&O service contracts must be used.

4.70.20.40 Cost and profit

Effective date: 2023-04-14

Whenever a contract is to be awarded on a non-competitive basis, or when, following a competitive process, price negotiations with the successful supplier are required, contracting officers must consult Chapter - 10 Cost and profit and the Practitioner’s Guide for Procurement Pricing, section 5.0 Pricing Principles.

4.70.20.45 Withholding of 15 percent on service contracts with non-residents

Effective date: 2022-12-01

1. The Income Tax Act and the Income Tax Regulations require client departments, on whose behalf a contract for services rendered in Canada has been awarded by PWGSC to a non-resident contractor, to withhold 15 percent from the payment of fees, commissions or other amounts paid to non-resident individuals, partnerships or corporations, other than for services performed in the course of employment. Client departments are responsible for: withholding 15 percent of any amounts payable, in lieu of taxes; remittance of this amount to CRA; and reporting the amounts paid, and withheld, to CRA. The SACC Manual general conditions include a provision regarding the withholding of 15 percent from the payment. A waiver or a reduction of the withholding may be obtainable as detailed in paragraph (e) below.
   Withholding of the 15 percent of the payment does not represent a definite tax, but rather a payment on account of the non-resident contractor's overall tax liability to Canada.
2. Payments for duties of employment performed in Canada, made to non-resident individuals, are not subject to the 15 percent withholding, but are subject to tax deductions on a basis similar to that applicable to residents.
3. Withholding pursuant to subsection 105(1) of the Income Tax Regulations does not apply to travel expenses as detailed in the following:
   Reasonable travel expenses
   • 24. The CRA provides an administrative exception from withholding for reasonable travel expenses. Travel expenses reimbursed to the non-resident for meals to a maximum of CAN$45 a day per person and accommodation to a maximum of CAN$100 a day per person will not be subject to Regulation 105 withholding and will not require vouchers to be retained by the payer.
   • 25. Reasonable travel expenses, in excess of the above amounts, supported by vouchers retained by the payer and either paid directly to third parties on behalf of a non-resident, or reimbursed to a non-resident will also not be subject to Regulation 105 withholding.
   • 26. Such travel expenses are limited to those expenses incurred for transportation, accommodation, or meals. These amounts have to be reported on a T4A-NR information slip (see 41-42) as travel expenses, but are not to be included in gross income on this information slip. Canada Revenue Agency
     Income Tax Information Circular IC75-6R2
4. When a contract provides for services to be performed in more than one country, including Canada, an allocation of the contract price is required. Only the portion of the payment attributable to services performed in Canada will be subject to a withholding of 15 percent. (Client departments should consult sections 32-34 of Income Tax Information Circular IC75-6R2.)
5. Although most tax treaties between Canada and other countries provide for some relief from Canadian tax, Canada does not normally relinquish its right to withhold tax pursuant to the provisions of section 153 of the Income Tax Act and subsection 105(1) of the Income Tax Regulations. If the non-resident contractor can adequately demonstrate, based on treaty protection, that the withholding normally required is in excess of the ultimate tax liability, or that the withholding creates undue hardship to the contractor, then the CRA may issue permission to the payer authorizing a reduction of the subsection 105(1) withholdings. The procedure to apply for a reduction of withholding is detailed in Income Tax Information Circular IC75-6R2 Appendices A and B, as well as in CRA's T4061, Non resident Tax Withholding, Remitting, and Reporting. Requests for a waiver or a reduction of the withholding will not be entertained unless deductions at source are remitted to CRA.
6. If asked for information on the withholding, contracting officers may refer client departments and suppliers to CRA's Income Tax Information Circular IC75-6R2 or CRA's helpline.

4.70.20.50 Types of price adjustments

Effective date: 2017-11-28

1. The price adjustment formula must provide for both upward and downward revision of the firm base price, and include a ceiling price or limitation of expenditure. It must identify, if applicable, the economic wage or price index to be used, the firm price element, and the base period for which adjustments are to be made.
2. The calculation of any adjustment formula should remain consistent with the cost/price accounting treatment used to arrive at the firm base price. This will ensure accuracy in measuring the amount of variation from the firm base price.
3. The various economic price adjustment clauses are in subsection 5-C of the SACC Manual. The price adjustment method used should be the simplest, most suitable adjustment formula to provide the protection necessary to both parties with the least administrative effort. The requirements of materiality and practicality must be met.
   The advice of a cost analyst is appropriate in the development of any significant or major economic price adjustment provisions, or for the implementation of an economic price adjustment provision through the use of an accounting type formula, in accordance with the Guideline on the Use of Cost and Price Analysis Services (accessible only on the Government of Canada network)(PDF).
4. Adjustment provisions to prices for commercial goods and services should be based on increases or decreases from an agreed upon posted reference or firm base price. If the original contract or firm base price includes a discount factor, from the initial or then current established catalogue price, the same discount factor should be applied to the adjusted price, unless otherwise stated in the contract.
5. Statistics Canada publishes a variety of reports, providing changes in price indices, material and labour costs. The Department of Labour performs this function in the United States. Private sector surveys may also be used.
6. Adjustments to actual rates for labour or actual costs for material are based on the increases or decreases in firm base price elements experienced by the contractor.
7. The use of this adjustment method is limited to contingencies beyond the contractor's control, and where the contractor's accounting system permits timely compilation of all necessary cost data relative to the economic price adjustment during contract performance.
8. A company's union agreement with its employees may be considered an acceptable economic labour rate index for that company, provided that it reflects comparable labour rate movements within that industrial sector.

4.70.25 Contract performance incentives

Effective date: 2023-04-14

1. Contract performance means the fulfillment or accomplishment of the work that is required under the contract. For additional guidance on incentives, see the Practitioner’s Guide for Procurement Pricing, section 4.4 Incentives and the following Discussion Papers in section 6.0 Annexes, Annex 5.2 on performance management:
   • Annex 5.2.1 – Contract Incentives to Encourage and Reward Enhanced Value to Canada
   • Annex 5.2.2 – Measures to Manage Contractor Non-Compliance or Unacceptable Behavior
   • Annex 5.2.4 – Managing Long-Term Contractual Relationships.
2. An incentive is a tool used in contracting to maximize value to both the Government of Canada and the contractor by motivating and rewarding the achievement of Canada’s desired outcomes, when appropriate. Incentives can be both short-term to achieve specific goals or long-term to encourage the sustainment of behaviours.
3. Incentives can be used in both competitive and non competitive procurements:
   1. when it comes to competitive contracts, it is recommended that incentives be introduced in the solicitation, as part of the resulting contract clauses. If there are uncertainties in terms of the application of incentives, specific incentive parameters can be stated in the solicitation.
   2. with respect to non-competitive contracts, incentives can be introduced during negotiations of a contract price and applied anytime throughout the life of a contract.
4. Incentives may not be appropriate or effective for all contracts, particularly when:
   1. The contractor will achieve the target performance criteria without an incentive;
   2. The contractor will not be motivated by the incentives to achieve the target performance criteria; or
   3. There is minimal to no value to Canada for the contract to perform beyond the base standards established in the statement of requirements.
5. Incentives can be used with all basis of payment types to reward superior contract performance which exceeds the base standards established in the Statement of Requirement/Work and provides value to Canada.
6. The performance objectives or outcomes associated with the incentive should be balanced and aligned to the most important objectives of the procurement. Rewarding a contractor for simply meeting the contract requirement should be avoided.
7. Incentives should be challenging and add value to a procurement when achieved. It is important to avoid incentives that are easily achieved and don’t add value to the procurement, but also to note that when incentives are too challenging and difficult to achieve, a contractor may be discouraged to invest the effort and cost required to achieve the performance.
8. An assessment is needed to ensure the incentive(s) will, in fact, motivate a contractor to perform. This will vary by contractor based on many factors including but not limited to basis of ownership, size, diversification, and organizational culture.
9. Consideration should be given to whether or not the contractor has control over the achievement of the incentives and whether the performance objectives can be measured and verified, which includes ensuring that the contractor’s systems can adequately track the information required for measurement.
10. The benefits of the contract outcomes should exceed the combined cost of the incentives and cost of their administration to all parties.
11. The structure and administration of incentives should be as simple as possible. Simple, limited, high level objective measurements are preferred over complex multi-variable algorithms. This includes avoiding the use of too many incentives in a single contract. Too many incentives dilutes the focus and makes it more likely for the Government of Canada to pay for unintended outcomes. See the section on Multiple Incentives and Competing Objectives in section 4.4 Incentives of the Practitioner’s Guide for Procurement Pricing.
12. If there are unstable market conditions and the procurement includes the use of an Economic Price Adjustment (EPA) or Foreign Currency Adjustment (FCA), the EPA or FCA must be excluded from determining the incentives.
13. The involvement and active communication with all stakeholders including program, technical, acquisition, and price advisors in the incentive planning process is essential. In addition, modelling of the impact and value of incentive programs from both the Government of Canada and the Contractor perspectives is essential.
14. Incentives may modify contractor behaviour. In order to ensure the behaviour modification is planned and welcomed, it is imperative that the contract structure, including basis of payment, statement of work, and performance management plans, be developed considering the perspective of both the Government of Canada and the contractor. An incentive plan that is not informed by all parties and perspectives can result in unintended consequences on a procurement.
15. There are a number of incentive options available. The following is a list of incentives for which additional guidance has been provided in the Practitioner’s Guide for Procurement Pricing. This is not to be considered an exhaustive list of incentives, but rather a starting point from which to establish a base incentive:
    1. technical performance incentives;
    2. schedule performance incentives; and
    3. award fees.

