Annexes for Chapter 8 - Contract management

Annex 8.1: Guidelines on procurement file organization and composition

Effective date: 2022-03-29

In order to clarify guidance with respect to procurement file organization, the information previously found in this Annex has been incorporated into Annex 1.4 Guidelines on paper file documentation for procurement and Annex 1.5 Guidelines on electronic file documentation for procurement.

For reference purposes only, Annex 8.1 is available in the Supply Manual archive (accessible only on the Government of Canada network), Version 2021-3.

Annex 8.2: Contract management early warning indicators

Effective date: 2010-01-11

The following factors, if present with a particular procurement, indicate there may be problems with the file. These factors should warrant further investigation and consideration and, in some cases, referral to more senior levels of authority.

1. Before Contract Award
   1. Requirement early warning indicators:
      1. requisition transferred several times;
      2. receipt of a requisition for a stand alone procurement when an existing procurement instrument (such as a standing offer) already exists;
      3. urgent requirements without adequate rationale for urgency;
      4. potential situation for employee/employer relationship;
      5. sole source or no substitute requirements without adequate rationale;
      6. contracts with former public servants outside of guidelines;
      7. unclear/vague description of work/requirement;
      8. indications that the "deal is already cut";
      9. complex or innovative requirements requiring the development of new methodology;
      10. work already under way and requiring confirmation and backdating;
      11. unrealistic time frames;
      12. lack of responsiveness from contractor during negotiations;
      13. indication of requirement splitting;
      14. weak financial capacity of contractor.
   2. Sensitive files early warning indicators:
      1. sensitive requirements that may be of interest to various interest or stakeholder groups;
      2. highly visible requirements, especially ones of interest to the media;
      3. contentious requirements that may result in aggressive competition.
2. After Contract Award
   1. Performance/management early warning indicators:
      1. unusual number and value of amendments without clear rationale;
      2. unexpected/unclear subcontracting activities;
      3. PWGSC excluded from meetings between contractor and client department;
      4. missed deadlines/reports/meetings;
      5. quality of performance/deliverables below expectations;
      6. excessive warranty claim;
      7. excessive maintenance services;
      8. invoices for out of scope items;
      9. frequent and unexplained turn over of contractor staff;
      10. request for amendments for out of scope work;
      11. disputes and difficulty with resolution of issues.
   2. Financial early warning indicators:
      1. contract cost not in line with forecasts;
      2. outstanding claims/invoices;
      3. poor and irregular billing/invoicing practices;
      4. reluctance to submit copies of claims/invoices;
      5. reluctance to supply supporting financial information;
      6. difficulty conducting audits;
      7. indication that business practices are deviating from the policies.

