Annexes for Chapter 3 – Procurement strategy

Annex 3.1: Treasury Board questions for sole source

Effective date: 2024-04-19

Provide responses, as applicable, to the questions contained in the template below in order to explain and justify why exception 6.(d) of the Government Contracts Regulations (GCRs) has been invoked to allow a sole source goods or services contract. All of the questions must be considered and answered by the contracting officer with the assistance of the client department, including confirmation, where appropriate, that the question is not applicable to the contract or standing offer under review. Some guidance is also provided for assistance in responding to the questions.

Note: In the case of a services contracts or standing offers, contracting officers should satisfy themselves that the contract in question is the right instrument, as opposed to such instruments as, but not limited to: a grant; a contribution; or, an employment contract i.e., a term, casual or ministerial appointment.

Treasury Board questions for client answers for sole source procurements

Annex 3.2: Limited tendering reasons contained in the trade agreements

Effective date: 2020-07-01

1. Summary of limited tendering reasons:

   (Note that the Contract Award Process (CAP) codes for each award type are included for reference.)

   Limited tendering may only be used in specific circumstances. Where more than one trade agreement applies, an appropriate limited tendering justification must be found in the limited tendering provision of each agreement.

   1. All of Canada’s free trade agreements allow for limited tendering:
      1. if, in response to a prior notice, invitation to participate or invitation to tender:
         1. no tenders were submitted or no suppliers requested participation;
         2. no tenders that conform to the essential requirements of the tender documentation were submitted;
         3. no suppliers satisfied the conditions for participation; or
         4. the tenders submitted have been collusive,

         provided that the procuring entity does not substantially modify the requirements set out in the notices or tender documentation (CAP Code 05 No Responses to Bid Solicitation);

      2. where the goods or services can be supplied only by a particular supplier and no reasonable alternative or substitute goods or services exist for any of the following reasons (CAP Code 71 Exclusive Rights):
         1. the requirement is for a work of art;
         2. the protection of patents, copyrights or other exclusive rights; or
         3. due to an absence of competition for technical reasons;
      3. for additional deliveries by the original supplier of goods or services that were not included in the initial procurement where a change of supplier for such additional goods or services (CAP Code 74 Interchangeable Parts):
         1. cannot be made for economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, software, services or installations procured under the initial procurement; and
         2. would cause significant inconvenience or substantial duplication of costs for the procuring entity;
      4. only when strictly necessary where, for reasons of extreme urgency brought about by events unforeseeable by the procuring entity, the goods or services could not be obtained in time using open tendering or selective tendering (CAP Code 81 Extreme Urgency);
      5. for goods purchased on a commodity market (CAP Code 20 Goods Purchased on a Commodity Market);
      6. where a procuring entity procures a prototype or a first good or service that is developed at its request in the course of, and for, a particular contract for research, experiment, study or original development. Original development of a first good or service may include limited production or supply in order to incorporate the results of field testing and to demonstrate that the good or service is suitable for production or supply in quantity to acceptable quality standards, but does not include quantity production or supply to establish commercial viability or to recover research and development costs. Subsequent procurements of these newly developed goods or services, however, shall be subject to the applicable Agreement(s); (CAP Code 72 Prototype Purchase);
      7. for purchases made under exceptionally advantageous conditions that only arise in the very short term in the case of unusual disposals such as those arising from liquidation, receivership or bankruptcy, but not for routine purchases from regular suppliers (CAP Code 21 Purchases Made Under Exceptionally Advantageous Cond. Short Term); or
      8. where a contract is awarded to a winner of an architectural design contest (CAP Code 22) provided that:
         1. the contest has been organized in a manner that is consistent with the principles of the applicable Agreement(s), in particular relating to the publication of a NPP; and
         2. the participants are judged by an independent jury with a view to a design contract being awarded to a winner.
   2. Only the CFTA and Canada’s bilateral agreements with Chile, Colombia, Honduras, Panama, and Peru allow for limited tendering:

      where an entity needs to procure consulting services regarding matters of a confidential nature, the disclosure of which could reasonably be expected to compromise government confidences, cause economic disruption or similarly be contrary to the public interest (CAP Code 23 Consulting Services Regarding Matters of a Confidential Nature).

   3. Only the CPTPP and Canada’s bilateral agreements with Chile, Honduras, and Panama allow for limited tendering:

      if additional construction services that were not included in the initial contract but that were within the objectives of the original tender documentation have, due to unforeseeable circumstances, become necessary to complete the construction services described therein. However, the total value of contracts awarded for additional construction services may not exceed 50 per cent of the value of the initial contract (CAP Code 24 Additional Construction Services);

   4. Only the CFTA allows for limited tendering:
      1. if the goods or services can be supplied only by a particular supplier and no reasonable alternative or substitute goods or services exist for any of the following reasons (CAP Code 71 Exclusive Rights):
         1. the supply of goods or services is controlled by a supplier that is a statutory monopoly;
         2. to ensure compatibility with existing goods, or to maintain specialized goods that must be maintained by the manufacturer of those goods or its representative;
         3. work is to be performed on property by a contractor according to provisions of a warranty or guarantee held in respect of the property or the original work;
         4. work is to be performed on a leased building or related property, or portions thereof, that may be performed only by the lessor; or
         5. the procurement is for subscriptions to newspapers, magazines, or other periodicals; and
      2. if goods or consulting services regarding matters of a confidential or privileged nature are to be purchased and the disclosure of those matters through an open tendering process could reasonably be expected to compromise government confidentiality, result in the waiver of privilege, cause economic disruption, or otherwise be contrary to the public interest (CAP Code 23 Consulting Services Regarding Matters of a Confidential Nature).