4.70.25.5 Technical performance incentive

Effective date: 2023-04-14

1. The Practitioner’s Guide for Procurement Pricing, section 4.4.1 Technical Performance Incentives, provides further guidance on the decision process, procedures, and examples for use of this incentive type.
2. Technical performance incentives include the technical goals that have to be achieved in performing the contract and to bring value to Canada. These goals can be expressed in the form of technical criteria as well as specifications and requirements. Incorporating technical performance incentives in a contract aims to achieve and/or improve technical parameters related to the procurement that are of critical importance to Canada. Upon achievement of one or more specified levels of technical performance, the contractor is provided with the opportunity to earn additional profit.
3. Technical performance incentives can be used when performance excellence and improvements would add value or are of critical importance to the procurement and to Canada (e.g. quality and technical ingenuity). Predetermined, objective and measurable incentive targets applicable to technical performance need to be established to use this incentive.
4. Technical performance incentives begin by developing and defining performance criteria and parameters related to contract technical specifications. The benefit to Canada of improving the minimum requirement must be clear and definitive.
5. Three targets should be established:
   1. standard performance target;
   2. minimum acceptable performance level; and
   3. maximum performance level.
6. The formula to calculate the performance incentive can be based on variable payments or target incentive fees as shown in SACC Manual clause C8006C. The methodology for validating the contractor’s performance related to technical performance criteria needs to be established as well.

4.70.25.10 Schedule performance incentive

Effective date: 2023-04-14

1. The Practitioner’s Guide for Procurement Pricing, section 4.4.2 Schedule Performance Incentives, provides further guidance on the decision process, procedures, and examples for use of this incentive type.
2. Schedule performance incentives involve rewarding the achievement of incentivised delivery timeline goals set in the contract that are of critical value or provide additional value to Canada. The contractor is provided with the opportunity to earn additional profit upon achievement of one or more targeted delivery dates.
3. Schedule performance incentives can be used when it is of critical importance to Canada to receive a good or service in a timely manner. Predetermined, objective and measurable incentive targets applicable to delivery times need to be established to use this incentive.
4. Schedule performance incentives begin with the establishment of realistic delivery dates and clear criteria to be met. The delivery incentive can be based on successful delivery on a single target date or a target date range (where the earlier the completion of performance the greater the incentive up to a maximum amount). It is important to link schedule requirements to performance requirements and to ensure that it is clear that the delivery incentive is contingent on specifications of the contract being met.
5. The formula to calculate the delivery incentive can be based on variable payments or target incentive fees as shown in SACC Manual clause C8007C.

4.70.25.15 Award fees

Effective date: 2023-04-14

1. The Practitioner’s Guide for Procurement Pricing, section 4.4.3 Award Fees, provides further guidance on the decision process, procedures, and examples for use of this incentive type.
2. Award fee incentives are used to motivate contractors to perform in areas critical to a procurement’s success that are subject to judgment and qualitative measurement and evaluation. The award fee incentive is a pool of funds, up to a maximum of which the contractor can earn, in addition to any profit or base-fee, upon an evaluation of performance against pre-established criteria.
3. Award fees can be used as an incentive when there is something to be gained by motivating excellence in performance including quality, expediency, technical ingenuity and cost-effective management. The contract amount, performance period, and expected benefits should warrant the cost of the additional administrative and management effort of using award fees. This incentive is chosen over other types when evaluating performance that is subjective in nature and it is not feasible to determine objective incentive targets applicable to cost, schedule, or technical performance.
4. Award fees require a plan that details the structure of how a contractor’s performance will be evaluated and should be aligned with Canada’s strategy, goals, and objectives for the procurement. The plan must clearly communicate the key factors within an award fee incentive, which includes the award fee amount and evaluation details such as evaluation periods, teams, categories, criteria, ratings and process.
5. Development of the award fee amount must incorporate the following factors:
   1. value to Canada for exceptional performance;
   2. amount required to sufficiently motivate the contractor to achieve exceptional performance; and
   3. complexity of the work and the resources required for contract performance.
6. Award fees are earned by meeting predetermined evaluation criteria.
7. Award fees can be evaluated in a single evaluation period or throughout multiple evaluation periods. An evaluation team with the appropriate technical and procurement expertise should be established.
8. Performance categories and the associated evaluation criteria and ratings should be developed with point or score ranges assigned to each criterion. The overall score for each performance category is determined by the total points earned from each criterion within the category.
9. A clear evaluation process should be established and documented to define the evaluation periods, how evaluation information will be gathered, and how often information will be obtained for review. It is important to also establish a communication process for the evaluation process and results, including required response times. The evaluation process is outlined in SACC Manual clause C8008C.

4.70.30 Method of payment

Effective date: 2010-01-11

The method of payment is the way Canada will pay for work performed or goods delivered, such as all arrears (preferred), in advance, as a lot delivery or as each item are delivered. Different types of methods of payment are described below:

4.70.30.1 Standard payment period and interest on overdue account

Effective date: 2010-01-11

Canada pays for work performed or goods received under a contract in accordance with Canada's standard payment period of 30 days as provided in the general conditions. The general conditions also reflect Canada's policy to automatically pay interest to contractors when an account is overdue and Canada is responsible for the delay. When dealing with federally or provincially regulated public utility companies, the conditions for payment of interest must conform to those approved by the appropriate regulatory bodies. The provisions for payment of interest on overdue accounts set out in the general conditions must be strictly adhered to, except in special cases where the client department requisition specifies a payment period longer than 30 days; for example, when extensive product evaluation, inspection or testing requirements are involved. In such cases, the general conditions may be modified subject to consultation Legal Services.

4.70.30.5 Determination of the method of payment

Effective date: 2010-01-11

The most appropriate method of payment must be determined based on the particular procurement. Some of the factors for consideration are the following:

1. Risk exposure for Canada, if situations such as insolvency, work cancellation or work default occurs. Pertinent factors include:
   1. Can securing unconditional guarantees protect an advance payment or performance bonds from financial institutions or from associated or parent companies with good financial credentials?
   2. What is the likely marketability and resale value of work-in-process to which Canada acquires title by virtue of making progress payments? The disparity between the amount of progress payments and the resale value of inventory is a measure of the risk exposure for Canada.
2. Financing Cost Estimates: Since provision for progress payments or advance payments involves a real or imputed cost to Canada, this cost should be calculated for each of the available options. Apply the chartered bank prime lending rate, as advised periodically by the Director, Cost and Forensic Accounting Directorate, to the cumulative net financing (that is, cumulative cash payout by Canada minus cumulative value of deliveries under the contract), using reasonable assumptions regarding work progress and item deliveries.
3. The potential reduction in contract price resulting from the various methods of payment.
4. Since progress payments or advance payments reduce the need for borrowing by the contractor, or reduce the size of equity capital on which a return must be realized, lower prices should flow through to Canada. The price reduction will vary with the different methods of payment and their relative attractiveness to the contractor.
5. Financial circumstances that may affect the ability of the client department to finance the various options.

4.70.30.10 Types of method of payment

Effective date: 2010-01-11

1. There are a number of ways payment may be carried out. Payment for the work performed or goods delivered may be made as a single payment, multiple payments or progress payments.
   1. Single payment: When a single payment will be made upon completion of all work and deliveries, Standard Acquisition Clauses and Conditions (SACC) Manual clause H1000C may be used for contracts for goods and services (except construction and utility contracts).
   2. Multiple payments: When there are multiple deliveries and payments will be made on completion of each delivery, SACC Manual clause H1001C may be used in contracts for goods (except construction and utility contracts).
   3. Progress Payments and Advance Payments: In all cases, a payment cannot be made in the current fiscal year for a contract that will not start until the next fiscal year. The requirement that payment be made only for goods or services received in the same fiscal year may require modification of the method of payment for requirements whose period of delivery or service spans fiscal years. Specifically, it may be necessary to provide for multiple payments, at the appropriate point in the contract period.
2. Progress payments or advance payments may be considered only if all of the following conditions are met:
   1. adequate security for the payment is ensured;
   2. Canada receives value commensurate with the amount of the payment;
   3. the client department has adequate funds to provide the financing; and
   4. one of the following circumstances exists:
      1. There is economic advantage to Canada that clearly outweighs the financing cost associated with the progress payment or advance payment.
      2. The contractor could suffer hardship or provide financing only with difficulty or at rates considered to be uneconomical in relation to prevailing chartered bank prime lending rates.
      3. The value of the contract is considered to be beyond the assessed financial capabilities of the contractor.
      4. There is to be a long duration for contract performance; or there is an entrenched tradition or practice of receiving progress payments or advance payments from the purchaser in a particular industry or segment of industry. However, payments can only be made for goods or services received in the same fiscal year. Funds must be spent in the fiscal year for which they are appropriated and cannot be carried forward by means of advance payments.
      5. In the case of subscriptions or insurance premiums, which are often for a term of one full year and which may not start exactly on April 1, payments can be restricted to goods or services provided in no more than the current and next fiscal years. For instance, a publication subscription paid in February 2009 cannot cover a period beyond March 2010.
      6. In the case of multi-year contracts requiring continuing advances, contracting officers can negotiate the payment of a series of separate advances covering each fiscal year. Thus, a payment can be made for a maintenance contract, for the period of a contract, from February to March 2009, and then another payment covering the period from April 2009 to March 2010.
      7. In exceptional situations, such as armament purchases or extended warranty service, where up-front payments covering more than one fiscal year must be made to the supplier, contracting officers can determine if an advance payment is unavoidable and can be substantiated. This type of case should be extremely rare.
3. Special Considerations for Foreign Purchases:
   1. in the case of United States purchases, progress payments or other payments on account have an effect on the application of taxes, relating to the time and place of ownership being transferred to Canada. Legal Services should be consulted to ensure that appropriate terms in the contract protect against unnecessary taxes;
   2. for other foreign purchases, where progress payments or other payments on account are granted, a check should be made to determine if the application of sales, use, or some other form of tax is related to the time and place of ownership being transferred to Canada. If this is the case, Legal Services must be consulted.