Annex 8.3: Termination for convenience process

Effective date: 2024-02-16

1. Overview
   1. Price Support Directorate (PSD), Procurement Business Management Sector (PBMS) was designated to provide termination settlement services including the processing of claims associated with goods and services contracts terminated for convenience by Canada. PSD was also designated to handle claims arising from United States and Canadian Commercial Corporation (U.S./CCC) contracts that are terminated for the convenience of the U.S. government. For terminations involving U.S./CCC contracts, the Executive Director, Strategic Policy Development and Integration Directorate (SPDID), Strategic Policy Sector (SPS), will ensure compliance with the certification and termination settlement functions that are required to conform with the U.S. Department of Defense and Department of National Defence Letter of Agreement (see U.S. Defense Federal Acquisition Regulation Supplements 225.870-6 and 249.7000). The Executive Director, SPDID will also be responsive to requests by the U.S. government for arranging for audits of U.S. government contracts or subcontracts placed directly with Canadian-based suppliers that are terminated for convenience.
   2. The contracting officer and the termination claims officer (see 8.135.10 Involvement of the Termination Claims Officer) are responsible for the following termination activities:
      • The contracting officer:
        • issues Stop Work Order and Notices of Termination; and
        • administrates the non-terminated portion of the contract.
      • The termination claims officer:
        • assesses the contractor's request for any upward adjustment of the contract price for the non-terminated portion of the contract;
        • requests claim from contractor and forwards claim forms;
        • ensures acceptability of claim by assisting contractor with preparation;
        • determines, defines and arranges audit, as required;
        • arranges for inventory verification and screening by client;
        • negotiates final settlement with contractor;
        • prepares Settlement and Release document;
        • disposes of surplus inventory;
        • forwards Settlement and Release document to contractor for acceptance;
        • obtains invoice and signed Settlement and Release document from contractor;
        • submits invoice through client department; and
        • distributes Settlement and Release document.
   3. Occasionally, the client will require a contract status report before making a decision to cancel the contract. In this event, the client will inform Public Works and Government Services Canada (PWGSC) of its intention to reduce or cancel a contract by issuing a "Notice of Intent to Cancel" either by telephone or in writing. The client will usually request all or part of the following contract status information before making a final decision to terminate:
      1. quantity of stores produced against the contract;
      2. quantity of stores in production;
      3. value of raw materials and/or components acquired by the contractor to carry out the specific contract;
      4. the position with respect to tooling and capital equipment, especially where the contractor had to tool-up to carry out the contract;
      5. status of subcontracts;
      6. the most economical point at which to effect termination; and
      7. the approximate amount of termination claims, if known.
   4. The contracting officer must immediately request the information from the contractor and closely follow up to ensure that it is received as soon as reasonably possible. When the information is received, the contracting officer will forward it, together with any recommendations, to the client. Normally, the client's first request will be to cancel all or a portion of a contract, in which case the contracting officer should immediately issue a Stop Work Order. A Stop Work Order is a safeguard to ensure a halt in the work and remove the possibility of further expense being generated by the contractor. To terminate the contract, a Stop Work Order must be followed by the issuance of a Notice of Termination for Convenience.
2. Stop Work Order – Notice of Termination
   On receiving the client's initial written instructions to cancel all or part of a contract for the convenience of Canada (see 8.135.5 Termination for convenience of Canada), the contracting officer should immediately issue a Stop Work Order to advise the contractor to "stop work" (see the Standard Acquisitions Clauses and Conditions [SACC] Manual clauses J0500C and J0502C.) The Notice of Termination (J0001C, J0002C, J0003C, J0006C) cannot be issued until the formal requisition amendment is received, and a legal opinion has been sought. The contracting officer should also contact and provide the termination claims officer with a copy of the Stop Work Order and the Notice of Termination.
3. No Claim is Involved
   When a contractor advises the contracting officer that a claim will not be submitted following the receipt of a Notice of Termination, the contracting officer must eliminate the funding for the terminated items. Since no claim is made, the termination claims officer is not involved in this process.
4. Client's Decision
   1. It is the client's responsibility to decide at what stage a full or partial termination should take place. Formal amendments to the requisition, confirming the decision to terminate, must be provided as quickly as possible.
   2. The contracting officer must not issue a Notice of Termination for Convenience until an amendment to the client's requisition has been received.
   3. The contracting officer should ensure that sufficient funds remain in the amended requisition to cover the contract value.
5. Notice of Termination
   1. When the requisition amendment is received, the contracting officer will prepare the Notice of Termination or Partial Termination by using the clauses provided in subsection 5-J, of the Standard Acquisition Clauses and Conditions (SACC) Manual, and on advice from Legal Services will send the Notice of Termination to the contractor.
   2. After the Notice of Termination or Partial Termination is issued, the contracting officer must immediately forward a copy of the Notice of Termination to the termination claims officer.
      In order to avoid further costs to Canada and hardship to the contractor, a Notice of Termination must be issued as quickly as possible to finalize the implications of a Stop Work Order.
6. Adjustment of Funds
   The funds in the contract must not be adjusted when the Notice of Termination is issued. The contract funds will be adjusted on the Settlement and Release document.
7. Adjustment to the Price of the Non-terminated Portion of the Contract
   Whenever a contractor requests an upward adjustment to the cost or unit price of the non-terminated portion of a contract, the resulting claim for adjustment should be referred to the termination claims officer for review, before reaching any agreement with the contractor, concerning such upward cost or price adjustment.
8. Termination File
   1. For non-complex, fully terminated contracts, the contracting officer should transfer the complete procurement file to the termination claims officer, if a claim is involved.
   2. For complex procurements or partial terminations, where the non-terminated portion of the contract is still active, the contracting officer will forward an electronic copy of each of the following documents to the termination claims officer as applicable: the contract, all amendments, specifications, pricing details, pertinent correspondence and any other information relevant to the termination.
9. Informing the Contractor
   1. If a claim is involved, the termination claims officer will forward the termination claim forms which includes the Procedures Guide – Processing Settlement Proposals Related to Contracts Terminated for Convenience to the contractor.
   2. The accompanying letter to the contractor should contain the following instructions:
      "In the event subcontractors are involved with this termination, please advise of the number of subcontractors who will require termination claim forms and their contact information. Please arrange to complete all sections of the claim in as much detail as possible. After signature by your executive authority, return the original and one (1) copy to this office.
      You are hereby requested to forward your completed claim as soon as reasonably possible. In order to assist you in meeting that date, we would be pleased to provide guidance and explanations necessary to ensure that your company takes proper action and that the correct information is included in the forms.
      Please note that all communications and documents with respect to your claim should be directed to: __________. (Insert appropriate name and address of the termination claims officer.)"
   3. After the termination claim forms are forwarded, the termination claims officer will contact the contractor to ensure that the forms have been received and that the necessary action is being taken on the contractor's part to submit a claim. If the contractor has any questions concerning the presentation of the claim, or the details of the termination settlement procedures, the contractor should contact the termination claims officer directly. When the contractor has completed the forms, the signed original is returned to the termination claims officer who will then become responsible for the resolution of the claim.
10. Audit of Claims
    1. Upon receipt of a claim, the termination claims officer will determine the need for an audit. If the termination claims officer concludes that an audit is required, the termination claims officer will prepare the terms of reference for the audit and arrange for its completion.
    2. When an audit is performed, the termination claims officer reviews the cost factors reported by the auditor, and reconciles the contractor's claim with the auditor's report. The cost implications of any inventory adjustments should be discussed with the auditor, as well as with the contractor.
11. Inventories
    1. If the claim from a Termination for Convenience involves inventory that is rendered surplus by the termination, the termination claims officer should send copies of the termination inventory schedules to the client in order to obtain instructions as to disposition, which will be either:
       1. Arranging for the verification and shipment of all, or any part, of the inventories to a recipient designated by the client. The costs associated with packaging, routing, shipping, etc., are a proper post termination charge to be added to the contractor's claim; or
       2. Arranging inventory verification (by the termination claims officer with the Inspection Authority of the client) so that the Settlement Offer may be adjusted to reflect any inventory discrepancies; or
       3. Arranging for the disposal of the residual inventory by a Crown Assets Distribution Centre (CADC). In this case, the termination claims officer should prepare a Sales Request (for surplus materiel and equipment) form on the Government of Canada Surplus Client Interface (GCSci) (accessible only on the Government of Canada network). (Note: Only approved government employees have access to the site.)
    2. Prior to Submitting the Sales Request (SR) the termination claims officer will obtain the certification of the client department and the Director of the PWGSC Contracting Directorate that the inventories are reasonable in relation to the requirements of the terminated portion of the relevant contract; that their use is not required for other existing PWGSC contracts, due to the nature of the goods; and consequently, that disposal is recommended. The termination claims officer will submit the online Sales Request on GCSci to CADC.
    3. Any proceeds realized from the sale of the surplus inventory are credited (less the CADC commission fee), back to the client, to the Consolidated Revenue Fund or to the revolving fund, as applicable.
12. Settlement Offer, Close-out and Dispute Resolution
    1. The termination claims officer is responsible for reviewing the audit report, if one was completed, and negotiating a settlement offer with the Contractor. This offer informs the contractor of the amount of the settlement the termination claims officer is prepared to recommend to the Executive Director, Strategic Policy Development and Integration Directorate (SPDID) for approval.
    2. Once the contractor accepts the proposed settlement offer, the termination claims officer will prepare the Settlement and Release form, and submit it to Legal Services for review, to the Executive Director, SPDID for approval and signature, and then to the contractor for acceptance and signature. When the contractor's written acceptance of the Settlement and Release document is received, along with the final invoice, they are placed on the Price Support Directorate (PSD) file, and a copy forwarded to the contracting officer for the procurement file. A copy is also sent to the client to issue payment.
    3. If the contractor rejects the proposed settlement, the termination claims officer will advise the contractor, in writing, of the Alternate Dispute Resolution (ADR) services available in the Business Dispute Management Program within the Departmental Oversight Branch. (see 8.140 Disputes)
13. Payment of the Settlement
    When a partial payment or final settlement payment related to a claim on a contract terminated or partially terminated for the convenience of Canada is approved and signed by the Executive Director, Strategic Policy Development and Integration Directorate (SPDID), the termination claims officer will place the original of the completed document on the Price Support Directorate (PSD) file, and make arrangements to implement the approved settlement payment.

Annex 8.4: Termination for default

Effective date: 2013-03-21

1. The decision to terminate a contract for default should be made only after all other possible solutions have been explored. In all cases, the advice of Legal Services must be obtained at an early stage, to ensure that any proposed action will not prejudice Canada's legal position and that the termination is legally enforceable.
2. Failure to take action may prejudice Canada's interests.
   If a contract is secured by surety bonds, termination of the contract may change the existing contractual relationship with the bonding company.
3. Canada has the right to terminate all or any part of the contract for default if:
   1. The contractor fails to make progress, so as to endanger performance of the contract.
      1. The contracting officer may provide the contractor in writing with a reasonable period of time, normally ten days, to rectify the situation. If this period must be longer, the contracting officer may require the contractor, within ten days, to show evidence of corrective action.
      2. If the contractor does not rectify the situation, the contracting officer may, subject to the limitations in the default clause, initiate action to terminate the contract for default.
   2. The contractor fails to perform any provision of the contract.
      If the contractor does not rectify such a defect within ten days of receipt of a notice from the contracting officer, the contracting officer may, within the limitations set forth in the default clause, initiate action to terminate the contract in whole or in part for default.
   3. The contractor fails to deliver the goods or perform the services within the time specified in the contract.
      1. In the absence of excusable delays, Canada has the right to terminate the contract immediately, regardless of how slight the delay may be. This includes the right to accept or reject goods shipped, but not yet delivered. In addition, if the contractor does make timely delivery, but delivers defective goods or improperly performs services, and is unable to take corrective action within the unexpired delivery schedule period, Canada also has the right to terminate for default.
      2. Whenever a contracting officer contemplates termination of a contract for failure to deliver on time, the contractor must be so advised, as soon as possible, after the default occurs. Failure to take such action may prejudice Canada's position.
      3. when there is reasonable assurance that delivery will be made, even though late, it may be desirable to discuss extension of the delivery time with client. If the delivery date is extended, negotiation for some kind of consideration may be appropriate. This constitutes a conditional amendment (see section 8.70.5 Amending contracts), which triggers the requirement for a VPCM Assessment.
      This situation would arise when delivery would be further delayed by terminating and placing the contract elsewhere.
   4. the contractor becomes bankrupt or insolvent.
      Upon receipt of a notice of bankruptcy or insolvency, the settlement procedure outlined in 8.155 Final payments should be followed.