   For the greatest certainty as to whether an appropriate limited tendering reason exists, contracting officers should refer to the limited tendering provisions found in the applicable trade agreements.

2. Summary of procedural obligations that contracting officers may choose to deviate from when using limited tendering:

   Where a valid limited tendering reason exists, a contracting officer may choose, according to the nature of the procurement, to deviate from certain procedural obligations of the applicable trade agreement(s) in a particular procurement.

   When limited tendering, all of Canada’s free trade agreements allow contracting officers to deviate from certain procedural obligations related to:

   1. Notices (Notices of Intended Procurement, Summary Notices, and Notices of Planned Procurement);
   2. Conditions for Participation;
   3. Qualification of Suppliers (Registration Systems and Qualification Procedures, Selective Tendering, Multi-Use Lists, and Information on Procuring Entity Decisions);
   4. Tender Documentation;
   5. Modifications to Tender Documentation;
   6. Time-Periods; and
   7. Treatment of Tenders and Awarding of Contracts.

   Trade agreement rules regarding technical specifications must still be followed. When using limited tendering, it is recommended that contracting officers continue to follow the obligations of the trade agreements to the greatest extent possible and only choose to deviate from procedural obligations as permitted and as needed.

   For the greatest certainty on which procedural obligations contracting officers are permitted to deviate from when limited tendering, contracting officers should refer to the limited tendering provisions found in the applicable trade agreements.

Annex 3.3: Model content of an Advance Contract Award Notice

Effective date: 2022-05-12

An Advanced Contract Award Notice (ACAN) must be prepared in both official languages. Below is a model that must be used by contracting officers for the preparation of an ACAN. The blocks include guidance for its use as well as examples for some of the items listed.

1. Advance Contract Award Notice (ACAN)
   Begin with an explanation of what an ACAN is by including the statement below in all ACANs.
   An ACAN is a public notice indicating to the supplier community that a department or agency intends to award a contract for goods, services or construction to a pre-identified supplier, thereby allowing other suppliers to signal their interest in bidding, by submitting a statement of capabilities. If no supplier submits a statement of capabilities that meets the requirements set out in the ACAN, on or before the closing date stated in the ACAN, the contracting officer may then proceed with the award to the pre-identified supplier.
2. Definition of the requirement
   Provide a description of the requirement that is sufficiently defined so that industry can understand the government's high-level requirements.
   • The Department of (indicate name of organization) has a requirement for the supply of quantity x (describe the product, system, or equipment, e.g. software licenses, VHF communications system, fire fighting equipment), in accordance with (if applicable) Standard/Specification/Regulation No. x. The product/system/equipment (as applicable) must (describe the salient physical, functional or other essential characteristics, including performance criteria, and any requirement to integrate with existing systems or equipment. Also refer to a part number, model number and/or brand name, if applicable, and add the words "or equivalent". Include all information on any optional items, quantities, periods, etc.).
   • OR
     The Department of (indicate name of organization) has a requirement to (describe the services, e.g. "provide architectural and engineering services"; "provide technical investigation and engineering services in support of..."; "conduct a study of x to assess..."; "carry out a financial audit of x to determine..."; "develop an economic model to permit the analysis of..."). The work will involve the following: (enumerate the tasks and describe the objectives, expected results, performance standards, constraints, and, to the extent possible, deliverables).
3. Criteria for assessment of the Statement of Capabilities (Minimum Essential Requirements)
   Detail the criteria against which the statement of capabilities submitted by potential suppliers will be assessed. This will allow the contracting officer to have an adequate basis for evaluating a potential supplier's statement of capabilities. The pre-identified supplier must be evaluated on the same basis.
   • Any interested supplier must demonstrate by way of a statement of capabilities that its product/equipment/system (as appropriate) meets the following requirements:
     (Summarize the essential functional characteristics or, if necessary to properly define the goods, the physical or design characteristics, and describe any requirements for interchangeability with existing systems or equipment. Also include to the extent possible performance or output criteria. If applicable, refer to recognized Canadian or international standards, specifications, and/or regulations.)
   • OR
     Any interested supplier must demonstrate by way of a statement of capabilities that it meets the following requirements: (this list should include those qualifications deemed essential to carry out the work)
     • Experience (e.g. x years experience in the past x years conducting y; x number of projects similar in size, scope and complexity);
     • Knowledge and understanding of (e.g. x equipment; x economic model; x software);
     • Academic qualifications (e.g. must possess an undergraduate degree from a recognized university in the field of [e.g. business, political science]);
     • Professional designation, accreditation, and/or certification (e.g. professional engineer, Certified General Accountant).
4. Applicability of the trade agreement(s) to the procurement
   Include, if applicable, a statement indicating if the proposed procurement is subject to one or more of the trade agreements.
   This procurement is subject to the following trade agreement(s) (insert only the applicable trade agreement(s)):
   • Canadian Free Trade Agreement (CFTA)
   • Revised World Trade Organization - Agreement on Government Procurement (WTO-AGP)
   • Canada-European Union Comprehensive Economic and Trade Agreement (CETA)
   • Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
   • Canada-Chile Free Trade Agreement (CCFTA)
   • Canada-Colombia Free Trade Agreement
   • Canada-Honduras Free Trade Agreement
   • Canada-Korea Free Trade Agreement
   • Canada-Panama Free Trade Agreement
   • Canada-Peru Free Trade Agreement (CPFTA)
   • Canada-United Kingdom Trade Continuity Agreement (Canada-UK TCA)
   • Canada-Ukraine Free Trade Agreement (CUFTA)
5. Set-aside under the Procurement Strategy for Indigenous Business
   Include, if applicable, the following statement when the procurement is set-aside under the Procurement Strategy for Indigenous Business (PSIB).
   This procurement is set-aside for an Indigenous supplier in accordance with the government Procurement Strategy for Indigenous Business (PSIB). Therefore, only suppliers who meet the definition of an Indigenous business, as defined in the PSIB, may submit a statement of capabilities.
6. Comprehensive Land Claims Agreement(s)
   Include, if applicable, a statement regarding the applicability of the procurement to one or more of the Comprehensive Land Claims Agreements (CLCAs).
   This procurement is subject to the ______________________ (insert the applicable CLCA).
7. Justification for the Pre-Identified Supplier
   Indicate the reason(s)/justification for the pre-identified supplier. This should clearly demonstrate why the pre-identified supplier has been identified as the only supplier capable of performing the work or of meeting the government's requirements. (See 3.15.1 Justification of Non-competitive Process).
8. Government Contracts Regulations Exception(s)
   Indicate all relevant exceptions under the Government Contracts Regulations (GCRs).
   The following exception(s) to the Government Contracts Regulations is (are) invoked for this procurement under subsection ___________________ (for example: subsection 6(d) - "only one person is capable of performing the work").
9. Exclusions and/or Limited Tendering Reasons
   Indicate, as applicable, the exclusion(s) and/or the limited tendering reason(s) invoked (see Annex 3.2 Limited tendering reasons contained in the trade agreements) under the trade agreement(s).
   The following exclusion(s) and/or limited tendering reasons are invoked under the (section of the trade agreement(s) specified):
   • Canadian Free Trade Agreement (CFTA) – Article(s) _____ (insert applicable article(s))
   • Revised World Trade Organization - Agreement on Government Procurement (WTO-AGP) – Article(s) _____ (insert applicable article(s))
   • Canada-European Union Comprehensive Economic and Trade Agreement (CETA) – Article(s) _____ (insert applicable article(s))
   • Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – Article(s) _____ _____ (insert applicable article(s))
   • Canada-Chile Free Trade Agreement (CCFTA) – Article(s) _____ (insert applicable article(s))
   • Canada-Colombia Free Trade Agreement – Article(s) _____ (insert applicable article(s))
   • Canada-Honduras Free Trade Agreement – Article(s) _____ (insert applicable article(s))
   • Canada-Korea Free Trade Agreement – Article(s) _____ (insert applicable article(s))
   • Canada-Panama Free Trade Agreement – Article(s) _____ (insert applicable article(s))
   • Canada-Peru Free Trade Agreement (CPFTA) – Article(s) _____ (insert applicable article(s))
   • Canada-United Kingdom Trade Continuity Agreement (Canada-UK TCA) – Article(s) _____ (insert applicable article(s))
   • Canada-Ukraine Free Trade Agreement (CUFTA) – Article(s) _____ (insert applicable article(s))

