1. Chapter 1 - Public Procurement

The Manual generally follows the sequence of a typical procurement process. The structure is as follows:

1. Chapter 1, Public Procurement, provides an overview of the context and the legal framework relating to public procurement for the acquisition of goods or services, including construction.
2. Chapter 2, Defining the Requirement and Requisition Receipt, is about defining the requirement for the bid solicitation. While this is often the responsibility of the client department, PWGSC involvement is still important.
3. Chapter 3, Procurement Strategy, describes what the procurement strategy is. This determines how the request will be satisfied.
4. Chapter 4, Solicitation Process, outlines the actual bid solicitation preparation and process. Most of the various methods of solicitation and items that need to be included in the bid solicitation are found in this chapter.
5. Chapter 5, Evaluation and Selecting the Contractor, explains how to evaluate and select the contractor based on the solicitations.
6. Chapter 6, Approvals and Authorities, provides the details of the approvals that need to be obtained before awarding a contract.
7. Chapter 7, Award of Contracts and Issuance of Standing Offers and Supply Arrangements, relates to the award of contracts, issuance of standing offers and supply arrangements, debriefings, notification to unsuccessful bidders, and other matters surrounding contract award and the issuance of standing offers and supply arrangements.
8. Chapter 8, Contract Management, offers information regarding contract management during the contract. Non-exhaustive examples of this information are contract performance, progress payments, subcontracting, warranty work, disputes, terminations and the Vendor Performance Corrective Measure Policy.
9. Chapter 9, Special Procurements, details procurements where PWGSC has implemented special procedures applicable to identified commodities, clients or projects.
10. Chapter 10, Cost and Profit, is generally used when a contract is to be awarded on a non-competitive basis for non-commercial goods or services, or in the case of a competitive process for such goods or services, only one compliant bid is received, so price negotiations with this bidder may be required.
11. The Glossary includes words, concepts, titles, etc., used throughout the Manual.

1. Each chapter refers to particular subjects by heading, and subsequent sub-heading numbers. Each chapter also commences with a Table of Contents and concludes with annexes specific to that chapter.
2. Subjects are numbered as they appear in the chapters, i.e. 1.5.5 appears in Chapter 1 and 8.65.5 Release of Contract Financial Security appears in Chapter 8.
3. Section and subsection numbering includes gaps to provide for future additions to the Supply Manual.

PWGSC procurement processes will be open, fair and honest.

All those involved in the procurement process must apply prudence, probity and transparency at each stage of the process.

1. Client Service
   PWGSC will make every reasonable effort to satisfy the operational requirements of its clients, while obtaining the best value in each procurement process.
2. National Objectives
   PWGSC procurement activities will advance established government policies, within the limits imposed by international trade obligations.
3. Competition
   PWGSC procurement will be competitive, with specific exceptions.
4. Equal Treatment
   PWGSC will ensure that all potential bidders of a particular requirement are subject to the same conditions.
5. Accountability
   PWGSC is accountable for the integrity of the contracting process. Clients are responsible for ensuring that all information relating to their requirements, which is provided to PWGSC, is complete and accurate. (See Annex 1.1: Matrix of Responsibilities between PWGSC and Client Departments for the Procurement of Goods and Services (Generic).)