Action to Recover Loss or Damage

1. After termination, the contracting officer will determine the actual amount or best estimate of loss or damage suffered by Canada, and the distribution of the damages to be recovered from the contractor.
   Estimates of loss or damage should include any amount in excess of the contract price, which Canada may be obliged to pay in procuring the goods or services elsewhere.
2. The contracting officer must refer claims to Legal Services when a contract is secured by a security deposit (government guaranteed bonds, bills of exchange, irrevocable standby letters of credit), or when Canada has a claim against a contractor that is related to a work package for which, the contractor has a claim against Canada.
3. In all other cases, the contracting officer will attempt to negotiate a settlement. When a satisfactory settlement cannot be reached, the claim will be referred to Legal Services for action.
4. When a contractor agrees with the proposed settlement, the recommendation to recover monies will be submitted to Cost and Profit Assurance Group (CAPG), or, in the case of a Canadian Commercial Corporation (CCC) contract, the Director, Finance and Resources Administration (FRA). Cost Audit Group or the Director, FRA, will issue an invoice to the contractor for the monetary recovery.
5. If payment is not received within 60 days of the date of issue of the invoice, then CPAG or the Director, FRA, will advise the contracting officer to take appropriate follow-up action with the contractor. When normal follow-up procedures have not been successful, the matter must be referred to Legal Services.
6. Claims must not be removed from departmental records until satisfied by payment or a properly authorized deletion action.

Contract Payment under Surety Bond

When a surety bond is being enforced, payments will be issued as follows:

1. Performance bond: Upon completion of the contract to the satisfaction of Canada, the bonding company may be paid all amounts to which the contractor would be entitled under the terms of the contract;
2. Payment bond: The bonding company must not be reimbursed for the payment of creditors from any funds held by Canada until the work is complete, and the surety company has fully discharged its obligations under the bond.

Annex 8.5: Refunds of excess profits earned on Public Works and Government Services Canada contracts

Effective date: 2022-12-01

1. All indications from any source of unreasonably high profits realized from any contract placed pursuant to the Defence Production Act, or from any contract other than competitive firm price awarded pursuant to the Department of Public Works and Government Services Act should be reviewed in consultation with the Director, Acquisition Program Integrity Secretariat (APIS).
2. Negotiated Refunds:
   1. Normally, the first step in negotiating a refund is for the contracting officer and APIS to review the evidence available, and decide whether the profits realized by the contractor can be recommended for acceptance or are in excess of what is considered to be fair and reasonable. In the event that the evidence is incomplete or inconclusive, consideration should be given as to whether the contractor will be approached for a statement of its position or whether a request will be forwarded to Audit Services Canada for additional verification. When all the evidence necessary is assembled, a final review will be made to determine what, if any, amount should be refunded, and the method of payment.
   2. In an attempt to ensure that suppliers are being treated consistently throughout Public Works and Government Services Canada (PWGSC), the Cost and Profit Assurance Group (CPAG) will distribute to the members of the Contract Audit Review Committee the proposed action plan of the contracting officer in respect to a contractor's excess profit, identified through audit. Any comments or concerns with the action plan should be communicated to CPAG within ten working days. CPAG will consolidate the input and forward it to the lead contracting authority for consideration.
   3. In some cases it will be in order to recover excess profits by deduction from current claims, or a part recovery may be affected through an assignment of income tax refunds. Ordinarily, however, the contractor will be expected to remit the full amount by cheque. If it appears that this action will create an unreasonable hardship, extended terms of payment may be considered.
   4. The agreed upon amount to be refunded and the terms of settlement will be set out in a letter to the contractor, approved by Legal Service, and signed by the responsible officer of the sector/region. Copies of this letter are to be sent to the Director, Acquisition Program Integrity Secretariat (APIS).
   5. After settlement is completed, it may be desirable to release the contractor from further obligation by detailing, in a formal agreement, the contract to which the settlement relates. Legal Services should draft this agreement.
   6. Cheques forwarded by the contractor should be made payable to the Receiver General and mailed to the contracting officer. The contracting officer will pass them to CPAG who will forward them to the Chief Financial Officer of the client.
   7. Reference should be made to section 10.70 Recovery and disposition of contract claims adjustments process.
3. Voluntary Refunds:
   1. Where a contracting officer receives notice from a contractor that they desire to return excess profits, or if a contractor voluntarily forwards a cheque in refund of such profits, the contracting officer should request a statement showing:
      1. a summary of the excess profits by contracts; and
      2. an explanation of the principal reasons, which accounts for the excess and how the amount was arrived at.
   2. Pending an appraisal of the information given by the contractor and of the particular circumstances of the case, any cheques received should be sent immediately to the Director, APIS, accompanied where possible, by a statement, showing the distribution of the refund over the contracts affected. The Director, APIS, will then forward the cheques to the Chief Financial Officer for the client.
   3. In deciding how extensive a review should be carried out in each case, the determining factors will be:
      1. the value of the contracts affected, and the total amount of the contracts let to the contractor;
      2. the explanations given by the contractor, as to the procedure followed in arriving at the amount of the refund;
      3. the capacity known to the contractor for assembly and interpretation of costs in accordance with Contract Cost Principles 1031-2, if applicable.
   4. If there is doubt as to the accuracy of the contractor's computations or if it appears that there may be other excess profits which have not been declared, then a full inquiry must be instituted;
   5. A final decision will be agreed upon by consultation between the sector/region concerned and the Director, APIS, and this conclusion will be communicated to the Chief Financial Officer of the appropriate client department.
4. Refunds from Subcontractors:
   Refunds from subcontractors should be handled in accordance with the above procedures. In addition, however, it will be necessary for PWGSC to keep the prime contractor informed of its negotiations with the subcontractor, and in some cases, it will be preferable to deal with the subcontractor through the prime contractor. If the refund results from a contractual provision in effect between the prime contractor and the subcontractor, then the refund should be effected by the prime contractor. If the refund arises from circumstances not envisaged in the subcontractor's contractual arrangements with the prime contractor, then the refund should be effected by PWGSC, and should not result in a windfall being realized by the prime contractor.
5. Assignment of Income Tax Refund:
   1. In the event that a settlement from the contractor must be financed partly from the proceeds of its income tax refund, the sector/region concerned will endeavor to obtain a voluntary assignment of the income tax refund in the following terms:

       

      "Receiver General of Canada

      Ottawa, Ontario

      (Company) ______________ of the City of _________ in the Province of ______________ does hereby authorize and direct that any amounts presently due or accruing due to it in the future from the Canada Revenue Agency, be applied in reduction of its debt to His Majesty the King in right of Canada in the amount of $ ___________ on account of ________".