   Note: Trade agreements make no reference to ACANs, but if the trade agreement covered procurement is being directed to a supplier, there is a requirement to indicate the exclusion(s) or the limited tendering reason(s) invoked.

10. Ownership of Intellectual Property
    Where intellectual property will be created during the course of the contract, a statement should indicate whether an exception set out in the Treasury Board ARCHIVED - Policy on Title to Intellectual Property Arising under Crown Procurement Contracts is being invoked or if the ownership of intellectual property will rest with the contractor.
    • Ownership of any Foreground Intellectual Property arising out of the proposed contract will vest in the Contractor.
    • OR
      Canada intends to retain ownership of any Foreground Intellectual Property arising out of the proposed contract on the basis that the main purpose of the contract is (insert appropriate exception to the Treasury Board ARCHIVED - Policy on Title to Intellectual Property Arising under Crown Procurement Contracts, e.g. to generate knowledge and information for public dissemination).
11. Period of the proposed contract or delivery date
    Provide the period of the proposed contract or the required delivery, including potential renewal or option years.
    • The product/system/equipment (as appropriate) must be delivered on _________ (insert the delivery date required or requested. If the contract includes optional quantities and/or optional goods, insert the delivery date (e.g. within x days of exercising the option)).
    • OR
      the proposed contract is for a period of x years, from (insert estimated start date) to (insert estimated completion date). (If the contract includes an option to extend the contract period, insert the option information, e.g. two one-year periods.)
    • OR
      if the contract includes deliverables, state the date(s) that the deliverables are due.
12. Cost estimate of the proposed contract
    Include a cost estimate, where appropriate, provided that it will not prejudice negotiations with the proposed contractor (pre-identified supplier), or compromise the pre-identified supplier's competitive position if the requirement proceeds to a traditional or electronic bidding process (could be provided as a range).
    The estimated value of the contract, including option(s), is $ x (GST/HST extra).
13. Name and address of the pre-identified supplier
    Include the name and, usually, the address of the pre-identified supplier (proposed contractor) in the ACAN.
14. Suppliers' right to submit a statement of capabilities
    Provide an explanation to suppliers of how they may proceed in responding to the ACAN.
    Suppliers who consider themselves fully qualified and available to provide the goods, services or construction services described in the ACAN may submit a statement of capabilities in writing to the contact person identified in this notice on or before the closing date of this notice. The statement of capabilities must clearly demonstrate how the supplier meets the advertised requirements.
15. Closing date for a submission of a statement of capabilities
    Include the day, month and year for the closing date for accepting statements of capabilities. See 3.15.5.1 Advance Contract Award Notice time limit.
    The closing date and time for accepting statements of capabilities is (e.g. February 11, 2011 at 2:00 p.m. EST).
16. Inquiries and submission of statements of capabilities Include the name, position, address, phone, fax and email address where suppliers may inquire or submit a statement of capabilities.
    Inquiries and statements of capabilities are to be directed to:
    (Name and title of contact)
    (Address)
    Telephone:
    Facsimile:
    Email:

Annex 3.4: Task Authorization

Effective date: 2011-01-11

Annex 3.4.1: A guide to preparing and administering task authorization for Public Works and Government Services Canada clients

Effective date: 2024-04-19

1.0 Purpose

The purpose of the Guide to Preparing and Administering Task Authorizations is to provide procedural guidance to Public Works and Government Services Canada's (PWGSC's) clients when contracts for services containing task authorizations are issued by PWGSC and the client is authorized to issue individual task authorizations (TAs). This guide incorporates advice on preparing and administering TAs. Many of the principles discussed in this document equally apply to other mechanisms by which goods or services are ordered under a contract on an "as and when requested" basis such as a service order. For the Department of National Defence (DND) requirements, this guide supplements the internal procedure for administering TAs documented in article 3.3.2 of DND's Procurement Administration Manual (PAM).

2.0 Definitions

2.1 Contracts with Task Authorizations

A contract with Task Authorizations (TAs) is a method of supply for services under which all of the work or a portion of the work will be performed on an "as and when requested basis" through predetermined conditions including an administrative process involving task authorizations.

2.2 Task Authorization

A TA is a structured administrative tool enabling PWGSC or a client, or both to authorize work, by a contractor on an "as and when requested" basis in accordance with the conditions of the contract.

3.0 Application of Contracts with Task Authorizations

1. A contract with TAs may be used when there is a definite need for services but the exact nature, the timeframes of the required services, activities and deliverables will only be known when the service(s) will be required during the period of the contract. PWGSC determines when the client's needs would be best addressed by the use of a contract with TAs. If the client is authorized to issue TAs, the limit of this approval would be stipulated in the contract. All TAs in excess of this limit have to be forwarded to PWGSC for authorization. A contract with TAs can be set up to cover multiple years. This approach can eliminate the need to establish a new contract every year. Multiple contracts with task authorizations may be issued in certain circumstances when one contract would not be sufficient to fulfill all requirements. In such cases, the contractors' order of ranking, the specific work allocation process, Canada's total liability for all issue TAs and the authorization limit would be identified in the contracts.
2. Some examples of contracts with TAs are as follows:
   1. a requirement for translation where the work is generally defined and the specific tasks for translation (e.g. a required translation of 50,000 words) are on an as and when requested basis;
   2. a requirement for maintenance of equipment where the general maintenance work is defined in the contract and, when the equipment failure/issue occurs, the specific maintenance task is authorized on an as and when requested basis;
   3. a requirement for an informatics technology specialist over a defined period, but the specific activities and deliverables cannot be identified in advance nor the timing or level of effort predicted.
3. An advantage of using contracts with TAs is the mitigation of contractual risks as a result of better-defined tasks, the establishment of a level of effort on a per task basis and more precise pricing for each specific task thereby ensuring better management of the contract.
4. When they are properly used, contracts with TAs provide a structured framework offering operational speed and flexibility to clients. Contracts with TAs will be successful provided that there is a clear understanding and agreement between PWGSC and the client as to their respective roles and responsibilities relating to the management of the contract including for authorizing and issuing TAs and task authorization management. The improper use of contracts with TAs can lead to major problems between the government and its suppliers, between PWGSC and its clients, and for the government in the eyes of the public.
5. For bid solicitations requiring bidders to propose a resource or resources, the named resource(s) and the required experience and qualifications requirements must be specified in the resulting contract with Task Authorizations.
6. For bid solicitations requiring bidders to propose a resource category or categories, the experience and qualifications requirements (mandatory and point rated) specified in the solicitation for the resource category or categories must also be specified in the contract. This must be the same as the evaluation criteria that was used at the bid evaluation stage.
    

4.0 Conditions of Use

1. As a condition of use of contracts with TAs, the PWGSC contracting officer will, as a minimum:
   1. ensure the contract with TAs is the appropriate method of supply for these required services in consultation with the client.
   2. decide whether the client will be allowed to authorize and issue TAs, and determine the financial limit of this authority. These decisions will be made in consultation with the client and the associated provisions will be detailed in the contract. All TAs in excess of the determined limit must be forwarded to PWGSC for authorization and issuance.
   3. consult with the client to reach an agreement on the roles and responsibilities of both organizations including the client's responsibilities for reporting.
   4. discuss, as required, the use of contracts with TAs with the client and in particular the administration of TAs.
   5. ensure that clients provide completed resource assessment worksheets demonstrating the proposed resource meets the requirements for the applicable category and level when requesting PWGSC authorization of TA forms. This information must be kept on the procurement file.
   6. ensure that clients provide proof that security requirements were verified when requesting PWGSC authorization of TA forms. Clients must provide a copy of the security clearance confirmation for each proposed resource to be included in the TA. This information must be kept on the procurement file.