4.70.30.15 Progress payments

Effective date: 2010-01-11

1. In the case of a progress payment, SACC Manual general conditions 2010A, 2029, 2030, 2035 and 2040 provide that ownership of the materials or work-in-process will be transferred to Canada upon making such payment.
2. When a progress payment is to be used; milestones, when possible, should be specified to relate payments to measurable progress on the contract. Technical or other contractual achievement yardsticks may be used as milestones. Milestone payment is a form of progress payment addressed under the policy related to progress payments. The value of each milestone should be negotiated before contract award. SACC Manual clause H3009C may be used in contracts when progress payment against milestone will be made in accordance with an established schedule of milestones using form PWGSC-TPSGC 1111 and the amount claimed is subject to holdback. When the amount claimed is not subject to holdback, clause H3010C may be used. Either clause may be used in conjunction with H3022C or H3024C and H4012C.
3. When progress payments against milestones are not possible because of the nature of the contract, progress payments may be made at set periods of time on a calendar basis (time payment method), or based upon the actual costs incurred for material purchases and the partial completion of work, as certified by company and government inspectors. When progress payments will be made based on cost incurred using progress claim form PWGSC-TPSGC 1111, clause H1003C may be used in conjunction with H3022C or H3024C, if applicable. The clause H1003C may also be used in conjunction with H4500C in all contracts for goods with a Canadian-based contractor when advance or progress payments will be made. When payment will be made on a monthly basis for work performed in contracts for services, clause H1008C may be used. In contracts for maintenance services invoiced monthly or bi-monthly or quarterly, the clause H3020C may be used. The clause H3018C may be used in standing offers for air charter services for the carriage of goods and people.
4. A combination of milestone and cost incurred progress payments is also possible for different phases of the contract. The combination method can be used, for example, to pay incurred costs in the early stages of a major procurement when it would be difficult to define milestones, with payments for later and more definable stages of the production process made against specified milestone achievements.
5. If milestone or cost incurred progress payments are not possible, the time payment method of making progress payments should be used with caution. The overriding requirement for use of this method is the existence of a project progress monitoring and control system, to provide the contracting officer with reliable indicators of the actual value of work accomplished when a payment is due. With the exception of rental and service contracts, the time payment method must be approved at the director level or above.

4.70.30.20 Advance payments

Effective date: 2010-01-11

1. TB guidelines specify that advance payments should be considered only in extraordinary circumstances.
   1. Contracts for services: Contracts for services valued over $25,000, some form of guarantee given by a financially strong third party should protect any advance payment. The guarantee usually takes the form of a surety bond from an associated or parent company or a financial institution, or an irrevocable Letter of Credit from a Canadian bank. It should provide for return to Canada of the unliquidated balance of the advance, plus interest, in the event of work cancellation or other contract termination for Canada's convenience. Other types of guarantees may be discussed with a cost analyst.
   2. A decision to not request guarantees requires a strong business case.
   3. Contracts for services valued to less than $25,000, security may be dispensed with where the contracting officer certifies that the contractor has been actively engaged in the particular industry and enjoys a good reputation in that industry, and that PWGSC has no record of significant financial or performance problems encountered in past dealings, if any, with the contractor.
2. Cash Discount Considerations: For all contracts, except those for advertising, payment may be made in advance of the due date when the contractor offers a cash discount for advance payment and the discount at least offsets the cost to Canada for early payment. Cash discounts for advance payment will not be considered in the evaluation of bids/offers.
3. Special Considerations for Foreign Purchases: In the case of purchases from the United States (U.S.) Government, through the Foreign Military Sales (FMS) program, advance payments are required in accordance with U.S. law before the start of delivery for any goods and services to a foreign-based contractor. In this case, Treasury Board has approved the standard conditions for FMS sales from the U.S. Government. Any change in the standard conditions will require a submission for Treasury Board approval.

4.70.30.25 Holdbacks

Effective date: 2010-01-11

1. For all contracts where progress payments are provided, holdbacks must be used to avoid overpayment and to act as an incentive for the contractor to complete the job. However, for contracts using milestone payments, a requirement for a holdback may be included at the discretion of the contracting officer.
2. The following limits on payments for contracts involving progress payments apply:
   1. Firm Price with milestone payments:
      Total Allowable Costs: up to 100 percent of negotiated milestones
      Purchased Accountable Advance Materials: Nil
      Goods and Services Tax/Harmonized Sales Tax: Nil
      Profit: Nil
   2. Firm Price with progress payment on basis of negotiated cost³:
      Total Allowable Costs: Up to 90 percent
      Purchased Accountable Advance Materials: 100 percent
      Goods and Services Tax/Harmonized Sales Tax: If payable
      Profit: Pro rata
   3. Cost Reimbursable:
      Total Allowable Costs: Up to 90 percent
      Purchased Accountable Advance Materials: 100 percent
      Goods and Services Tax/Harmonized Sales tax: If payable
      Profit: Pro rata
   4. Fixed Time Rate:
      Total Allowable Costs: Up to 90 percent
      Purchased Accountable Advance Materials: 100 percent
      Goods and Services Tax/Harmonized Sales Tax: If payable
      Profit: Pro rata
   5. Price to be negotiated:
      1. Last year's negotiated rates/prices serve as interim rates for the new year⁴:
         Total Allowable Costs: Up to 100 percent
         Purchased Accountable Advance Materials: 100 percent
         Goods and Services Tax/Harmonized Sales Tax: If payable
         Profit: Pro rata
      2. All Other Contracts³:
         Total Allowable Costs: Up to 75 percent
         Purchased Accountable Advance Materials: 100 percent
         Goods and Services Tax/Harmonized Sales Tax: If payable
         Profit: Pro rata
3. Exceptions to these payment ceilings may be considered:
   1. when recognized trade practices supporting such exceptions can be demonstrated;
   2. in the case of organizations that do not receive a profit or fee; or
   3. when alternative methods of financial protection are employed, for example, security deposits (government guaranteed bonds, bills of exchange, irrevocable standby letters of credit) or surety bonds.
4. The timing for making decisions relating to the method of payment to be used varies with the solicitation method employed:
   1. for an Invitation to Tender (ITT), the method of payment must be selected, before issuing, and included in the solicitation documents (see SACC Manual clause H1003C.) Financing costs will not constitute an evaluation factor;
   2. for competitive solicitations, the solicitation will clearly specify that any requirement on the part of the supplier for receipt of progress or advance payments will constitute an evaluation criterion (this may require SACC Manual clause H1003C). When evaluating bids/offers, the cost to Canada of providing the progress payments or advance payments will be taken into account, as will the risk of exposure from the method of payment, and the availability of funds.
5. This cost determination may be waived when all responsive suppliers have requested the identical method and pattern of payment (for example, progress payments on a cost-incurred basis with virtually identical payout schedules).

³The percentages shown apply to incurred costs (incurred hours for fixed time rate contracts).

⁴The percentages shown apply to the previous year's rates.

4.70.35 Audit

Effective date: 2022-12-01

1. The provision for audit is an integral part of the procurement planning process. SACC Manual General Conditions 2010A, 2010B, 2010C, 2015A, 2029, 2030, 2035 and 2040 include a general audit clause requiring the contractor to maintain complete and accurate records of the contracts costs and allowing the government to inspect and examine the records upon request.
2. There are a number of circumstances where additional, specific provisions for audit (or validation) must be included in a contract. For contracts where the price is based on estimated costs (e.g., negotiated fixed price contracts) or actual costs incurred after contract award (e.g., cost reimburseable contracts), there may be a need to mitigate price risk. Additional audit or validation provisions are necessary to verify contract price and adjust payment as required. Refer to SACC Manual clause C1004C.

4.70.35.1 Firm price contracts - Price certification and discretionary audit

Effective date: 2024-04-19

1. All non-competitive firm price contracts valued over $50,000 whether for the acquisition of commercial or non-commercial goods and services require the submission of a price certification by the contractor. All such contracts must also have a discretionary audit clause included in the contract.
2. This applies to all such contracts issued by PWGSC and those issued by Canadian Commercial Corporation (CCC) on behalf of the United States Department of Defense (DoD) and the National Aeronautics and Space Administration (NASA), except for contracts for which the price is based on tariffs fixed by public regulatory bodies and not subject to negotiation by PWGSC.

4.70.35.2 General audit clause

Effective date: 2022-12-01

1. The general audit clause is intended for use in all contracts issued by the Acquisition Program. The general audit clause is included in SACC Manual General Conditions 2010A, 2010B, 2010C, 2015A, 2029, 2030, 2035 and 2040; and the high, medium and low complexity standard procurement templates.

2. The general audit clause requires the Contractor to maintain complete and accurate records of the estimated and actual cost of the Work. This enables Canada to determine whether:

   1. the Work has been performed and the price charged for the Work are in accordance with the Contract terms; and
   2. best value has been achieved for Canada.

   These records must be made available upon request, for examination by Canada, or by persons designated to act on behalf of Canada.

3. SACC Manual clause C1004C should be included for contracts where:
   1. the final contract price is based on actual costs incurred after contract award; and
   2. there may be a need to mitigate price risk through validation of supporting records.
4. Use SACC Manual clause C1004C in conjunction with C0201C, C0202C, C0203C, C0205C, C0206C, C0207C, C0209C, C0211C, C0212C, C0213C, C0214C, C1200C, C1201C, C1203C, and C1206C.

4.70.35.5 Cost reimbursable contracts - Certification and audit

Effective date: 2012-07-16

1. In the case of cost reimbursable contracts, a price is not specified in the contract but will be ascertained after completion of the work. Therefore, in accordance with section 34 of the Financial Administration Act, it is necessary for the appropriate authority to certify that the price, based on actual costs incurred when these are known on completion of the work, is reasonable. The purpose of the reference, in all cost reimbursable contracts valued over $50,000, to the costs incurred being determined by government audit, is to provide a basis for such certification of the reasonableness of the price.
2. Contracts containing cost reimbursable elements must contain an appropriate audit clause. The cost reimbursable bases of payment are: cost reimbursable with fixed time rate; cost reimbursable with incentive fee; cost reimbursable with fixed fee; cost reimbursable with fee based on actual costs; and cost reimbursable with no fee.
3. Upon completion of a cost reimbursable contract, the contractor will be required to provide a cost submission to the contracting officer. The requirement for a cost submission must be listed as a mandatory deliverable item within the contract, except that it is discretionary in the case of repair and overhaul contracts. (See SACC Manual clause C0300C.)