   2. In the case of a corporation, the direction should be under the seal of the Corporation and the signature of duly authorized officers. The form, which should be a separate document and not embodied in a letter, should then be passed by the sector/region to the Director General, Finance, Corporate Services, for processing in accordance with normal government practice. Treasury Board authorization is not required.
   3. Whether the assignment is voluntary or pursuant to section 155 (Deduction and set-off) of the Financial Administration Act, the Finance Sector assumes the responsibility of notifying Canada Revenue Agency (CRA) of the assignment. The manner in which money is transferred from CRA to PWGSC, or to the Department of National Defence (in the case of refunds to its own votes) is a matter for decision by the Finance Sector. However, the transfer will be made either by means of a Receiver General cheque or an interdepartmental Journal Voucher. Under either method, the transfer advice will be passed to the sector/region concerned who will forward it to the Director General, Finance Sector.

Annex 8.6: Risk management approach to Vendor Performance Process Chart

Effective date: 2012-10-25

This document is published in Scalable Vector Graphics (SVG) format, which may not display on your browser. These alternative formats are available:

• Overview of the Process Chart - Text version
• Overview of the Process Chart (PDF 113.5 KB)

Click this image to view it in full screen.

Overview of the Process Chart - Text version

This flowchart shows the full mandatory steps of the Vendor Performance Corrective Measure Policy (VPCMP). The flowchart is divided into the four phases of the procurement process: Phase 1: Pre-Contractual, Phase 2: Contracting, Phase 3: Contract Administration, and Phase 4: Post Contract. The Pre-Contractual and Contracting phases incorporate the risk considerations for applying the VPCMP. The Contract Administration and the Post Contract phases are where the VPCMP process is applied. Each required step is indicated in the relevant phase of the procurement process. For example, it must be determined at the Pre-Contractual Phase if a sector/region program exists.

Risk considerations for applying VPCMP (Phases 1 and 2)

Phase 1: Pre-Contractual

In this phase, the impact of vendor performance issues on the procurement strategy must be determined by following these steps:

Step 1 - Assess the impact of performance issues that might arise, as part of procurement risk management and commodity research. For sole source contracts, access the Vendor Information Management (VIM) system to verify if a Vendor Performance Corrective Measure (VPCM) applies prior to negotiation of terms and conditions.

Step 2 - Decision: Does a sector/region program exist?
If yes, follow sector/region program process for evaluating bids. Stop reading the contents of the chart.
If no, proceed to Step 3 of Phase 1.

Step 3 - Decision: Assess whether a sector/region program is required.
If yes, develop a sector/region program using Annex 8.12 of the Supply Manual. Until the program is operational, the contracting officer is to follow the generic process. Proceed to Phase 2: Contracting (risk considerations for applying a VPCMP).
If no, proceed to Phase 2: Contracting (risk considerations for applying a VPCMP).

Phase 2: Contracting

This phase gives the right to reject bids at evaluation stage. The right to reject also applies to offer and arrangements. The process is described in following steps:

Step 1 - Include performance criteria for evaluating vendor performance over the life of contract.

Step 2 - Decision: Determine whether a VPCM in VIM applies to the vendor being considered, once bids have been received.
If yes, verify if terms of VPCM apply to vendor. If a VPCM is applicable, reject the bid and notify the vendor. Stop reading the contents of the chart.
If no, proceed to Step 3 of Phase 2.

Step 3 - Continue evaluation.

Step 4 - Re-verify in VPCM that a VPCM has not been applied prior to award of a contract.

Step 5 - Award contract if no VPCM has been applied. No call-up contracts can be issued to a vendor subject to a relevant VPCM. Proceed to Phase 3: Contract Administration (VPCMP process).

Application of the VPCMP process (Phases 3 and 4)

Phase 3: Contract Administration

Assessment of vendor performance must be done during the contract period. Other performance records are added when significant issues require a note as per paragraph 8.180.15.1 (h) of the Supply Manual. The process is described in the following steps:

Step 1 - Monitor and document poor vendor performance with client. See paragraph 8.180.15.1 (b) of the Supply Manual for information on required documentation.

Step 2 - Decision: Determine whether performance issues are corrected.
If yes, contract ends normally. Stop reading the contents of the chart.
If no, proceed to Step 3 of Phase 3.

Step 3 - Decision: Determine if there is an operational requirement to continue contract.
If yes, offer conditional amendment in lieu of a termination for default and proceed to Step 4 of Phase 3.
If no, terminate contact for default and skip to Step 5 of Phase 3.

Step 4 - Decision : Is conditional amendment accepted?
If yes, issue conditional amendment and proceed to Step 5 of Phase 3.
If no, terminate contract for default and proceed to Step 5 of Phase 3.

Step 5 - At the end of contract or at the expiry date of the standing offer, proceed to Phase 4: Post Contract (VPCMP process).

Phase 4: Post Contract

Phase leading to the application of a Vendor Performance Corrective Measure (VPCM). The process is described in the following steps:

Step 1 - Inform VPCM coordinator to add note to VIM and obtain authority to proceed with VPCM assessment process.

Step 2 - Complete mandatory assessment for a VPCM to mitigate risks.

Step 3 - Refer to Annex 8.6.1: Required procedure for applying a Vendor Performance Corrective Measure (VPCM) of the Supply Manual for information on required procedure for applying a VPCM. Performance information gained must be kept. It will be considered for future procurement processes in the first step of Phase 1: Pre-contractual.

Annex 8.6.1: Required procedure for applying a Vendor Performance Corrective Measure (VPCM)

Effective date: 2017-04-27

This document is published in Scalable Vector Graphics (SVG) format, which may not display on your browser. These alternative formats are available:

• Chart Overview - Text Version

Click this image to view it in full screen.

Chart Overview

This flowchart shows the complete sequence of steps involved once the Vendor Performance Corrective Measure assessment was completed by the Contracting Officer. Beginning with the first step, this chart identifies the responsibilities of the Contracting Officers based on possible scenarios. For example, it must be determined whether or not the director accepts the assessment results. Once the decision is made, the reader must refer to the next relevant step in the process. The following steps describe the process to follow.

Director review of VPCM assessment results

Step 1 - Present VPCM assessment results to the director.

Step 2 - Decision: Does the director accept the assessment results?
If yes, then proceed to step 3
If no, VPCM assessment must be re-evaluated, then return to step 1.

Step 3 - Director presents assessment results to the Director General/Regional Director General (DG/RDG).

Step 4 - Decision: Does the DG/RDG accept assessment results?
If yes, then proceed to step 5
If no, VPCM assessment must be re-evaluated, then return to step 1.

Step 5 - Decision: Is threshold to apply a VPCM reached?
If no, proceed to stream 1 – Non-application of a VPCM
If yes, proceed to stream 2 – Application of a VPCM

Stream 1 – Non-application of a VPCM

Step 1 - DG/RDG advises vendor of the assessment results (no VPCM), level of impact and no. of points that will be added to vendor contract history. Annex 8.8 provides a letter template.

Step 2 - Vendor has 15 business days to respond in writing. In addition the vendor may request a face to face meeting.

Step 3 - DG/RDG reviews vendor’s written response and any presentation material.

Step 4 - Vendor advised of final decision, category of impact and number of points that will be added to its contract history.

Step 5 - Contracting officer advises VPCM co-ordinator to update the note in VIM to indicate the category of impact (minor, medium or major) and number of points to add to the contract history of the vendor.