5.0 Task Authorization Process and Administration

The client authorized to issue tasks to the contractor is responsible for issuing TAs in accordance with the TA process and administration of the TA detailed in the contract. If the task does not seem to be within the scope of the work, PWGSC must be consulted before any TA is contemplated.

The responsibilities of the client are detailed below:

1. TA Statement of Work (SOW) or task description
   1. ensure the task (or revised task) description of the work required (activities to be performed, deliverables to be submitted, completion dates for major activities or submission dates for deliverables or, as applicable, both) included in the TA is in accordance with the contract Statement of Work (SoW). This includes:
      1. ensuring that the text of the TA does not have the potential to create employer-employee relationships. See the Canada Revenue Agency publication RC 4110 - Employee or Self-Employed?; and
      2. Setting dates or timeframes for completing tasks taking into consideration the expiry date of the contract. A task must be completed on or before the expiry date of the contract; however, if a task cannot be completed by such date, a contract amendment to extend the contract period to the task completion date would have to be issued by PWGSC before the TA can be authorized and issued.
   2. provide to the contractor the task or description of the work, the schedule, the quantity, and the associated payment provisions, all in accordance with the conditions of the contract.
   3. facilitate knowledge transfer at the end of the work to reduce reliance on the same consultant or contractor.
   4. consult with the contractor and the contracting officer, as applicable.
2. Task Authorization Stage
   1. the response from the contractor must be reviewed by the client to ensure conformity with the conditions and payment provisions stipulated in the contract and its amendments, e.g. predetermined categories of resources and rates or pricing stipulated in the contract and its amendments are used by the contractor to quote on the level of effort for the specific task.
   2. Evaluation of resources: 
      1. if resources are named in the contract (i.e. specific individuals are identified for specific contract categories), replacement must be in accordance with the conditions of the contract or subsequent amendments and meet the criteria used in the selection of the individual. Where the contractor requests the replacement of a named resource, the client must evaluate the replacement resource against the experience and qualifications requirements specified in the contract. The evaluation must completely assess and ensure the replacement resource meets all qualifications as specified in the contract or its amendments. The replacement resource must meet all of the mandatory experience and qualifications requirements specified in the contract. For any point rated requirement, the replacement resource must score equal or higher points than what was assigned for the proposed named resource at the bid evaluation stage. The contracting authority must ensure that the evaluation results for the named replacement resource is kept on the procurement file.
      2. For contracts that do not contain named resources, the client must evaluate the proposed resource before a Task Authorization is authorized. The evaluation must completely assess and ensure the resource meets all qualifications for the applicable resource category as specified in the contract. The proposed resource must meet all of the mandatory experience and qualifications requirements specified in the contract. For any point rated requirements, the proposed resource must score equal or higher points than what was assigned for the resource category at the bid evaluation stage. The client must retain on file the evaluation results for the resource personnel.
   3. before authorizing a task, the client must ensure that:
      1. the task is within the client's authority limit; if the value of the task exceeds the client authorization limit contained in the contract and contract amendments, the TA must be forwarded to PWGSC for authorization.
      2. the task can be completed on or before the expiry date of the contract, and,
      3. the authorization of the task will not result in the cumulative value of all task authorizations to exceed the limitation of expenditure for all TAs.
      4. each proposed resource to be included in the TA meets the security requirements. The client must keep the security clearance confirmation for each proposed resource on the procurement file.
   4. the TA is finalized, including the total value of the TA task, in accordance with the conditions of the contract, and the client and/or PWGSC authorizes the TA by signing and dating the TA.
   5. the contractor signs and dates the TA authorized by the client and/or PWGSC and provides the signed original with their attachments and a copy as detailed in the contract.
3. Start of the work for a TA
   Work on a TA cannot commence until a contract allowing task authorizations has been awarded and the TA has been authorized and issued in accordance with the conditions of the contract. Contracts must never be awarded and TAs must never be authorized retroactively. The TA form must be authorized by the client and/or, if required, by PWGSC and signed by the contractor before the work starts.
4. Task Authorization Management
   1. before the contract is issued or the TA process implemented, the client must inform PWGSC when personnel other than the project or technical authority are involved in the TA process. The client must also confirm that appropriate training on the use of TAs has been provided to such personnel.
   2. the client must notify the PWGSC contracting authority when the client authority named in the contract is to be replaced so that the contract can be amended.
   3. the client must create and update a record of all tasks authorized under a contract and provide such a record to PWGSC as agreed between the two organizations.
   4. the client must monitor task performance, work delivered, conduct proper cost review and provide reports to the PWGSC contracting authority as agreed between both organizations.
   5. The client must have specific processes in place to ensure that billing rates and categories of resources or other payment provisions included in authorized and issued TAs are in accordance with the conditions of the contract.
   6. the client must provide complete and timely reporting of performance or arising issues under a TA to the PWGSC contracting authority.
   7. the client must ensure that the dollar value does not exceed the individual TA financial/dollar limit(s) specified in the contract with task authorizations or any limit placed on the cumulative value of TAs under the contract.
   8. before authorizing payment of an invoice in accordance with departmental procedures for an authorized and issued TA, the client must ensure that:
      1. the timesheets are in accordance with the contract, where applicable;
      2. the services have been performed, received and accepted; if applicable, an individual who has direct knowledge of the level of effort reported must verify the level of effort reported on the timesheet for the contractor resource;
      3. the invoice is consistent with the conditions and payment provisions stipulated in the contract or subsequent amendments and all required substantiating documentation is completed, approved and on file. See paragraph 7 below relative to separation of duties.