4.70.35.10 Fixed time rate contracts - Time verification

Effective date: 2010-01-11

1. Time charged and the accuracy of the contractor's time recording system are subject to verification by Canada, before or after payment is made to the contractor under the terms of the contract, whether competitive or non-competitive and regardless of value. The extent of the verification carried out should, however, reflect the value of the contract. (See SACC Manual clause C0711C.)
2. This applies to all such contracts except those for provision of temporary help services and rental of equipment.
3. Upon completion of a fixed time rate contract, the contractor must provide a submission detailing the actual time incurred in performance of the contract. In addition, SACC Manual clause C0710C or C0711C must be used to provide for the verification of time charged and the contractor's time recording system.

4.70.35.15 Audit of contract with a foreign contractor

Effective date: 2017-10-24

When there is a requirement for an audit of a contract with a contractor, or that includes a subcontractor where a significant portion has been subcontracted, from a North Atlantic Treaty Organization (NATO) allied country, the contracting officer should consider using the services of the foreign contractor or subcontractor's country's government to conduct the audit. 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.

4.70.40 Discretionary audit clauses

Effective date: 2010-01-11

Contracting officers must include the following applicable discretionary audit SACC Manual clause in contracts, as follows:

• C0100C:

  for commercial goods and/or services when price certification clause C0002T, C0004T, or C0006T is used; or when rate certification clause C0600T is used;

•  

• C0101C:

  for non-commercial goods and/or services when price certification clause C0003T is used; or when rate certification clause C0601T is used.

4.70.45 Time verification clauses

Effective date: 2010-01-11

Contracting officers must include the following applicable time verification SACC Manual clause in contracts, as follows:

• C0710C:

  for fixed time rate contracts for services and material;

•  

• C0711C:

  for fixed time rate contracts for the verification of time charged and accuracy of recording. Do not use this clause when C0705C is used.

4.70.50 Invoicing instructions

Effective date: 2010-01-11

1. The SACC Manual general conditions provide conditions on invoice submission, and the procurement templates provide invoicing instructions.
2. SACC Manual clause H5001C must be used in contracts for goods or services when the contractor must submit invoices in accordance with all the information required under section "Invoice Submission" of the applicable general conditions, and invoices will be submitted once all the work identified in the invoice has been completed.
3. When progress payments or advance payments are proposed, the appropriate clause from the SACC Manual must be included in the contract. When progress claim form PWGSC-TPSGC 1111 is required to make progress or milestone payments and supporting documents must be submitted with the claim, clause H3022C may be used. Alternatively, clause H3024C may be used when no supporting document is required with the claim. In contracts for maintenance services invoiced monthly or bi-monthly or quarterly, clause H3020C may be used.

4.70.55 Payment instruments

Effective date: 2016-01-28

1. The Government of Canada (GC) can use various methods to settle the payment of a good or a service, which are referred to as "payment instruments." These instruments determine how the contractor will be paid.
2. Contractor invoices may be paid using the following payment instruments:
   1. Direct Deposit (for domestic and international payments);
   2. GC acquisition card (GC Visa and GC MasterCard for domestic and international payments);
   3. Electronic Data Interchange (for domestic payments);
   4. Wire Transfer (for international payments only);
   5. Large Value Transfer System (for domestic payments over $25M);
   6. Cheque (for domestic and international payments); and
   7. Petty cash (for domestic payments).
3. With the exception of cheque and petty cash, all of the above are electronic payment instruments. Electronic payment instruments are GC's preferred payment instruments.
4. In instances where the client department or agency wishes to make payment using electronic payment instruments, they may identify their preference in the bid solicitation and resulting contract document(s), allowing bidders or contractors to indicate their capacity to accept various forms of electronic payment. Refer to the SACC Manual clauses H3027T and H3027C.
5. For more information on the electronic payment instruments, please consult the Receiver General website.

4.70.55.5 Direct deposit

Effective date: 2016-01-28

1. Contractor invoices may be paid via direct deposit. Direct deposit is an electronic fund transfer and is the preferred payment instrument by the Government of Canada (GC). Contractors are strongly encouraged but not obligated to accept payment via direct deposit. The GC offers direct deposit in Canada as well as in a large number of foreign countries (for a list, please consult the Receiver General website).
2. While direct deposit does not carry the remittance information or "stub information," client departments and agencies can now send payment details via an email to contractors.
3. If contractors want to receive a payment through direct deposit, they must follow the appropriate enrolment steps with the client department or agency responsible for issuing payment. Normally, a void cheque is required to document the accurate banking information.

4.70.55.10 Payment by acquisition card

Effective date: 2017-06-21

1. Contractor invoices may be paid using Canada acquisition cards (credit cards), which includes Visa and MasterCard. However, contractors are not obligated to accept acquisition cards as a payment instrument.
2. The decision to use acquisition cards for payment of contractor invoices or for payment at point of sale is a cash management decision made by the client department or agency.
3. Acquisition cards can also be used for call-ups under certain established standing offers (SOs). Where it is anticipated that the client department or agency may use the acquisition card for procurement and/or payment at point of sale in an SO, consult the clauses contained in the Request for Standing Offers Template (RFSO) (accessible only on the Government of Canada network) and General Conditions 2005.

4.70.55.15 Electronic Data Interchange

Effective date: 2016-01-28

1. Electronic Data Interchange (EDI) payments are electronic payments used for domestic payments, that include structured remittance information or "stub information" concerning the payment (e.g., describing the purpose of the payment).
2. When the payment is made into the contractor’s account, additional remittance information is also provided to the contractor. The manner in which the contractor receives the information from its financial institution is determined between the contractor and its financial institution. It is the contractor’s obligation to ensure that its account is EDI-capable.

4.70.55.20 Wire transfer

Effective date: 2016-01-28

1. A wire transfer is an electronic transfer of funds that is often the most expedient method for transferring funds to a bank account in a foreign country. Unlike foreign direct deposit, it is possible to issue a wire transfer in a currency other than the local currency of the country where the bank account resides.
2. Due to high transaction costs to the Government of Canada, wires should be limited to large value, low volume, and time-sensitive foreign payments or to payments that need to be issued in a currency other than that of the country of destination.

4.70.55.25 Large Value Transfer System

Effective date: 2016-01-28

1. The Large Value Transfer System (LVTS) is an electronic wire transfer system, which is used to facilitate the transfer of irrevocable payments in Canadian dollars within Canada.
2. Although LVTS payments can be of any value, they should be used mainly for large value payments. All Government of Canada domestic payments greater than $25 million must be issued with LVTS.
3. Through LVTS, funds are transferred in real time between participating financial institutions on behalf of client departments and agencies, and the money is available to the contractor immediately.

4.70.60 Certifications

Effective date: 2024-02-16

When the supplier provides certifications in its bid/offer/arrangement, these certifications are subject to verification by Canada during the entire period of the contract/offer/arrangement. If the contractor/offeror/supplier does not comply with any certification or it is determined that any certification made by the contractor/offeror/supplier is untrue, whether knowingly or unknowingly, then Canada may terminate the contract for default, set aside the standing offer or the supply arrangement and remove the supplier from the list of qualified suppliers. Consult the standard procurement templates (MC, HC, RFSO and RFSA) for the certification clause.

4.70.65 Defence contract and defence supplies

Effective date: 2010-01-11

1. Any contract constituting a "defence supplies," as defined in the Defence Production Act (DPA), must contain Standard Acquisition Clauses and Conditions (SACC) Manual clause A9006C.
2. A contract awarded on behalf of the Department of National Defence (DND) is not necessarily a defence contract. For example, a contract for goods purchased for DND's day-to-day operations is not a defence contract. Furthermore, it is also possible for a defence contract to be awarded on behalf of a department other than DND. The client department, as the technical authority, will determine whether a particular requirement will result in a defence contract, as defined in the DPA.
3. Solicitations and contracts for defence supplies valued at $250,000 or more, which involve importation of defence supplies, and require the contractor to be the importer, must contain SACC Manual clause C2611C. This clause specifies that the contractor will be responsible for pre-arranging remission on importation or for paying customs duties on importation and applying to the Canada Border Services Agency (CRA) for a refund. Use SACC Manual clause C2610C when DND is the importer. DND is responsible for applying to Public Works and Government Services Canada in good time for the certification required by the Customs Tariff.
4. According to CRA, "defence supplies" include only those specified goods that are, or may be, used directly or indirectly in the defence of Canada. Goods purchased for DND's day-to-day operations are not eligible.

4.70.70 Services - Non-permanent residents

Effective date: 2010-01-11

1. The Immigration and Refugee Protection Act and Regulations set out the conditions under which non-permanent residents obtain employment authorization before receiving permission to enter Canada for temporary work. This includes temporary entry to perform work under contract to the federal government.
2. For the procurement of goods and services that may result in the need for the services of non-permanent residents to be performed in Canada, the following appropriate SACC Manual clauses must be included:
   1. A2000C when the contract is to be with a Canadian-based supplier; and
   2. A2001C when the contract is to be with a foreign-based supplier.

4.70.75 Insurance

Effective date: 2010-01-11

1. When there are specific insurance requirements for a requirement, SACC Manual clause G1001C may be used in the contract. Alternatively, when insurance provisions do not apply to a specific requirement, clause G1005C may be used in the contract.
2. Contracting officers must insert the applicable insurance clauses contained in subsection 5-G of the SACC Manual. For more information, see Annex 4.7: Insurance Clauses for insurance clauses, Annex 4.8: Insurance of Government-owned or leased vehicles for insurance of government-owned or leased vehicles, and Annex 4.9: Insurance of Government-owned or leased equipment for insurance of government-owned or leased equipment. Also consult the Risk Management Web site. For any additional information related to insurance, contracting officers may contact the Risk Management Advisory Services, PWGSC, by e-mail at rcnscgra.ncrrmias@tpsgc-pwgsc.gc.ca.