Stream 2 – Application of a VPCM

Step 1 - DG/RDG advises vendor of intent to apply a VPCM and level of impact. Annex 8.9 provides a letter template.

Step 2 - Vendor has 15 business days to respond in writing. In addition the vendor may request a face to face meeting.

Step 3 - DG/RDG reviews vendor’s written response and any presentation material.

Step 4 - DG/RDG informs the Acquisitions Branch DG/RDG Committee.

Step 5 - The VPCM co-ordinator sends documentation to the Acquisition Program – Policy Committee (AP-PC) line directors and seeks feedback regarding the proposed VPCM; the VPCM co-ordinator sends the results of the consultation to the Director General (DG), Policy, Risk, Integrity and Strategic Management (PRISM) Sector.

Step 6 - The DG PRISM submits the assessment results to the Assistant Deputy Minister, Acquisitions Branch (ADM/AB).

Step 7 - ADM reviews the assessment results.

Step 8 - Decision: Does the ADM apply a VPCM?
If yes, proceed to next step in this stream (Step 9 of Stream 2).
If no, skip to Step 4 of Stream 1.

Step 9 - ADM advises the vendor that a VPCM will be applied and specifies the type and extent of the VPCM. Annex 8.10 and Annex 8.11 provide letter templates.

Step 10 - The ADM Office advises the VPCM co-ordinator of the decision to apply a VPCM. The VPCM co-ordinator adds a note in VIM.

Annex 8.7: Principal elements of the Vendor Performance Corrective Measure Assessment

Effective date: 2015-12-23

1. Current Contract Impact Score
   This score refers to the impact of the poor performance issues over the entire period of the contract or over the entire period of the standing offer that resulted in a termination for default or conditional amendment. This score takes into account the relative importance of the requirements in the overall context. There are three categories of performance issues for consideration in the PWGSC 149-1 Assessment Form (Time of Delivery, Quality of Product, and Other), and the following grid applies:
   1. low impact = 1 to 3
   2. medium impact = 4 to 6
   3. high impact = 7 to 9
2. Conversion Score
   Where an impact score of 9 points has been given for at least one performance issue, this will have a Conversion Score equivalent to 40 points. This falls under the category of major impact from poor performance. Otherwise, the following conversion table will be used:

   Table 1 – Conversion for the Total Current Contract Impact Score

   This table shows how to determine the converted score from the Total Current Contract Impact Score. The column headers identify the variables for determining the number of points to allocate to the vendor for the current contract: Total Current Contracts Impact Score, Category of Total Current Contract Impact Score and Conversion Score. The Total Current Contracts Impact Score is used to establish the Category of Impact and the Conversion Score. For example, if the Total Current Contract Impact Score is 17 points, the category of impact will be major and the converted score will be 40 points.

   Total Current Contract Impact Score	Category of Total Current Contract Impact Score	Conversion Score
   Equal to or less than 9	Minor	10 points
   Greater than 9 but less than 15	Medium	20 points
   15 or more	Major	40 points

3. History Score

   Contracts with a termination for default or a conditional amendment and VPCMs are taken into account to calculate the Total History Score, as follows:

   1. 10 points for each case of VPCM
   2. 10 points for each contract case with a minor impact of poor performance
   3. 20 points for each contract case with a medium impact of poor performance
4. Total Impact Score and VPCM Consequences

   This score is calculated by adding the Conversion Score and the Total History Score. If the Total Impact Score is 40 or more, the consequences are as follows.

   Table 2 – VPCM consequences based on the frequency of cases

   This table shows the consequences of a Vendor Performance Corrective Measure (VPCM) based on the frequency of cases of the last six years. The column headings identify what determines the severity of a debarment: VPCM History, Consequence. The number of VPCM cases in the last six years is sufficient to determine the duration of a debarment. For example, if there is a previous VPCM case for the vendor, the consequence of a new VPCM will be an 18-month debarment or the imposition of conditions, if more appropriate.

   VPCM History	Consequence
   No case within last six years	Debarment of 6 months or, if more appropriate, conditions
   One case within last six years	Debarment of 18 months or, if more appropriate, conditions
   Two cases within last six years	Debarment of 36 months or, if more appropriate, conditions

   Note: Any excess points beyond the threshold (40 points) required for imposition of a VPCM (which are accumulated as a result of the Total Impact Score calculation) will not be carried over for purpose of future Total Impact Score calculations for future VPCMs.

5. Consistency in Assessments

   Given that every default situation is different, it is important to allow latitude to contracting officers and client departments in the assessment of their particular cases.

   The following guidance is provided to ensure consistency across PWGSC Acquisitions Program.

   On the assessment form, the term "Impact", combined with the words "High", "Medium" or "Low", are used to characterize the severity of impact of a default situation.

6. Guidance on Factors to Consider in Determining Impact

   In determining the severity of impact of a default situation, two factors relating to vendor performance must be considered: the consequences and the behaviour of the vendor as described below.

   • Factor 1: Consequences

     The determination of the consequences for government operations resulting from the default is the most important factor to take into consideration. In determining the consequences, Canada shall consider, but not be limited to, the following:

     1. endangerment/injury/death of human beings;
     2. diminishment in the quality and timeliness of providing services to the Canadian public;
     3. the complication of any possible success of future related government operations;
     4. wasting of public money/resources;
     5. destruction of property.
   • Factor 2: Behaviour of the Vendor

     The level of negligence of the vendor in creating the default situation and the efforts (degree of cooperativeness) demonstrated by the vendor in order to assist the government mitigate the consequences of the default.

7. Guidance on how to determine whether the default has a High, Medium or Low Impact as it relates to each performance issue (i.e. time of delivery, quality of product or service, other)
   1. High impact

      The vendor defaulted on a requirement that was essential to an important and urgent or ongoing government operation which resulted in the success of an important operation being compromised.

      Example: A vendor failed to deliver key military equipment for an ongoing in-theatre operation overseas, resulting in a diminishment of Canada’s military capability for this important international mission. The default situation increased the danger for military personnel and international partners and compromised the success of the mission. The vendor was made aware of the fact that they were in default and was uncooperative to help mitigate the damage caused.

   2. Medium impact

      The vendor defaulted on a requirement and the government department incurred significant consequences. This resulted in complicating government operations in the short or medium term.

      Example: A vendor did not provide acceptable routine maintenance services on equipment used by a specific government department which provides important but not critical services to the Canadian public. The vendor attempted to cooperate when the problem became evident but was unable to resolve it and had been clearly delinquent in failing to recognize and indicate in their bid that their abilities were limited.

      As a result of the inadequate maintenance work performed by the vendor, regular government operations were rendered partially unreliable. The consequences of the default were decreased efficacy and efficiency of government operations, and therefore diminished service to the Canadian public. This service was hindered for a period of many weeks until a new vendor capable of correcting the problem was found.

   3. Low impact

      The vendor defaulted on a low dollar value requirement which was neither urgent nor critical to ongoing government operations. This default stemmed from factors partially out of the vendor’s control.

      Example: A vendor failed to deliver supplies because their foreign supplier has suddenly stopped making the specific product contracted for. This material was intended for the stockroom supply shelves and did not have a critical application and could be obtained from other sources. The vendor had proactively communicated their inability to provide the supplies, provided a full explanation and were amenable to helping in whatever manner they could. The consequence was that the procurement officer had to repeat the procurement and supplies in the stockroom were a bit lower than usual.