6.0 Revising a Task Authorization authorized by the client

1. The client may revise a TA that it originally authorized subject to the work being within the scope and value of the contract as well as within the client authority limit set in the contract. Any revision to the TA is subject to concurrence by the contractor. A TA revision, which will bring the TA value above the client TA limit, must be referred to the PWGSC contracting officer.
2. An authorized TA may be revised to either reduce an activity (or activities) or to cancel the task in its entirety. This must be done by issuing a revision to the TA. In situations when the contractor is in default or for the convenience of Canada, the termination provisions of the applicable general conditions will apply and the contract may be terminated either entirely or in part for default or for convenience. Such matters must be referred to the PWGSC Contracting Authority.

7.0 Separation of duties

The Treasury Board (TB) Directive on Delegation of Financial Authorities for Disbursements requires that the authority to enter into contract or amendment must be separate from the certification authority under section 34 of the Financial Administration Act. In Chapter 3 of the 2008 December Report of the Auditor General of Canada, the Office of the Auditor General raised issues relative to the application of separation of duties with respect to task authorizations and stated that combining procurement and certification functions under the responsibility of one individual was not in keeping with the TB Policy on Delegation of Authorities. Therefore, PWGSC recommends that the client ensure that the individual who signs the task authorization not also certify associated invoices. However, as specified in the above-mentioned TB directive, where the client's current processes in place or other circumstances do not allow such separation of duties, the client may implement alternate control measures. The client is responsible to ensure that its current processes or alternate control measures can withstand scrutiny under audit.

8.0 Corrective measures

The PWGSC Contracting Authority may take corrective measures such as reducing or revoking the client's authority to issue TAs where there are indications that the TA process is not working in accordance with the contract and the agreement between the client and PWGSC.

9.0 Tips

9.1 Method of Supply Planning

1. Do not request that PWGSC establish more labour categories and contracts than are necessary.
2. Do not add new contract categories to engage specific individuals.

9.2 Employer-Employee Relationships

1. Avoid using employment-type language in describing the work such as specifying the number of hours of work per day/week or the manner in which the work is to be conducted.
2. Avoid long-term assignments or a continuing relationship where a steady income stream from the department or agency is involved; state clearly the start and completion dates and ensure the contractor sets his or her hours of work.
3. Avoid controlling how the contractor carries out the work; work and results should only be overseen by the project/technical authority.
4. Avoid having the contractor work on government premises.

9.3 Administration of Task Authorizations

1. Do not split a requirement to get around the client authority limit stipulated in the contract.
2. Avoid task descriptions for TAs that could create a conflict of interest.
3. Ensure the price is fair and reasonable for the specific task and in accordance with the basis of payment in the contract.
4. Ensure there are sufficient funds.

Annex 3.4.2: Record of Agreement Template – for Public Works and Government Services Canada Clients

Effective date: 2024-04-19

Remarks to the PWGSC Contracting Authority:
(Delete the instructions before forwarding to the client the completed email and Record of Agreement).

1. A Record of Agreement should be used when it has been determined that the needs of the client would be best met through a contract with a Task Authorization (TA) process subject to any sector/regional operating procedures regarding its use. To that effect, the following is a TA Record of Agreement template that would formalize the administrative procedures between the client and Public Works and Government Services Canada.
2. The completed template may be sent as an email to the appropriate client and client acceptance should be received before submission of the Contract Plan and Approval (CPAA) or Procurement Plan approval.
3. An email template is provided below:

Subject: Requisition No. ___________, email TA Record of Agreement

Dear _________(Insert client name)

We considered that your requirement contained under the above subject requisition would best be met through a contract with a Task Authorization (TA) process. To that effect, the following is the TA Record of Agreement that would formalize the administrative procedures between our organizations for this requirement. A copy of the Guide to Preparing and Administering Task Authorizations for PWGSC's clients is attached.

In order to proceed with Public Works and Government Services Canada's (PWGSC) internal approval of this proposed procurement strategy, we require your department's confirmation that it agrees to the TA Record of Agreement described below, namely that it understands its roles, responsibilities and reporting requirement with respect to the proposed TA process as well as PWGSC's right to implement corrective actions if PWGSC considers that necessary.

Please confirm your understanding of the TA process described herein, by return e-mail, preferably by close of business ________(insert time and date), as a delay in responding could impact the planned solicitation release date.

Should you wish to discuss any of the items specified herein, please do not hesitate to contact me.

Yours truly,

______________(Insert name of the PWGSC Contracting Authority)

RECORD OF AGREEMENT BETWEEN

PUBLIC WORKS AND GOVERNMENT SERVICES CANADA

_______________(insert PWGSC Division name) and

__________________(Insert client name; for DND, insert DND'S division name, e.g.: D MAR P 3-5)

(hereinafter identified as the Authorized Client)

PERTAINING TO THE USE OF TASK AUTHORIZATIONS

UNDER CONTRACT NO ____________(Insert contract number)