4.70.80 Contract financial security

Effective date: 2010-01-11

1. When the decision to obtain contract financial security has been taken, the contracting officer must stipulate in the solicitation documents that contract financial security will be required. SACC Manual clause E0007C must be used in conjunction with E0008C when the contractor is required to provide contract financial security after contract award. The clause E0005C must be used in conjunction with E0008C when the successful supplier must provide a security deposit as contract financial security.
2. Any letter of credit received by Canada must have an appropriate expiry date. The letter of credit should not have its expiry date coincide with the projected cessation of the risk it covers. For instance, the expiry date stated in the letter of credit should not be the same date as that projected for the completion of the work. The expiry date should allow for a comfortable turn-around time from the estimated date of completion of the work to ensure that the contracting officer is satisfied that the contractor has discharged its obligations for which the letter of credit was provided. If the contractor has not met its obligations, the contracting officer must have sufficient time to prepare and present the required demand for payment under the letter of credit.
3. When financial security in the form of a performance bond is required in the contract, clause E5000C must be used.
4. When a contract financial security in the form of labour and material payment bond is required, clause E8000C must be used.

4.70.85 Controlled goods

Effective date: 2024-04-19

Whenever the controlled goods program applies to a requirement, SACC Manual clause A9131C must be used in contracts to inform the contractor of its obligations under the controlled goods program. When the contract is for the Department of National Defence, clause B4060C must be used in the contract.

4.70.90 Limitation of liability

Effective date: 2022-10-20

1. Limiting a contractor's liability should be an exception to the normal practice of using the standard conditions. When the decision is made to limit a contractor's liability to Canada, contracting officers, in conjunction with departments, must be able to demonstrate that the risks associated with the procurement have been analyzed and that the limitation of liability provides adequate protection to Canada. For more information on risk management, consult Chapter 3 - Procurement strategy.
   Decisions with respect to limiting a contractor's liability should be made before the solicitation release or, in instances of non-competitive contracts, before the start of negotiations.
   When limitation of liability applies to a requirement, SACC Manual limitation of liability clauses may be included in the contract. The applicable dollar amount in the clause is to be determined from the appropriate commodity grouping (usually "the Contract Price at the time the damage occurs" or a pre-determined dollar amount established by the commodity grouping).
2. When limiting a contractor's liability to Canada, but not limiting each party's liability for damages to third parties, clause N0001C must be used. Typically, this clause would be used when a commodity grouping exists (other than IM/IT or satellite services, which have their own clauses) or after a risk assessment has been performed to determine the risk exposure and amount of protection required by Canada.
3. When limiting a contractor's liability to Canada and requiring the contractor to indemnify Canada against third party claims, clause N0002C must be used.
4. Clauses N0001C and N0002C are similar, in that both create a limit on the contractor's liability for damages to Canada. However, the two clauses deal with the contractor's liability for claims made by third parties in different ways. N0001C essentially provides that the parties agree to allow the laws in the jurisdiction of the contract to determine who is responsible for any damages to third parties. It then goes on to provide that, if Canada must pay the third party for damages caused by the contractor because of joint and several liability, the contractor must reimburse Canada for that amount. In short, under clause N0001C, each party is responsible for any damages that it causes to third parties. On the other hand, clause N0002C states that the contractor must indemnify Canada against any third party claims that relate to the contract.
5. When limiting a contractor's liability to Canada for first and third party claims, clause N0003C must be used.
6. Limiting a contractor's liability to Canada for third party claims should be avoided, as the exposure of risk to Canada could be extensive. Limiting a contractor's third party liability can only be done under a very limited number of circumstances, generally in situations concerning non-competitive contracts. When the decision is made to limit a contractor's third party liability, the appropriate approvals must be sought as follows:
   1. Limiting contractor’s third party liability without a substantive transfer of risk requires approval by Director, Acquisitions Program, Headquarters, responsible for the area/commodity; and
   2. Limiting contractor’s third party liability with a substantive transfer of risk requires Treasury Board (TB) approval, through the Assistant Deputy Minister (ADM), Procurement Branch, or ADM, Defence and Marine Procurement, and the department’s CFO approval.
7. For the satellite services requirements where special authority was granted by the TB to allocate risk, clause N0008C must be used.
8. For the Public Cloud Software as a Service (SaaS) services requirements where special authority was granted by the TB to allocate risk, clause N0004C must be used. The new clause N0004C indicates: Limitation Per Incident: Subject to the following section, irrespective of the basis or the nature of the claim, the Contractor's total liability per incident will not exceed the cumulative value of the Contract invoices for 12 months preceding the incident.
9. For Information Management/Information Technology (IM/IT) requirements where special authority was granted by the Treasury Board to allocate risk, SACC Manual clause N0000C must be used only for IM/IT contracts.

4.70.95 Fair wages

Effective date: 2014-06-26

This section is removed from the Supply Manual as a result of the repeal of the Fair Wages and Hours of Labour Act on January 1, 2014.

For reference purposes, section 4.70.95 is available in the Supply Manual Archive (accessible only on the Government of Canada network), Version 2014-2.

4.70.100 Transportation costs information

Effective date: 2020-05-28

1. The Incoterms 2000 "FCA Free Carrier (...named place)" must be used in all Department of National Defence (DND) sole source contracts, all repair and overhaul contracts where transportation is not part of the competitive bid, and in all United States (U.S.) Foreign Military Sales contracts (not all U.S. contracts). DND will manage the inbound logistics (coordinate, arrange and pay for all inbound transportation) for these contracts. For these contracts, the contractor must deliver these goods " FCA Free Carrier", and the named place will always be the contractor's facility, unless specified otherwise by DND. The contracting officer must include in the contract either Standard Acquisition Clauses and Conditions (SACC) Manual transportation clause D0035C or D0037C. These clauses direct the contractor to obtain shipping instructions from DND and how to do so.
2. If the contractor is not located in Canada, and the goods are to be imported into Canada by DND, the contracting officer must include clause C2608C and, when applicable, clause C2610C. If the goods are to be imported into Canada by the contractor, include clause C2611C, if applicable.
3. To assist contracting officers in determining which shipping clause is applicable for use in their procurement, the following list of clauses and their application is provided for consideration:
   1. DND contracts:
      1. D0035C: for foreign-based contractors and US Foreign Military Sales contracts (clauses C2608C and C2610C may apply);
      2. D0037C: for Canadian contractors;
      3. D4001C: for delivery FOB destination.
   2. All other government departments:
      1. D4000C: for delivery FOB origin (use clauses C5200T in bid solicitations and C5200C or C5201C in contracts);
      2. D4001C: for delivery FOB destination (use clauses C5200T in bid solicitations and C5200C in contracts).

4.70.105 Ontario Labour Legislation

Effective date: 2010-01-11

For contracts for janitorial, food catering and security services when the contractor must keep its employees' records up to date and provide, upon request, information to the contracting officer in accordance with Ontario labour legislation, SACC Manual clause A0075C must be used. See Annex 4.6: Ontario Labour Legislation.

4.75 Issuance of the solicitation

Effective date: 2010-01-11

4.75.1 Client department review of elements of a solicitation

Effective date: 2010-01-11

1. For sensitive or high-risk procurements, before issuing the solicitation, the contracting officer must clearly explain to the client department their responsibilities with respect to the solicitation and obtain written confirmation from the client department via e-mail, facsimile or mail, the following:
   1. that the Statement of Work, Statement of Requirement and/or the technical specifications, which will be included in the solicitation, accurately represent their requirements; and
   2. that the client department concurs with the evaluation criteria and contractor selection methodology detailed in the solicitation, and that the ratio of percentages with respect to the technical evaluation in relation to the price evaluation represents value for money.

2. Contracting officers should refer their client departments to any formal agreements between PWGSC and the client department concerning the division of responsibilities relating to the procurement process (see Annex 1.1: Matrix of responsibilities between PWGSC and client departments for the procurement of goods and services (generic)).

   The contracting officer must record on file all significant decisions made in consultation with the client department, regarding requirement definition and technical evaluation. For more information on evaluation criteria, see 4.35 Evaluation criteria.

3. It is the client department's responsibility to determine the required level of authority of the personnel authorized to provide the client department confirmation detailed above.

4.75.5 Determining the solicitation period

Effective date: 2021-05-20

1. Suppliers must always be provided a reasonable amount of time to prepare and submit responsive tenders, regardless of any prescribed minimum solicitation periods. The setting of a solicitation closing date must take into account the level of complexity of the procurement and the extent of subcontracting anticipated. Sufficient time must be allowed for a supplier to obtain the solicitation, and any additional material, if applicable, and to prepare and submit a response.

   Except for low dollar value procurements (i.e. below $25,000 for goods and $40,000 for construction and services, including all applicable taxes), solicitation periods should be a minimum of 15 calendar days, unless there is a state of urgency.

2. For procurements that are not subject to any trade agreements, the solicitation period (whether publicly advertised or not), should be a minimum of 15 calendar days either from the date the requirement is posted publicly, or, in the case of procurements not publicly advertised, from the date the solicitation is released, unless there is an urgency. The solicitation period for low dollar value procurements (i.e. below $25,000 for goods and $40,000 for construction and services, including all applicable taxes) may be less than 15 calendar days, as appropriate for efficiency and cost effectiveness.
3. For procurements subject to only the Canadian Free Trade Agreement (CFTA), the solicitation period (whether publicly advertised or not), should be a minimum of 15 calendar days either from the date the requirement is posted publicly, or, in the case of procurements not publicly advertised, from the date the solicitation is released, unless there is an urgency. If there is an urgency, then the solicitation period may be less than 15 calendar days.
4. For procurements subject to one or more international trade agreements:
   1. In general:
      1. The minimum solicitation period is 40 calendar days, which can be reduced by five (5) days, to a minimum of 25 calendar days, for each of the following conditions:
         1. The notice of proposed procurement (NPP) is published by electronic means;
         2. All the tender documentation is made available by electronic means from the date of publication of the NPP;
         3. The procuring entity accepts tenders by electronic means.
      2. This minimum solicitation period may be further reduced to:
         1. A minimum of 15 calendar days, if at least 40 days and not more than 12 months in advance of the publication of the NPP, the procuring entity has published a notice of planned procurement which contains:
            1. a description of the procurement;
            2. the approximate final dates for the submission of tenders or requests for participation;
            3. a statement that interested suppliers should express their interest in the procurement to the procuring entity;
            4. the address from which documents relating to the procurement may be obtained; and
            5. as much of the information that is required for the NPP, as is available;
         2. A minimum of 15 calendar days, where limited tendering is used.