Annex 8.8: Letter template where no Vendor Performance Corrective Measure will be applied at this time

Effective date: 2012-10-25

(Full or partial terminations for default and conditional amendments trigger the mandatory assessment process at the end of a contract or at the expiry date of a standing offer to determine whether a Vendor Performance Corrective Measure (VPCM) will be applied. If the threshold to apply a VPCM is not met, the Director General/Regional Director General (DG/RDG) informs the vendor that no VPCM is applied at that time. This template is a reminder of what the Vendor Performance Corrective Measure Policy (VPCMP) prescribes. Italicized, bold text in blue in the letter template below must be adapted to the specific situation.)

Heading of Public Works and Government Services Canada

REGISTERED MAIL AND COURIER

Date: XXXX

Name of the vendor
Address

Attention: XXXX

Subject:

Result of the Vendor Performance Corrective Measure (VPCM) Assessment
{insert Contract or Standing Offer number, title, and delete this instruction}

Dear Ms., Mr. {insert name here and delete this instruction}

As per the Vendor Performance Corrective Measure Policy (VPCMP), Public Works and Government Services Canada (PWGSC)/Acquisitions Branch (AB) carried out a VPCM Assessment at the end of the above referenced {insert "contract" or "standing offer" and delete this instruction}. This VPCM Assessment was triggered by the following:

• {List all terminations for default and conditional amendments of the above referenced contract or standing offer including the date of issuance and delete this instruction}

Based on the result of the assessment, this letter is to inform {insert name of the vendor here and delete this instruction} that:

• no VPCM will be applied at this time;
• {insert category of impact here and delete this instruction} and {insert the corresponding Conversion Score here and delete this instruction} will be recorded in the Vendor Information Management (VIM) system as the Current Contract(s) Impact Score;
• the Current Contract(s) Impact Score will become part of your history score;
• in the event that another assessment is triggered by a further termination for default or conditional amendment, Canada reserves the right to take the history score of all contracts with terminations for default and conditional amendments into consideration, while excluding the notes used as the basis for applying a previous VPCM.

As provided in the policy, {insert name of the vendor here and delete this instruction} may respond in writing regarding the VPCM Assessment. Such written response must be submitted to the undersigned within 15 business days following receipt of this letter. {Insert name of the vendor here and delete this instruction} may also include a request during this 15 business day period to present orally and, to this end, an appointment must be made with the undersigned. Please be advised that, if {insert name of the vendor here and delete this instruction} does not respond within the 15 business day period noted above, PWGSC/AB will proceed to record the Current Contract(s) Impact Score in VIM.

Yours truly,

Name of the DG/RDG
Name of the sector or region
Address
Phone number

Attached: Copy of the VPCM Assessment form

NB: You can view the Vendor Performance Corrective Measure Policy by going to: {insert the Internet address for the appropriate version of the VPCMP and delete this instruction}.

Annex 8.9: Letter template for notice of intent to apply a Vendor Performance Corrective Measure

Effective date: 2015-12-23

(Full or partial terminations for default and conditional amendments trigger the mandatory assessment process at the end of a contract or at the expiry date of a standing offer to determine whether a Vendor Performance Corrective Measure (VPCM) will be applied. If the threshold to apply a VPCM is met, the Director General/Regional Director General (DG/RDG) informs the vendor of the intent to apply a VPCM. This template is a reminder of what the Vendor Performance Corrective Measure Policy (VPCMP) prescribes. Italicized, bold text in blue in the letter template below must be adapted to the specific situation.)

Heading of Public Works and Government Services Canada

REGISTERED MAIL AND COURIER

Date: XXXX

Name of the vendor
Address

Attention: XXXXX

Subject:

Notice of intent to apply a Vendor Performance Corrective Measure
{insert Contract or Standing Offer number, title, here and delete this instruction}

Dear Ms., Mr. {insert name here and delete this instruction}

As per the Vendor Performance Corrective Measure Policy (VPCMP), Public Works and Government Services Canada (PWGSC)/Acquisitions Branch (AB) carried out a VPCM Assessment at the end of the above referenced {insert "contract" or "standing offer" and delete this instruction}. This VPCM Assessment was triggered by the following:

• {List all terminations for default and conditional amendments of the above referenced contract or standing offer including the date of issuance and delete this instruction}

Based on the result of the assessment, PWGSC/AB intends to apply a Vendor Performance Corrective Measure (VPCM) against {insert name of the vendor here and delete this instruction} pursuant to PWGSC’s VPCMP. This letter is to notify {insert name of the vendor here and delete this instruction} of the following:

• PWGSC/AB intends to apply the following VPCM:
  • a xx month debarment
  • the period of debarment will begin on the date the Letter of Decision to apply debarment as a VPCM is signed by the Assistant Deputy Minister, Acquisitions Branch
  • the scope (See 8.180.15.10(b)(ii)(B));
• or PWGSC/AB intends to apply the following VPCM:
  • conditions that have to be met
  • the scope (See 8.180.15.10(b)(ii)(B))
  • when and how the recommended VPCM will end
  • who will determine that conditions have been satisfied

In addition to the above, for commodities within the scope of the VPCM, {insert name of the vendor here and delete this instruction} is advised that the VPCM would extend to any other business arrangements involving {insert name of the vendor here and delete this instruction}, including subcontracting, partnership and joint venture.

As provided in the policy, {insert name of the vendor here and delete this instruction} may respond in writing to this notice of intent to apply a VPCM. Such written response must be submitted to the undersigned within 15 business days following receipt of this letter. {Insert name of the vendor here and delete this instruction} may also include a request during this 15 business day period to present orally and, to this end, an appointment must be made with the undersigned. Please be advised that, if {insert name of the vendor here and delete this instruction} does not respond within the 15 business day period noted above, PWGSC/AB will proceed to record the Current Contract(s) Impact Score in VIM and continue the process to apply the VPCM described above.

Yours truly,

Name of the DG/RDG
Name of the sector or region
Address
Phone number

Attached: Copy of the VPCM Assessment form

NB: You can view the Vendor Performance Corrective Measure Policy by going to: {insert the Internet address for the appropriate version of the VPCMP and delete this instruction}.

Annex 8.10: Letter Template for Decision to Apply Conditions as a Vendor Performance Corrective Measure

Effective date: 2012-10-25

(Full or partial terminations for default and conditional amendments trigger the mandatory assessment process at the end of a contract or at the expiry date of a standing offer to determine whether a Vendor Performance Corrective Measure (VPCM) will be applied. If, as the result of a VPCM Assessment, a decision is made for applying conditions as a VPCM, the Assistant Deputy Minister, Acquisitions Branch (ADM/AB) informs the vendor of the decision. This template is a reminder of what the Vendor Performance Corrective Measure Policy (VPCMP) prescribes. Italicized, bold text in blue in the letter template below must be adapted to the specific situation.)

Heading of Public Works and Government Services Canada

REGISTERED MAIL AND COURIER

Date: XXXXX

Name of the vendor
Address

Attention: XXXXX

Subject: Decision to apply a Vendor Performance Corrective Measure

Dear Ms., Mr. {insert name here and delete this instruction}

As set out in the notice of intent to apply a Vendor Performance Corrective Measure (VPCM) letter dated XXXX, Public Works and Government Services Canada (PWGSC)/Acquisitions Branch (AB) has decided to apply against {insert name of the vendor here and delete this instruction} the following conditions as a VPCM pursuant to the Vendor Performance Corrective Measure Policy:

{Insert the following here and delete this instruction}

• the conditions that have to be met
• the effective date
• the scope (See 8.180.15.10(b)(ii)(B))
• when and how the recommended VPCM will end
• who will determine that conditions have been satisfied

{Insert name of the vendor here and delete this instruction} must supply all information and documentation required by PWGSC/AB in order for it to assess if {insert name of the vendor here and delete this instruction} has met the conditions. Until such time that PWGSC is in a position to confirm that the conditions have been met, the VPCM will apply.