1. Purpose
   The purpose of this document is to formalize a Record of Agreement between PWGSC and the Authorized Client regarding their respective roles and responsibilities when using the contract with task authorizations identified above (refer to the "Matrix of Roles and Responsibilities" attached hereto). It is imperative that the Authorized Client and the PWGSC contracting authority work closely together at all times during the period of the contract.
2. Period of the Agreement
   The conditions of this Record of Agreement will be in effect for the entire duration of the contract.
3. Task Authorization
   As specified in the contract (once awarded), the Authorized Client's designated authority may authorize individual task authorizations up to a limit of $______(insert amount), Goods and Services Tax (GST) or Harmonized Sales Tax (HST) extra, inclusive of any revisions to the authorized TAs. Any TA in excess of that limit or any revisions to the authorized TA that would increase the TA total value above that limit must be authorized by ________(insert, as applicable, "the Authorized Client designated authority and the PWGSC Contracting Authority" or "the PWGSC Contracting Authority") before issuance.
4. Contract Amendment Process
   The Authorized Client understands that it must not request the contractor to perform any work in excess of or outside the scope of the contract and it must not issue TAs where the cumulative value of all TAs would exceed the contract value. Any anticipated changes to the contract must be authorized, in writing, by the PWGSC contracting authority through the issuance of a contract amendment before any additional work or TA is authorized. At any time during the contract period, when there is a need to amend the contract, the Authorized Client must inform the PWGSC contracting authority accordingly, in writing (email), and provide him/her the following:
   1. a clear and accurate rationale for amending the contract; e.g. the reason why the work cannot be completed by the contract expiry date, why there is a shortfall of funds, etc.;
   2. the cumulative value of all TAs (GST or HST extra) issued to date;
   3. the total contract expenditures (GST or HST extra) to date;
   4. the estimated price breakdown for any additional work required;
   5. the consequences of not amending;
   6. justification for the required amendment versus initiating a new procurement; and
   7. the status of the replacement procurement in the case of on-going work.

   If PWGSC determines that the contract cannot be amended, the Authorized Client will be advised accordingly. If the contract can be amended, the Authorized Client will then forward to the PWGSC contracting authority a duly signed requisition amendment (PWGSC-TPSGC9200).

5. Contract Management – Corrective Measures
   If there are indications that the Authorized Client is not complying with the conditions of this agreement, the PWGSC contracting authority will discuss the matter with the Authorized Client's designated representative, the contractor or both and take any of the following corrective measures, deemed appropriate:
   1. change the detail and/or frequency of the information reporting;
   2. discuss with the Authorized Client's staff responsible for issuing TAs, or with the contractor if needed;
   3. reduce any dollar limit that might have been placed on individual TAs and/or suspend or cancel the Authorized Client's authority limit for TA authorization.

   Both parties agree to comply with the conditions of this Record of Agreement. Further, it is understood and agreed that this agreement may be amended from time to time, as necessary. Except for any change resulting from a corrective measure specified in 5 (a) to (c) above, amendments will not be implemented until an amended Record of Agreement has been formalized and accepted via email by both parties.

Matrix of Roles and Responsibilities in Contracts with Task Authorizations

Roles and Responsibilities

• P = primarily responsible
• S = supporting role
• - = not applicable

Task Authorization (TA) Process

Reporting Requirements 

Contract Management 

Annex 3.5: Procurement Review Committee Requirements and Approval Process

Effective date: 2020-05-04

This section has been removed as per Policy Notification 138 - Changes to the Procurement Review Policy.

For reference purposes, annex 3.5 is available in the Supply Manual Archive (accessible only on the Government of Canada network), Version 2019-3.

Exhibit A: Detail Document – Procurement Review Committee

Effective date: 2020-05-04

This section has been removed as per Policy Notification 138 - Changes to the Procurement Review Policy.

For reference purposes, Exhibit A is available in the Supply Manual Archive (accessible only on the Government of Canada network), Version 2019-3.

Annex 3.6: Canadian Content Policy: Rules of Origin determination

Effective date: 2020-07-01

* For general information on the Canadian Content Policy, please see 3.130 Canadian Content Policy.

1. The Canadian Rules of Origin for Goods (Chapter 4 of the Canada-United States-Mexico Agreement) and Canadian Customs Tariff Harmonized System (HS) are used to determine if imported components that go into the production of an item for resale to the government are sufficiently altered or converted in Canada to be considered "Canadian".
2. The Harmonized Commodity Description and Coding System is a structured classification system for goods that has been adopted by Canada and most of the world's trading nations, for customs purposes. The most recent Canadian Customs Tariff can be found on the Canada Border Services Agency website.
3. For the purposes of this determination, the reference to "territory of one or more of the parties" in the Rules of Origin must be replaced with "Canada."
4. Products containing imported components may be considered Canadian when they have undergone sufficient change in Canada in a manner that satisfies this amended definition. There are three basic steps to determine if any product that is partially or wholly constructed from imported components meets the Rules of Origin definition:
   1. Locate the heading number in the Harmonized System that best reflects the final product for sale.
   2. Find the appropriate heading number in the Harmonized System that identifies imported components used to construct the final product.
   3. Look up the section in the rules of origin that defines whether the conversion that took place in Canada allows the goods to be defined as Canadian.

Example 1: Determining whether a good is Canadian

1. A bidder proposes hats, which are manufactured in Canada that use imported calves leather.
2. Analysis of Canadian content:
   1. Look up "hats" in the index of the HS and find the type that matches the kinds of hats to be sold: Hats and other headgear, plaited or made by assembling strips of any material, whether or not lined or trimmed. The HS number is 6504.00. The first two numbers indicate the good is listed in Chapter 65.
   2. Look up "leather, bovine" in the index: it is located in Chapter 41.
   3. Finally, refer to the Rules of Origin which lists the conditions for transforming goods listed in the HS into Canadian goods (Chapter 65 is for Headgear and Parts Thereof). The second rule for Chapter 65 applies: A change to 65.04 through 65.07 from any heading outside that group. As the leather is classified outside 65.04 through 65.07, the final product (the hats) for sale are considered to be sufficiently transformed and therefore the hats are deemed to be Canadian for the purposes of this policy.