   2. For procurements of commercial goods and services, provided that the Notice of Proposed Procurement (NPP) and tender documentation are published at the same time by electronic means, the solicitation period should be a minimum of 15 calendar days. Commercial goods and services are generally “off-the-shelf” requirements that include little to no customization and for which a price could be quoted from a catalogue or a standard service charge would apply. Where 15 calendar days is impracticable, the solicitation period may be reduced to a minimum of 13 calendar days, or, if tenders are accepted electronically, to a minimum of 10 calendar days.

      If the NPP and tender documentation are not published at the same time by electronic means, then the general rules regarding minimum solicitation periods for procurements subject to one or more international trade agreements, described above, apply.

   3. If there is an urgency that renders the normal solicitation period (established in accordance with the above) impracticable, the solicitation period may be reduced to:
      1. A minimum of 10 calendar days, provided that the state of urgency can be duly substantiated by the procuring entity; or
      2. To less than 10 calendar days, where limited tendering is used.

5. When establishing a one-time or permanent list of qualified suppliers, the prequalification period must always be a reasonable period of time for suppliers to prepare and submit their qualifications. If one or more international trade agreements apply, the Invitation to Qualify or the Request for Supply Arrangement (RFSA) must be posted for at least 25 calendar days before any resulting bid solicitation(s) can close. If a state of urgency that is duly substantiated by the procuring entity renders this time impracticable, this time period may be reduced to no less than 10 days.

   For procurements done under a one-time list of prequalified suppliers or Supply Arrangement, the solicitation period is to be determined pursuant to obligations outlined above.

   Further information on trade agreement obligations for lists of prequalified suppliers can be found in Section 3.25 Trade agreements tendering approaches.

6. Notices with closing dates only appear as “Expired” on GETS the next business day. The expired notice and the associated documents remain available on GETS.
7. A summary of the guidance on minimum solicitation periods can be found in Annex 4.10.

4.75.10 Public advertisement

Effective date: 2013-11-06

Public advertisement using the Government Electronic Tendering Service (GETS) is Public Works and Government Services Canada's (PWGSC) preferred notification process for competitive procurement.

GETS is where the Government of Canada posts procurement opportunities and allows suppliers to search for them on-line. Buyandsell.gc.ca/tenders is the official site for Canada to meet its trade agreement obligations and is the authoritative and first source for Government of Canada tenders. For more information about GETS visit the Buyandsell.gc.ca Tenders or contact the InfoLine at 1-800-811-1148.

4.75.15 Notice of Proposed Procurement

Effective date: 2024-02-16

1. Notification that a solicitation opportunity is available occurs through the posting of a Notice of Proposed Procurement (NPP) on the Government Electronic Tendering Service (GETS).
2. A NPP is a summary of the solicitation that briefly describes the requirement, and provides pertinent information that will assist suppliers to determine their interest in fulfilling the requirement and their ability to successfully meet any key conditions for participating. If applicable, contracting officers must indicate in the NPP which trade agreement or agreements apply or if Canadian content restrictions apply. (For example, solicitations may specify that the requirement has been set aside under the Procurement Strategy for Indigenous Business or restricted to Canadian-based suppliers as a result of a National Security Exception. In these cases only Indigenous suppliers or Canadian-based suppliers respectively would be eligible to bid.)
3. The NPP must indicate whether additional material will be posted on GETS or made available separately.
4. Many procurement units have developed templates to assist contracting officers to develop NPPs. Contracting officers should consult with their managers to determine if templates are routinely used in that procurement unit.
5. The NPP should advise the suppliers of their option to request a debriefing. For samples of suggested text, refer to the Standard Procurement Templates (Simple, MC, HC, RFSO and RFSA) of the SACC Manual. Any other notices (i.e., newspapers) should contain the same statement.
6. When entering the point of delivery information on the NPP for a standing offer or supply arrangement, the contracting officer must select only those provinces or territories where potential deliveries may occur.

4.75.15.1 Official Language policy applicable to a Notice of Proposed Procurement

Effective date: 2022-05-13

With the promulgation of PN-48R1- Requirements in respect of the Official Languages Act, this section was removed.

For reference purposes only, section 4.75.15.1 is available in the Supply Manual Archive (accessible only on the Government of Canada network), Version 2021-3.

4.75.15.5 Language designation of offices

Effective date: 2010-01-11

1. PWGSC offices designated as being bilingual offices:
   • Moncton, N.B.
   • Montreal, Que.
   • Saint John, N.B.
   • Quebec, Que.
   • National Capital Region
   • Bagotville, Que.
2. PWGSC offices designated as being unilingual offices:
   • St. John's, N.L.
   • Winnipeg, Man.
   • Calgary, Alta.
   • Halifax, N.S.
   • Brandon, Man.
   • Vancouver, B.C.
   • Pembroke, Ont.
   • Saskatoon, Sask.
   • Victoria, B.C.
   • Willowdale, Ont.
   • Regina, Sask.
   • Whitehorse, Y.T.
   • Mississauga, Ont.
   • Edmonton, Alta.

4.75.20 Procedure for posting of Notice of Proposed Procurement on Government Electronic Tendering Service

Effective date: 2023-03-30

1. For procurements subject to any trade agreements, posting on GETS is required when using:

   1. open tendering; and,
   2. selective tendering:
      1. If subject to the CFTA only, only an invitation to qualify/request for supply arrangement must be posted on GETS. For further information on requirements related to prequalification, see 4.10.25.15 Canadian Free Trade Agreement and use of supply arrangements and 4.10.25.20 Ongoing qualification process.
      2. If subject to one or more international trade agreements, both the invitation to qualify/request for supply arrangement and the NPPs must be posted on GETS. For further information, see 4.10.25.5 International trade agreements and use of Supply Arrangements.

   It is not required to post on GETS if using limited tendering, though posting on GETS is still recommended.

2. Contracting officers can create and transmit NPPs, as well as the solicitation document to GETS, through the Electronic Procurement Solution (EPS).
3. To ensure that solicitation packages are posted to GETS the next business day, contracting officers must issue their notices and solicitation documents no later than 6:00 a.m. (ET). The required files are attached using the Tender Management Application (TMA) prior to posting on GETS. For more information about file attachment through TMA, please see the Electronic attachments section of the Tender Management Application (TMA) Frequently Asked Questions page.
4. Contracting officers are responsible for preparing and posting procurement notices on GETS, and, in the case of selective tendering procedures, any annual notices, which establish and maintain a permanent list of qualified suppliers.

4.75.25 Procedures for posting solicitation documents on Government Electronic Tendering Service

Effective date: 2023-03-30

1. PWGSC Contracting officers use the Electronic Procurement Solution (EPS) to create their solicitations for each publicly advertised competitive solicitation that are then posted on GETS.
2. The CanadaBuys Service Desk acts as a focal point between GETS and the contracting officers to facilitate corrections.
3. Contracting officers should check GETS the day after issuing a notice. If there are discrepancies, or the notice has not been posted, the contracting officer should contact the CanadaBuys Service Desk.
4. The contracting officer must ensure that the notice and solicitation(s) (including all attachments) are accurate, complete and have been successfully posted on GETS. Corrections required on solicitations remain the responsibility of the contracting officer.

4.75.30 Distribution of material not electronically available

Effective date: 2013-11-06

1. When the solicitation or additional material cannot be posted on GETS, contracting officers must ensure the solicitations, in a physical format (such as paper, CD or DVD), or the additional materials (for example, samples, technical drawings and specifications) are available and are distributed to others.
2. Contracting officers should confirm that documents are not protected by any ownership restrictions and that they can be copied and distributed.
3. To obtain the required copies of non-electronic solicitations, contracting officers may make the copies themselves or request the required copies from the client department. The client department initiating the requisition will be responsible for the duplication costs associated with ensuring that sufficient copies of a procurement package are available.
4. When additional materials associated with a solicitation (for example, samples or protected documents) are being sent directly to suppliers, the originating PWGSC office is responsible for selecting an appropriate method to ensure that this documentation or material is sent to each supplier that requests a solicitation.
5. If technical data must be sent to suppliers from a different source, for example, distributed by the client department), the solicitation should not be posted until the data is available from that source. The solicitation must identify the source.
6. Suppliers are responsible for obtaining copies of the necessary technical data if they are available to the trade through normal business channels.

4.75.35 Contacting suppliers directly during the solicitation period

Effective date: 2010-01-11

1. On occasion, based on commodity/market knowledge, a contracting officer may conclude that suppliers of a good or service will not see or respond to a solicitation if it appears only on the GETS. In such cases, in order to stimulate effective competition and seek best value for Canadian taxpayers, the contracting officer may contact all such known suppliers to inform them that the solicitation opportunity has been posted.
2. This contact must only take place after the Notice of Proposed Procurement has appeared on the GETS, and it should take place as quickly as possible so that the suppliers contacted do not lose time. To ensure that there will be no question of preferential treatment, this communication should be in writing so that it can be shown that all suppliers had access to the same information at the same time.
3. The specific purpose of this contact is to ensure that the suppliers know that there is an opportunity available and to direct them to GETS. For that reason, the contact will be limited to giving brief information about the good or service being procured and to providing the appropriate reference (one or more of reference number, Source ID and solicitation number). It must not include any information that will not be available to suppliers who find out about the opportunity directly through GETS.
4. Contracting officers must document on the file, the date and name of each supplier that was contacted. The recommended method of notification is the provision of a copy of the NPP.

