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Understanding the Contract Modernization Initiative

The Contract Modernization Initiative (CMI) was developed to modernize and simplify the Government of Canada’s contractual documents, to make them easier to read and understand for everyone. Learn about the CMI and what you can expect from it as a supplier or member of the public. 


What can suppliers expect?

The CMI is focused on improving contractual documents by simplifying content and changing the presentation of information. An objective of the CMI is to present contractual documents in a more consistent and transparent way.

Key characteristics of modernized contractual documents

Going forward, information in contractual documents will be uniformly presented using the same basic structure and characteristics. These changes have been made to give contractual documents a consistent look and feel and to make it easier for you to quickly find information you need.

New contractual document structure

Contractual documents were restructured so that information follows the logical flow of the acquisitions process and so you can quickly identify key business terms like offers, term, delivery date and delivery points.

Example of a first section in a new contractual document

1. Solicitation of Offers.
1.1. Introduction. Canada requests offers from Offerors to meet its requirements. For the convenience of Offerors, a brief description is set out below with detailed requirements in subsequent sections of this solicitation of offers. If interested and able to meet these requirements, Canada appreciates and welcomes an offer.
1.2. Offers. Canada is seeking offers from Offerors to provide office chairs to Public Services and Procurement Canada.
1.3. Term. The period of the Contract is from date of Contract to January 1, 2025, inclusive.
1.4. Delivery Date. All the deliverables must be received on or before January 1, 2025.
1.5. Delivery Points. Delivery of the requirement will be made to delivery point(s) specified at Annex Statement of Requirement of the contract.

Incorporates all contract terms into the agreement

Clauses are now incorporated in full text to make contractual documents more transparent.

For example, Exchange Rate Fluctuation would have been inserted into a document as Standard Acquisition Clauses and Conditions (SACC) Manual reference code (C3011T). Now the code has been removed and replaced with the full text description.

Example of a full text clause in a new contractual document

1.6. Exchange Rate Fluctuation. Canada is not offering exchange rate fluctuation risk mitigation for this solicitation of offer. Canada will declare any offer non-compliant if there is any indication that offer is conditional on exchange rate fluctuation protection.

Simplifies and uses plain language clauses

To help each party understand their roles and responsibilities, clause language has been redrafted to focus on simplification, using plain language and creating more white space.

Before plain language

Copyright (partial clause)

At the request of the Contracting Authority, the Contractor must provide to Canada, at the completion of the Work or at such other time as the Contracting Authority may require, a written permanent waiver of moral rights as defined in the Copyright Act, R.S., 1985, c. C-42, in a form acceptable to the Contracting Authority, from every author that contributed to the Work. If the Contractor is an author, the Contractor permanently waives the Contractor’s moral rights.

After plain language

Copyright (partial clause)

Waiver of Moral Rights. At the Contracting Authority’s request, the Contractor must provide Canada with a written permanent waiver of moral rights as defined in the Copyright Act, in a form acceptable to the Contracting Authority, from every author that contributed to the Work. If the Contractor is an author, the Contractor permanently waives the Contractor's moral rights.

Consolidates SACC Manual terminology

Original SACC Manual terminology has been consolidated across Request for Proposal (RFP), standing offer and supply arrangement documents by using unified terms to make them more consistent and concise. See the table below for examples of these changes.

New common terms for SACC Manual terminology

Original SACC Manual terminology New common term
bid, offer, arrangement offer
bidder, offeror, supplier offeror
solicitation, bid solicitation solicitation of offers

Groups contractual content by topic

All related terms are grouped together to help you understand the terms of the contract. For example, all invoicing and payment terms are grouped together and definitions are now located in the document annexes.

Example of related terms that are grouped together in a new contractual document

 1. Payments.

  1.1  Invoices.

  1. Invoice Submission. The Contractor must submit invoices for each delivery in accordance with the Contract. Each invoice must indicate whether it covers partial or final delivery.
  2. Invoice Details. Invoices must show:
    1. the date, the name and address of the client department, item or reference numbers, deliverable or description of the Work, Contract ID, Client Reference Number, Business Number, and financial code(s);
    2. details of expenditures (such as item, quantity, unit of issue, unit price, fixed time labour rates and level of effort, subcontracts, as applicable) in accordance with the Basis of Payment, exclusive of Applicable Taxes;
    3. deduction for holdback, if applicable;
    4. the extension of the totals, if applicable;
    5. if applicable, the method of delivery together with date, case numbers and part or reference numbers, shipment charges and any other additional charges; and
    6. Applicable Taxes as a separate item along with corresponding registration numbers from the tax authorities. The Contractor must identify on all invoices all items that are zero-rated, exempt or to which Applicable Taxes do not apply.
  3. Payment of Taxes. Canada will pay Applicable Taxes. It is the sole responsibility of the Contractor to charge Applicable Taxes at the correct rate. The Contractor must pay Applicable Taxes, ancillary taxes, and any commodity tax, on taxable goods or services used or consumed in the performance of the Contract (in accordance with applicable legislation), including for material incorporated into real property.
  4. Exemptions. The Contractor is not entitled to use Canada’s exemptions from any tax, such as provincial sales taxes, unless otherwise specified by law.
  5. Withholding for Non-Residents. Canada will withhold 15 percent of the amount to pay the Contractor in respect of services provided in Canada if the Contractor is not a resident of Canada unless the Contractor obtains a valid waiver from the Canada Revenue Agency.

 1.2  Invoicing Instructions.

  1. Invoice Submission. The Contractor cannot submit any invoices until all Work identified in the invoice is completed.
  2. Invoice Support. The Contractor must support each invoice with:
    1. a copy of time sheets to support the time claimed;
    2. a copy of the release document and any other required documents;
    3. a copy of the invoices, receipts, and vouchers for all direct expenses, and all travel and living expenses; and
    4. a copy of the monthly progress report.
  3. Invoice Distribution. The Contractor must forward:
    1. the invoice to the address shown on page 1 of the Contract for certification and payment.

1.3  Payment Period. Canada will pay the Contractor’s undisputed invoice amount within 30 days after receipt of invoice in acceptable form and content. In the event an invoice is not of an acceptable form and content, Canada will notify the Contractor within 15 days of receipt and the 30 day payment period will begin on receipt of a conforming invoice.

How contract modernization applies to new and existing contracts

The new contract modernization model only applies to newly executed contracts, and previously executed contracts will not change.

In support of advancing this important priority, the new model is Public Services and Procurement Canada's default approach to building contractual documents as of June 2024. We anticipate that other departments and agencies will gradually begin using the new model in the future. 

As valued partners in our supply chain, it is important to keep suppliers informed and engaged in Canada’s efforts to improve its procurement processes and enhance mutual collaboration. 

Please note that the SACC Manual has been archived and migrated to CanadaBuys.

Sample contractual documents

Consult a list of modernized contractual document samples for different methods of supply and complexity level.

For more information

For questions about the contract modernization initiative, contact: SPAC.PAEngagementdesclients-APClientEngagement.PSPC@tpsgc-pwgsc.gc.ca

Useful links

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