Example 2: Determining whether a mix of goods and services meets the 80 percent Rule of Origin

1. There is a PWGSC solicitation for:
   • 100 wooden office desks;
   • 100 electric space heaters with maintenance and repair included;
   • 100 telephone sets with maintenance and repair included, and
   • 100 metal swivel chairs.
2. A bidder has proposed:
   • unfinished wooden office desks which are imported into Canada and finished in Canada;
   • electric space heaters which were constructed using domestic labour/materials and imported parts. The maintenance/repair of the electric space heaters is being done by Canadian-based personnel;
   • telephone sets which were constructed using domestic labour/materials and some imported parts. The maintenance/repair of the telephones is being done by United States-based individuals;
   • metal swivel chairs which were constructed using domestic labour/materials and some imported parts.
3. Below are the prices for the goods and services offered in the bid:
   • 100 wooden office desks @ $150 each = $15,000
   • 100 electric space heaters @ $200 each = $20,000
   • Maintenance/Repair = $5,000
   • 100 telephone sets @ $50 each = $5,000
   • Maintenance/Repair = $1,000
   • 100 metal swivel chairs @ $25 each = $2,500
   • Total Bid Price= $48,500
4. Analysis of Canadian content:
   1. Wooden office desks:
      1. Unfinished wooden office desks (HS 9403.30) were imported and finished in Canada by painting them.
      2. The CUSMA rules of origin covering HS 9403.30 (wooden office desks) require a change from another chapter, or a change from subheading 9403.90 provided there is a regional value content of not less than 60 percent where the transaction value method is used or 50 percent where the net cost method is used.
      3. As a general rule of interpretation of the HS, finished and unfinished articles fall into the same heading or subheading where the unfinished article has the essential characteristics of the finished. As such, the final good (finished wooden office desks) falls in same the subheading (HS 9403.30) as the unfinished good. There was also no change from subheading 9403.90. Thus, this rule is not met.
      4. Therefore, the wooden office desks are not considered Canadian goods.
   2. Electric space heaters:
      1. Electric space heaters (HS 8516.29) were constructed using domestic labour/materials and imported parts (HS 8516.90).
      2. The CUSMA rules of origin covering HS 8516.29 (electric space heaters) require a change from any other subheading, including another subheading within that group. This rule is satisfied.
      3. Therefore, the electric space heaters are considered Canadian goods.
   3. Telephone sets:
      1. Telephone sets (HS 8517.11) were constructed using domestic labour/materials and some imported plastic tubes (HS 3917).
      2. To be Canadian, the CUSMA rules of origin covering HS 8517.11 (telephone sets) require a change to subheading 8517.11 from any other subheading. This rule is satisfied.
      3. Therefore, the telephone sets are considered Canadian goods.
   4. Metal swivel chairs:
      1. Metal swivel chairs (HS 9401.30.10) were constructed using domestic labour/materials and some imported parts (HS 9401.90).
      2. The CUSMA rules of origin covering HS 9401.30 (metal swivel chairs) require a change from any other chapter, or from subheading 9401.90, provided there is a regional value content of not less than 60 percent where the transaction value method is used or 50 percent where the net cost method is used.
      3. After calculations are done, the regional value content is found to be 37 percent using the transaction value method and to be 23 percent using the net cost method.
      4. Therefore, the metal swivel chairs are not considered Canadian goods.
   5. Maintenance/repair of telephones:
      The maintenance/repair of telephones is being done by U.S.-based individuals. Therefore, this service is not considered a Canadian service.
   6. Maintenance/repair of electric space heaters:
      The maintenance/repair of electric space heaters is being done by Canadian-based individuals. Therefore, this service is considered a Canadian service.
5. Calculation of Percent of Bid Price Considered Canadian
   1. Canadian goods and services
      • 100 electric space heaters = $20,000
      • 100 telephone sets = $5,000
      • Maintenance/Repair = $5,000
      • Total Canadian Goods and Services = $30,000
   2. Non-Canadian goods and services
      • 100 wooden office desks = $15,000
      • 100 metal swivel chairs = $2,500
      • Maintenance/Repair = $1,000
      • Total non-Canadian Goods and Services= $18,500
      • Total Bid Price= $48,500
   3. Percent of the Bid Price that is composed of Canadian goods and services = $30,000/$48,500 = 62%
6. Conclusion
   The supplier has not met the Canadian content requirement that "no less than 80 percent of the bid price consists of Canadian goods and services."

Annex 3.7: National Security Exception request letter: Template

Effective date: 2020-07-01

The information previously found in this Annex has been removed. For a template of the NSE request letter, contact the Specialized Services for Procurement Group via email at tpsgc.ersnceasns-nsensscc.pwgsc@tpsgc-pwgsc.gc.ca.

For reference purposes only, Annex 3.7 is available in the Supply Manual archive (accessible only on the Government of Canada network), Version 2020-1.

Annex 3.8: Comparison of different methods of supply

Effective date: 2022-12-01

The table below provides a comparison between the different methods of supply used when the precise nature, timing and/or quantity of the need cannot be set out in advance.

Comparison Table