4.75.40 Distribution of solicitation material to invited suppliers

Effective date: 2013-11-06

1. When procurement is not going to be advertised on GETS, the contracting officer must ensure the distribution of solicitations to invited suppliers.
2. For requirements not subject to public advertising, the list of suppliers being invited must be released automatically to all suppliers on that list at the time of solicitation. Lists should be updated as new suppliers request the solicitation.
3. When the client department is responsible for distributing additional technical documentation that may accompany the solicitation, the contracting officer must forward the name and address of the invited suppliers to the client department. Client departments should be requested to document that the technical material was distributed to the appropriate recipients.
4. When dealing with sensitive (designated/classified) requirements, the source list or solicitation and contract information are not generally released. Requests for the List of Suppliers should be referred to the Access to Information and Privacy Office at 819-956-1820.

4.75.45 Use of source lists

Effective date: 2010-01-11

4.75.45.1 Solicitation by direct invitation

Effective date: 2010-08-16

1. Source lists are generally the basis for requesting suppliers to bid/provide an offer or arrangement when a competitive procurement is not publicly advertised.
2. Normally, where source lists are used, other than rotational source lists:
   1. Any other supplier making a request may be provided with a bid solicitation and be considered for evaluation.
   2. These lists may be supplemented by a contracting officer's knowledge of potential sources and recommendations made by the client.

4.75.45.5 Requirements subject to trade agreements

Effective date: 2020-07-01

1. For requirements subject to the international trade agreements and the Canadian Free Trade Agreement, source lists may be established for particular goods and services, where it is appropriate to establish a list of pre-qualified suppliers. Such lists should be refreshed at a minimum annually.

   Open tendering procedures, using GETS, must be used to invite suppliers to submit their expressions of qualifications for evaluation and placement on the list, if they meet the selection criteria. Suppliers must be allowed to qualify at any time, and all qualified suppliers must be included on the list.

2. For bid solicitations that are subject to the CFTA only, all suppliers on the source list must be invited to bid, unless the invitation to qualify stated a limitation on the number of suppliers that will be permitted to tender and included the criteria for selecting the limited number of suppliers, in which case a limited number of qualified suppliers may be invited to tender. It is not required to post a NPP on GETS. For further information, see 3.25 Trade agreements tendering approaches, 3.50.5 Applicability of trade agreements to Standing Offers and Supply Arrangements, and 4.10.25.15 Canadian Free Trade Agreement and use of Supply Arrangements.

3. For bid solicitations that are subject to one or more international trade agreements, a Notice of Proposed Procurement (NPP) must be published on the GETS. All suppliers on the source list must be able to bid. Further, if a supplier that is not included on the source list requests to participate in the bid solicitation, they must be able to apply for qualification. If qualified, the supplier must be included in the SA within a reasonable period of time and be allowed to participate in the procurement in question. For further information, see 3.25 Trade agreements tendering approaches, 3.50.5 Applicability of trade agreements to standing offers and supply arrangements, and 4.10.25.5 International trade agreements and use of Supply Arrangements.

4.75.45.10 Requirements not subject to trade agreements

Effective date: 2020-07-01

1. For requirements which are not subject to trade agreements and where open competition is not appropriate, due to the nature of the requirement, bids/offers/arrangements may be solicited directly from a list of suppliers. If a source list for the particular good or service does not exist, contracting officers should consider using the Supplier Registration Information service to identify potential sources of supply, especially for low dollar value goods and services. In preparing the source list, the contracting officer may include suppliers suggested by the client department.
2. Automated Source Lists such as the Automated Vendor Rotation System (AVRS) and SELECT, provide a systematic rotation of vendors in order to ensure equity of opportunity for suppliers, and must be used where they apply.
3. Whenever a supplier requests an opportunity to submit a bid/offer/arrangement on a specific requirement, that supplier must be given the opportunity, provided that it is not necessary to cancel the existing solicitation and issue a new one. This provision does not generally apply to rotational source lists such as SELECT, which typically limits the solicitation to those suppliers selected for a particular requirement.
4. Contracting officers are reminded that an effort should be made to ensure best value to Canada in terms of who is invited, and also that the principle of "fairness and access" be displayed in a practical manner by rotating opportunities to submit a bid/offer/arrangement within the suppliers on any given list.

4.80 Solicitation period

Effective date: 2010-01-11

The following information is in relation to activities that may occur during the solicitation period. For more information on setting the solicitation period, see Chapter 3 - Procurement strategy.

4.80.1 Communications during the solicitation period

Effective date: 2010-01-11

1. To ensure the integrity of the competitive solicitation process, enquiries and other communications, regarding the solicitation, must be directed only to the contracting officer that is identified in the solicitation, not to the client department, or other government officials. See Standard Acquisition Clauses and Conditions Manual standard instructions and clause A0012T.
2. Contracting officers should avoid one-on-one contact or meetings with suppliers during the solicitation period. All communications should be in writing, to the extent possible.

4.80.5 Handling questions during the solicitation period

Effective date: 2014-06-26

1. Questions from suppliers should be submitted in writing to the contracting officer before the date indicated in the solicitation document.
2. Simple questions where the answer does not affect other suppliers and how they will respond to the solicitation, may be answered directly to the supplier asking the question.
3. More complex questions or questions concerning the requirement itself should be forwarded to the client department for response back to the contracting officer. Technical questions and answers, together with questions and answers that can be addressed by the contracting officer, should be accumulated and posted as an addendum/amendment to the solicitation, in the case of public advertisement, or issued directly as an addendum/amendment to the suppliers. When posting questions during the solicitation period, care should be taken to protect the identity of the supplier asking the question(s).
4. Changes to the solicitation itself, to reflect clarifications resulting from the questions, including extensions to the solicitation period, if granted, must be released as an amendment to the solicitation.
5. It is the responsibility of the bidder to monitor the Government Electronic Tendering Service (GETS) for any updates or amendments to the solicitation notices.

4.80.10 Changes to the solicitation

Effective date: 2013-11-06

1. Any significant change in the information provided in the Notice of Proposed Procurement (NPP) or solicitation documents before the solicitation closing date, requires an amendment to the NPP and/or solicitation document. All amendments must be given the same circulation as the original NPP and/or solicitation documents.
2. Contracting officers must ensure that the amendments to the NPP and/or solicitation documents are complete. The supplier may then view the actual solicitation amendment document on GETS and/or download it electronically. The update will then form part of the solicitation document.
3. When a solicitation document is cancelled and reissued, a new NPP must be submitted for posting on GETS.
4. Any significant information given to one supplier with respect to a proposed procurement must be given to all other interested suppliers in adequate time to permit the suppliers to consider such information and respond to the solicitation. In providing this information, contracting officers must take into consideration the time required to post amendments on GETS.
5. If there is insufficient time to ensure that all suppliers can consider the information and respond accordingly, contracting officers may consider extending the solicitation period or cancelling and reissuing the solicitation.
6. The contracting officer must inform the Bid Receiving Unit (BRU) of any change to solicitation closing dates or times and must ensure that such notification has been received by the BRU.
7. A decision to extend the solicitation period beyond the initially established closing date is a business decision that can be made by the contracting officer, based on the circumstances of the particular procurement. It may be possible to process an extension of the bidding period in a relatively short time frame (more or less 24 hours) when the solicitation of bids has been done using source lists or when the publicly advertised procurement is posted on GETS.

4.80.15 Assistance to suppliers

Effective date: 2013-11-06

1. For general information on doing business with the federal government, contracting officers should direct suppliers to Buyandsell.gc.ca.
2. Suppliers interested in doing business with the federal government are encouraged to register in the Supplier Registration Information system to be assigned a Procurement Business Number (PBN).
3. Suppliers are encouraged to check the Government Electronic Tendering Service (GETS) to search for government procurement opportunities.
   For general procurement enquiries, suppliers should contact the InfoLine at 1-800-811-1148.
4. Questions about a particular solicitation must be addressed to the contracting officer identified in the solicitation.

4.85 Closing procedures

Effective date: 2010-01-11

In the National Capital Region, bids/offers/arrangements are received and processed centrally at the Bid Receiving Unit (BRU) located in Place du Portage, Gatineau, Quebec. In the regions, operating procedures may be adapted to suit local conditions.

4.85.1 Late bids, offers and arrangements

Effective date: 2022-03-29

1. For all competitive solicitations, the solicitation closing date and time stipulated in the solicitation are firm. It is the responsibility of suppliers to ensure that the bid, offer or arrangement, as applicable, is delivered on time to the Bid Receiving Unit or to the contracting officer that is specified in the solicitation. The only acceptable evidence to show timely receipt of the bid, offer or arrangement, as applicable, is the receipt issued by the specified Bid Receiving Unit.

   1. The only pieces of evidence relating to a delay in the Canada Post Corporation (CPC) system that are acceptable to PWGSC are:

      1. a CPC cancellation date stamp;
      2. a CPC Priority Courier bill of lading;
      3. a CPC Xpresspost label;

      that clearly indicates that the bid, offer or arrangement was sent before the solicitation closing date.

   2. The only piece of evidence relating to a delay in the CPC Connect service provided by the CPC system that is acceptable to PWGSC is a CPC Connect service date and time record indicated in the CPC Connect conversation history that clearly indicates that the bid was sent before the solicitation closing date and time.
2. For all competitive solicitations, late bids, offers or arrangements, submitted using means other than the Canada Post Corporation's Connect service or other electronic delivery methods, are to be returned unless they qualify as delayed bids or offers or arrangements.
3. For all competitive solicitations, bids, offers or arrangements (as applicable) submitted using Canada Post Corporation's Connect service, conversations initiated by Bid Receiving Units via the CPC Connect service pertaining to a late bid, offer or arrangement (as applicable), will be deleted. Records will be kept documenting the transaction history of all late bids, offers, and arrangements submitted using CPC Connect service.
4. Contracting officers should consult the Standard Acquisition Clauses and Conditions Manual's applicable standard instructions.

4.85.5 Delayed bids/offers/arrangements

Effective date: 2010-08-16

1. Contracting officers should consult the applicable SACC Manual standard instructions for delayed bids/offers/arrangements.
2. However, when dealing with bids submissions for construction contracts, contracting officers should refer to section 9.10.15 Construction services.