In addition to the above, for commodities within the scope of the VPCM, {insert name of the vendor here and delete this instruction} is advised that the VPCM would extend to any other business arrangements involving {insert name of the vendor here and delete this instruction}, including subcontracting, partnership and joint venture.

While PWGSC regrets any disruption to your business, Canada’s paramount concern must be the safeguarding of public monies. Should you require additional information, please contact {insert name of the Director General/Regional Director General (DG/RDG) and delete this instruction}, {insert title (Director General or Regional Director General) and delete this instruction} of {insert name of the sector or region here and delete this instruction} at {insert phone number of the DG/RDG here and delete this instruction}.

Yours truly,

Assistant Deputy Minister
Acquisitions Branch

CC: {Insert name of the DG/RDG and delete this instruction}

NB: You can view the Vendor Performance Corrective Measure Policy by going to: {insert the Internet address for the appropriate version of the VPCMP and delete this instruction}.

Annex 8.11: Letter template for decision to apply debarment as a Vendor Performance Corrective Measure

Effective date: 2015-12-23

(Full or partial terminations for default and conditional amendments trigger the mandatory assessment process at the end of a contract or at the expiry date of a standing offer to determine whether a Vendor Performance Corrective Measure (VPCM) will be applied. If, as the result of a VPCM Assessment, a decision is made for applying a debarment as a VPCM, the Assistant Deputy Minister, Acquisitions Branch (ADM/AB) informs the vendor of the decision. This template is a reminder of what the Vendor Performance Corrective Measure Policy (VPCMP) prescribes. Italicized, bold text in blue in the letter template below must be adapted to the specific situation.)

Heading of Public Works and Government Services Canada

REGISTERED MAIL AND COURIER

Date: XXXXX

Name of the vendor
Address

Attention: XXXXX

Subject: Decision to apply a Vendor Performance Corrective Measure

Dear Ms., Mr. {insert name here and delete this instruction}

As set out in the notice of intent to apply a Vendor Performance Corrective Measure (VPCM) letter dated XXXX, Public Works and Government Services Canada (PWGSC)/Acquisitions Branch (AB) has decided to apply against {insert name of the vendor here and delete this instruction} the following debarment as a VPCM pursuant to the Vendor Performance Corrective Measure Policy:

{Insert the following here and delete this instruction}

• a xx month debarment commencing on the date of signature of this letter
• the scope (See 8.180.15.10 (b)(ii)(B))

In addition to the above, for commodities within the scope of the VPCM, {insert name of the vendor here and delete this instruction} is advised that the Vendor Performance Corrective Measure would extend to any other business arrangements involving {insert name of the vendor here and delete this instruction}, including subcontracting, partnership and joint venture.

While PWGSC regrets any disruption to your business, Canada’s paramount concern must be the safeguarding of public monies. Should you require additional information, please contact {insert name of the Director General/Regional Director General (DG/RDG) and delete this instruction}, {insert title "Director General" or "Regional Director General") and delete this instruction} of {insert name of the sector or region here and delete this instruction} at {insert phone number of the DG/RDG here and delete this instruction}.

Yours truly,

Assistant Deputy Minister
Acquisitions Branch

CC: {Insert name of the DG/RDG and delete this instruction}

NB: You can view the Vendor Performance Corrective Measure Policy by going to:{insert the Internet address for the appropriate version of the VPCMP and delete this instruction}.

Annex 8.12: Framework for developing a sector/region Vendor Performance Program

Effective date: 2011-06-29

Customized past performance programs should address the following as appropriate and applicable to the circumstances:

1. Scope: Under this section the sectors/regions will define the scope of each customized past performance program as it pertains to the commodity or commodities, type of procurement, dollar thresholds and contractual performance risk. This will also identify if the program is incorporated into any strategic procurement initiatives.
2. How the Customized Program Works: This section will describe how the customized program works. The following are to be addressed when developing a program:
   1. Engagement with relevant industry associations and/or vendors/potential vendors
      1. Describe how industry associations and/or vendors/potential vendors will be engaged in the process of developing the customized program.
      2. Describe how the terms of the program will be communicated to vendors/potential vendors.
   2. Performance criteria
      1. Provide a clear definition of performance criteria. Criteria must be objective, measurable and relevant to the commodity or commodity groupings.
      2. Describe the methodology and process for evaluating performance including level of monitoring, client’s responsibility. The methodology must be relevant to the commodity or commodities.
   3. Consequences from past performance
      1. Define what will trigger an action for consequences.
      2. Describe the consequences on opportunities to bid or obtain future contracts including its scope of application, time periods, etc. Justify the nature, severity and relevance of the consequences based on the risk assessment for the program.
   4. Approval level for application of consequences - Establish the level of authority for such approval.
   5. Notification process
      1. Describe how and when vendors will be notified of consequences pursuant to the relevant customized program. This is conditional on having a notification process for each case of poor performance.
      2. The notification will describe the consequences and the extent of their scope in detail.
   6. Recourse mechanism - Establish a mechanism so that vendors have the opportunity to dispute the grounds for ensuing consequences.
   7. Accountability - Outline the roles and responsibilities for the stakeholders in the program.
   8. Documentation revisions - All relevant and necessary documentation, such as solicitation and contract documents, must be revised to set out the application of the customized program.
   9. Tools, forms and systems – List all tools, forms and systems developed for the needs of the program.

Annex 8.13: Letter templates for integrity

Effective date: 2024-05-31

1. Template letter of rejection of offer or arrangement for integrity reasons

This template letter is provided for instances where the contracting officer has to advise the offeror that its offer has been found non-responsive due to their status as ineligible or suspended pursuant to the Ineligibility and Suspension Policy.

Note: Contracting officers will have to tailor the letter to their situation.

Public Works and Government Services Canada

Date: {insert date}

Attention: {insert contact name}

{insert offeror's name and address}

Subject: Solicitation Number {insert solicitation number}

Dear Ms./Mr.{insert name}

We regret to inform you that your {insert offer or arrangement, as appropriate} has been declared non-responsive because you have previously been declared ineligible to enter, or suspended from entering, into a contract or real property agreement with Canada, pursuant to the Ineligibility and Suspension Policy.

If you have any questions, please direct them to Office of Supplier Integrity and Compliance by email at pwgsc.o.integrity-tpsgc.o.integrite@pwgsc-tpsgc.gc.ca or by mail at:

Office of Supplier Integrity and Compliance 

Departmental Oversight Branch

Public Works and Government Services Canada

11 Laurier Street

Place du Portage 

Phase III, Tower A

Gatineau, Quebec Canada K1A 0S5

{Insert Contracting Officer's name}

Contracting Authority, Public Works and Government Services Canada

{Insert contact details}

2. Template letter for addition of clauses to an existing contract

This letter is to be used when adding or revising the Ineligibility and Suspension Policy Clauses in an existing contract, when a significant contract amendment is to be done such as an increase to the contract value (such as exercising an option), to extend the contract period, or modify the requirement.