4.85.10 Transmission by facsimile

Effective date: 2010-01-11

1. Contracting officers should consult the applicable SACC Manual standard instructions on transmission by facsimile for bids/offers/arrangements.
2. To ensure that official receipt time-keeping equipment represents the correct time, the specified Bid Receiving Unit must calibrate this equipment and other official time pieces against the official National Research Council (NRC) time standard, at least once every two working days.
   The NRC time standard can be checked 24 hours a day at 613-745-1576 (English) or 613-745-9426 (French).

4.90 Receipt of bids/offers/arrangements

Effective date: 2022-03-29

1. Contracting officers should consult the section on submission of the bid or offer or arrangement contained in the applicable SACC Manual standard instructions.
2. Bids, offers and arrangements received by the specified BRU will be logged, saved (electronic version) and kept unopened (paper version) in a secure locked location until after the solicitation closing date and time.
3. If the envelope or the package containing the bid/offer/arrangement does not provide sufficient information for identification, that is, the solicitation number, the name of the supplier, return address and solicitation closing date and time, it will be necessary to open the envelope or the package. The specified BRU staff will, in these instances, transfer the necessary information to the envelope or the package, reseal and initial the envelope or the package before it is placed in the bid box.
4. Paper version bids/offers/arrangements received after the solicitation closing date and time, or any solicitations that have been cancelled, are returned to the suppliers unopened, and the electronic versions will be deleted. A covering letter, explaining the reason why the late bid/offer/arrangement (paper and electronic) is not being considered will be sent to the supplier. If the envelope or the package does not contain sufficient information to identify the supplier and/or the solicitation number, the specified BRU staff will open the envelope or the package for identification purposes, and return the bid/offer/arrangement with the appropriate letter explaining the reason for opening the bid/offer/arrangement.
5. In the NCR, bids/offers/arrangements received by the mailroom are time and date stamped and delivered unopened to the BRU.
6. After the solicitation closing date and time, paper version bids/offers/arrangements will be removed from the secure locked location. All paper and electronic bids/offers/arrangements will be opened by a designated official, in the presence of at least one witness.
7. The specified BRU will screen all bids/offers/arrangements to ensure that they are complete. For bids/offers/arrangements received where penciled in or corrected information is shown, a photocopy of the bid/offers/ arrangements is made and kept for audit purposes. This is to ensure that a bid/offer/arrangement cannot be altered. As evidence that the documents (paper versions) were processed and verified, all financial security documents are perforated, and the front page of each technical documentation volume is hand-stamped. All the bids/offers/arrangements are then verified and certified against the source list, which is kept on the procurement file.
8. When a need is identified to receive paper version bids/offers/arrangements at a location other than the specified BRU (for example, a large number of bulky bids/offers/arrangements are expected), contracting officers must make arrangements with the bid receiving personnel before establishing a solicitation closing date.

9. An assessment of this other location will be carried out by bid receiving personnel, in consultation with departmental security personnel, to ensure the complete physical security of bids/offers/arrangements from the time of receipt to the time of opening. The personnel of the bid receiving location are responsible for recording bids/offers/arrangements received at these locations.

10. When bids/offers/arrangements are solicited by telephone, the contracting officer must accurately transcribe the information taken, enter the time and date, and initial the written record on file immediately.

4.90.1 Secure Handling of bids/offers/arrangements

Effective date: 2022-05-02

1. The specified Bid Receiving Unit (BRU) will follow the instructions given by the contracting officer regarding security of bids/offers/arrangements.
2. If a bid/offer/arrangement is marked as "protected," "confidential," "secret" or "top secret," the government procedures for the transmittal of "Protected/Classified" information or assets must be followed. All bids/offers/arrangements and other information or assets concerning a sensitive bid/offer/arrangement must be hand-delivered to the contracting officer that originated the solicitation, and a receipt must be obtained.
3. Information about security procedures is available on the Contract Security Program’s website.

4.90.5 Public opening

Effective date: 2022-03-29

1. When bids are opened publicly, the paper version bids are removed from the secure locked location, transported to the place of public opening and all bids (paper and electronic version) received will be opened in the presence of a witness. The name and address of each bidder and the amount of each bid are read out.
2. If there are multi-items listed in the bid but there is no total bid price, the bid price on each item is read out. It is also confirmed that bid security (if required) is included in the bid.

4.90.10 Receipt of quotations

Effective date: 2010-01-11

1. Written bids (quotations) submitted in response to a Request for Quotations, which are sent directly to the contracting officer, will be declared non-responsive if received after the closing date and time, regardless of the date of mailing.
2. To ensure that all responsive quotations are considered and to accommodate internal mail delivery schedules, contracting officers may need to delay the award of a purchase order until after delivery of the first morning mail on the day following the closing date.
3. Quotations must be signed and dated by the contracting officer upon receipt. Sectors/regions must ensure that the receipt, custody and handling of quotations submitted directly to the contracting officer are conducted in a manner that reflects the principle of fairness to all suppliers.

4.95 Modification and withdrawal of bids

Effective date: 2010-01-11

1. Bids/offers/arrangements may normally be modified, withdrawn or resubmitted before the solicitation closing date if it is done in writing. This includes electronically transmitted responses.
2. For quotations directed to the contracting officer only, to maintain the integrity of the bidding system, no modification will be considered after receipt of the quotation, unless negotiated by PWGSC. Negotiations must be held with all suppliers that submitted responsive quotations.
3. If the solicitation conditions permit and a supplier increases a price before closing, any additional financial security required must be received within a reasonable period of time (normally within five working days).
4. A bid/offer/arrangement withdrawn after solicitation closing cannot be resubmitted.
5. Bids submitted with bid security may be withdrawn without compensation to Canada if there is a significant error on the face of the bid. Approval at the director level is required before an error can be declared significant on the face of the bid. Examples of such errors include a missing page.
6. If a supplier wishes to withdraw a bid/offer/arrangement for any reason other than a significant error on the face of the bid/offer/arrangement, Legal Services must be consulted.
7. If PWGSC allows a supplier to withdraw a bid submitted with bid security without a penalty due to a significant error on the face of the bid, and there was a public opening, an advice notice to that effect, signed by a director, must be sent to all suppliers.

4.100 Canceling and reissuing a solicitation

Effective date: 2023-03-30

1. If a solicitation is cancelled before the closing date, contracting officers must issue a cancellation notice for transmission to the Government Electronic Tendering Service (GETS). The Notice of Proposed Procurement (NPP) will then be marked as "cancelled" on GETS. Contracting officers can no longer cancel solicitations directly on GETS.
2. Contracting officers must notify the Bid Receiving Unit of the cancellation and provide instructions regarding the disposal of any responses to the original solicitation.
3. Contracting officers are responsible for internal distribution of solicitations and updates within PWGSC and to the client departments.
4. If the cancellation takes place after the closing date, suppliers should be advised within 10 calendar days of the cancellation of the solicitation.
5. Contracting officers may reissue a solicitation, where:
   1. A significant change has occurred in a requirement before a contract is awarded or a standing offer or supply arrangement is issued.
      1. If a significant change affects the procurement strategy or has an impact on the level of risk, another procurement risk assessment must be performed.
      2. For example, if the original strategy was to compete electronically and the revised strategy is to direct (or sole source) the requirement, then another procurement risk assessment must be performed to determine if the change in strategy has an impact on the risks already identified.
      3. At the same time, the procurement risk assessment will also identify the appropriate level of contract entry approval based on the revised identified risks.
      4. Approval of the revised procurement strategy is required even if the risk assessment indicates the same approval level as was originally sought.
      5. The approval document must include the details about the new solicitation.

   2. All bids/offers/arrangements are non-responsive or do not represent fair value or where no bids/offers/arrangements were received in response to a competitive solicitation. The trade agreements permit limited tendering procedure in such circumstances. See 3.25 Trade agreements tendering approaches for further information on limited tendering.

   3. The acceptance period for the bid or offer or arrangement has expired before a contract is awarded or a standing offer or supply arrangement is issued.
6. For the following procurements, authorization from the appropriate approval authority must be obtained prior to reissuing a solicitation with no change to the requirement or strategy:
   1. Complexity Level 1: Contracting Officer
   2. Complexity Level 2: Manager
   3. Complexity Level 3: Manager
   4. Complexity Level 4: Director/Regional Director
   5. Complexity Level 5: Director General/Regional Director General
7. Whenever a solicitation is issued to replace an earlier one, the contracting officers must insert Standard Acquisition Clauses and Conditions Manual clause A9043T as the first statement in the reissued solicitation and new Notice of Proposed Procurement (NPP).
8. For procurements that are subject to the international trade agreements and the Canadian Free Trade Agreement (CFTA), a new NPP should be published when a solicitation is cancelled and reissued. If there were no responsive bids/offers/arrangements received in response to the original competitive solicitation and the requirement is not being changed significantly, contracting officers may send solicitations directly to suppliers without publishing a new NPP. However, when following this approach, it is strongly recommended that contracting officers consider reposting the NPP in the interests of openness and transparency, and include in the notice that some suppliers will be invited directly.
9. If a solicitation is cancelled or reissued, the procurement file must be documented to provide details on the rationale to support such a decision.

Annexes

Consult the list below of annexes related to Chapter 4 – Solicitation process.

• 4.1 - Annex: General conditions and supplemental general conditions
• 4.2 - Annex: Intellectual Property
• 4.3 - Annex: Taxes and duties
• 4.4 - Annex: Supplies exempt from Goods and Services Tax/Harmonized Sales Tax
• 4.5 - Annex: Goods subject to Excise Tax
• 4.6 - Annex: Ontario Labour Legislation
  • 4.6.1 - Exhibit A: Proposed letter - Requesting information from outgoing contractor (with a clause)
  • 4.6.2 - Exhibit B: Proposed letter - Requesting information from outgoing contractor (no clause)
• 4.7 - Annex: Insurance clauses
• 4.8 - Annex: Insurance of Government-owned or leased Vehicles
• 4.9 - Annex: Insurance of Government-owned or leased Equipment
• 4.10 - Annex: Summary of guidance on minimum solicitation periods