The contractor, and its affiliates, may be requested, at any time, to provide additional information if required by the Registrar of ineligibility and suspension to perform a more thorough verification.

Note: Contracting officers will have to tailor the letter to their situation and include the most recent version of the Ineligibility and Suspension Policy Clauses as an annex.

Public Works and Government Services Canada

Date: {insert date}

Attention: {insert contact name}

{insert contractor name and address}

Subject: Contract Number {insert contract number}

Amendment Number {insert amendment number}

Dear Ms./Mr.{insert name}

You are receiving this letter as a result of the Government of Canada's revisions to its Ineligibility and Suspension Policy (the "Policy") administered by the Office of Supplier Integrity and Compliance. The Office has introduced measures to further strengthen the integrity of procurement and real property transactions, including new triggers that can lead to suspension and ineligibility; expanded consideration of business ethics and corporate social responsibility as grounds for suspension or ineligibility, and greater flexibility to respond in a manner that is commensurate with the identified risk.

Moving forward, Public Works and Government Services Canada (PWGSC) will apply the updated Ineligibility and Suspension Clauses, referenced in the Annexes to this letter, to all solicitations and contracts.

In accordance with the requirements of the updated Policy, PWGSC is requesting your consent to a revision to the above referenced contract to comply with these new measures and is requesting that you agree that the Ineligibility and Suspension Policy Clauses form part of the above referenced contract.

If you agree, please return to my attention a signed copy of this letter no later than {insert month, day, year}, 5 p.m. Eastern Standard Time. In circumstances where a record suspension (criminal pardon) has been obtained, or capacities restored by the Governor in Council please provide us with a certified copy of confirming documentation from an official source within this timeframe.

Agreement

I, ___________________________________ {Contractor's Name} (herein referred to as the "Contractor" by its Authorized Signatory(ies)) hereby certify to the statements referenced in Annex A to this letter as well as agree to the afore-mentioned modifications to the general conditions to incorporate the revised Ineligibility and Suspension Policy Clauses (referenced in Annex B to this letter) to the above referenced contract.

Signature:__________________________________________

Date: ________________________________________

Print Name: ________________________________________

Title: ______________________________________________

We are looking forward to hearing from you. If you have any questions, please do not hesitate to contact me.

Regards,

{Insert Contracting Authority’s name}

Contracting Authority, PWGSC

{Insert contact details}

3. Template letter for assignment of contracts or when using a surety or completing contractor

This letter is to be used for the assignment of a contract (see section 8.90 Assignment of contracts), or when a surety or completing contractor is responsible for the completion of the contract work (see section 8.135.30 Financial security issues related to terminations).

This letter is also to be used when the contract proposed for assignment does not include the most recent Ineligibility and Suspension Policy Clauses, for adding or revising the Ineligibility and Suspension Policy Clauses. 

The assignee, surety or completing contractor, may be requested, at any time, to provide additional information if required by the Registrar of ineligibility and suspension to perform a more thorough verification.

Note: Contracting officers will have to tailor the letter to their situation and include the most recent Ineligibility and Suspension Policy Clauses as an annex to their letter.

Public Works and Government Services Canada
Date: {insert date}
Attention: {insert contact name}
{insert proposed assignee, surety or completing contractor name and address, as applicable}
Subject: Contract Number {insert contract number}
Amendment Number {insert amendment number, as applicable}

Dear Ms./Mr.{insert name}

You are receiving this letter as the {proposed assignee, surety or completing contractor, as appropriate} that will complete the contract work under the above referenced contract between the contractor and the Government of Canada. 

{for contracts that include the most recent Ineligibility and Suspension Policy Clauses, and for proposed assignees, sureties and completing contractors} 

As this contract includes the Ineligibility and Suspension Policy Clauses, you are required to be compliant with the Ineligibility and Suspension Policy (the “Policy”) which can be found on Public Works and Government Services Canada’s (PWGSC) website at https://www.canada.ca/en/public-services-procurement/services/standards-oversight/supplier-integrity-compliance/ineligibility-suspension-policy.html.

{for contracts that do not include the most recent Ineligibility and Suspension Policy Clauses, and for proposed assignees only}

The Government of Canada launched updates to the Ineligibility and Suspension Policy (the “Policy”), which is administered by the Office of Supplier Integrity and Compliance. The Office introduced new measures to further strengthen the integrity of procurement and real property transactions, enabling Public Works and Government Services Canada (PWGSC) to identify offerors and contractors of concern, take appropriate action to mitigate the risk they pose, and promote ethical business practices in the marketplace.

Moving forward, PWGSC will apply the updated Ineligibility and Suspension Policy Clauses, referenced in the Annexes to this letter, to all solicitations and contracts.

In accordance with the requirements of the updated Policy, PWGSC is requesting your consent to a revision to the above referenced contract to comply with these new measures and is requesting that you agree that the Ineligibility and Suspension Policy Clauses form part of the above referenced contract.

Pursuant to the Ineligibility and Suspension Policy Clauses, you are required to be compliant with the Ineligibility and Suspension Policy and all related Directives. The requirement for proposed assignee’s is detailed in the Directive on the application of the Ineligibility and Suspension Policy to replacement entities and completing contractors, which can be found on PWGSC’s website at http://www.tpsgc-pwgsc.gc.ca/ci-if/ci-if-eng.html.

{for all} 

Further to the Policy, you must submit the information required under section 13 of Ineligibility and Suspension Policy and you must also certify to the Ineligibility and Suspension Policy Clauses included under Annex A of this letter.

The following information must be submitted to the contracting authority when responding to a procurement, applying for a standing offer or supply arrangement and, to the extent not included as part of a procurement, standing offer or supply arrangement process, before entering into a contract or other instrument:

• For a sole proprietor, the name of the owner
• For a private corporation, the names of all directors and the names of all individuals or entities that hold 5% or more of ownership 
• For a public corporation, the names of all directors
• For a non-profit, the names of all directors
• For a general partnership, the names of all of the partners
• For limited partnerships (LP) and limited liability partnerships (LLP): the names of all the general partners, in addition: 
  • if the general partner is a public or non-profit corporation, the names of all directors
  • 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 
• For a trust: The names of the trustees:
  • if the trustee is a public or non-profit corporation, the names of all directors
  • 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 

Please return to my attention a signed copy of this letter no later than {insert month, day, year}, 5 p.m. Eastern Standard Time. In circumstances where a record suspension (criminal pardon) has been obtained, or capacities restored by the Governor in Council please provide us with a certified copy of confirming documentation from an official source within this timeframe.

Agreement

I, ___________________________________ {proposed assignee’s, surety’s or completing contractor’s name} (herein referred to as the "Contractor" by its Authorized Signatory(ies)) hereby certify to the statements referenced in Annex A to this letter. {for contracts that do not include the most recent Ineligibility and Suspension Policy Clauses, and for proposed assignees only} I also agree to the afore-mentioned modifications to the general conditions to incorporate the new Ineligibility and Suspension Policy Clauses (referenced in Annex B to this letter) to the above referenced contract.

Signature:__________________________________________

Date: ________________________________________

Print Name: ________________________________________

Title: ______________________________________________

We are looking forward to hearing from you. If you have any questions, please do not hesitate to contact me.

Regards,

{Insert Contracting Authority’s name}

Contracting Authority, PWGSC

{Insert contact details}