1. Ensure Integrity
   Contracting officers must ensure the integrity of the procurement process. If there is any doubt that what is being done (or asked by the client to be done) might bring the integrity of the process into question, the contracting officer should consider suspending the procurement process until the issue is resolved. Issues that cannot be resolved satisfactorily at the contracting officer level must be referred to a higher authority within PWGSC.
2. Get Involved Early
   The procurement process can be facilitated by advance work being done with clients. This includes helping with needs identification and requirement definition, procurement strategy development, and drafting of solicitation documents before a requisition is actually received. This can be accomplished through ongoing liaison with the client or a review of procurement patterns. These methods can be initiated by a client request for assistance, or by a more formal process of regular consultation.
3. Consult with Peers
   Contracting officers should consult with colleagues, particularly when working with an unfamiliar situation, such as a new commodity. Their experience and advice may help to arrive at a sound decision. Referring to previous files can also be instructive, particularly for estimating things like business volume under a new contract where there is a current contract covering substantially the same activities.
4. Liaise with the Client
   The contracting officer should keep clients informed and involved, and in order to develop responsive, creative and flexible procurement strategies, their departmental needs must be understood, as well as their specific technical requirement. When consulting the client, make the purpose plain, so that if there is a problem with a proposed approach a solution that achieves the purpose can be developed. The contracting officer must work with the client towards their operational objectives.
5. Use Specialists
   The contracting officer should seek advice from the following specialists: Legal Services, policy advisors, Access to Information and Privacy officers, quality control officers, cost analysts and risk management advisors. Specialists are available to provide guidance and recommendations in their areas of expertise. The mandatory or discretionary use of cost and price analysis specialists is detailed in the Acquisitions Program Policy Suite (under the theme of Risk Management).
6. Communicate Effectively
   Contracting officers should be very clear in communications. Written instructions accompanying each bid solicitation, for example, should be clear with no ambiguity, and be easily understood by all parties.
7. Maintain Confidentiality
   The contracting officer must treat all information of a confidential or personal nature, including bid information, in a secure and confidential manner. This ensures the integrity of the contracting process, and protects the interests of suppliers and clients.
8. Obtain Confirmation
   The contracting officer should obtain written confirmation of significant information, agreements and discussions, such as confirmation of an unusually low price, or extension of a bid validity period by the bidder.
9. Select the Appropriate Contracting Method
   1. Depending on which commodity is being procured, the appropriate contracting method may be a standing offer, a supply arrangement, a government-wide or multi-departmental contract, or a normal contract. See 3.15 Non-competitive Contracting Process for details on the usage of the different methods.
   2. Some commodities are available via mandatory standing offers, and these must be used unless there is a valid reason to deviate.
10. Commodity Knowledge
    Contracting officers should develop their understanding of their commodity's industry, the market conditions, and the pertinent factors of each commodity, which then affects the choices made by contracting officers in determining, for example, such things as the basis of payment and the selection methodology. Clients should also use their understanding of the commodity when defining their technical requirements and scope.
    Contracting officers should also keep themselves informed about such things as the proposed contractor's performance history, financial situation and practices, before recommending a contract award. It also means keeping up to date with a contractor during the performance of a contract.
11. Life Cycle Management of Assets
    Life Cycle Management of Assets (LCMA) is an integrated approach to materiel management that looks at the process as a complete system rather than separate activities. While this process is primarily the responsibility of materiel managers within client departments, procurement and disposal are a part of this process so contracting officers should discuss with the client the implications of the life cycle management process for each procurement.
12. Maintain Records
    Contracting officers should keep files up to date for reasons of good management, access to information requests as well as for audit purposes. Current files should be kept up to date for anyone who may have to consult the file or assume responsibility for it at a later date. See Annex 8.1: Guidelines on File Organization and Make-up for further details.
13. Use Standard Documents
    For every solicitation process (with the exception of construction and architecture and engineering services), whether for competitive or non-competitive requirements, contracting officers must only use the departmental standard procurement templates and the clauses of the Standard Acquisition Clauses and Conditions (SACC) Manual. Contracting officers should obtain from their supervisor the most current standard documents that have been developed in accordance with these templates within their respective areas. Directorates requiring assistance in developing documents based on these templates should contact the Procurement Policy and Tools Division of the Policy, Risk, Integrity and Strategic Management Sector by e-mail at outilsapprov.proctools@tpsgc-pwgsc.gc.ca. For more information, see section 4.15.1 Departmental Standard Procurement Templates.

1. The Department of Public Works and Government Services Act came into force on July 12, 1996, to give legislative sanction to the amalgamation of the former department of Public Works and the former Department of Supply and Services together with the Translation Bureau and the Telecommunication Services for government. The legal name of the Department is "Department of Public Works and Government Services"; while "Public Works and Government Services Canada" or " PWGSC" is the common usage name. The legal name of the Department must be used for the preparation and execution of legal documents.
2. The Act:
   1. constitutes the Department;
   2. provides for the appointment of a minister who has the management and direction of the Department;
   3. provides for the appointment of a deputy minister as deputy head of the Department;
   4. provides that the Minister is the Receiver General for Canada and the Deputy Minister is the Deputy Receiver General;
   5. sets out the powers, duties and functions of the Minister which extends to and includes all matters over which Parliament has jurisdiction, not by law assigned to any other department, board or agency of the Government of Canada.
3. Sections 6 and 7 outline in detail the powers, duties and functions of the Minister. With respect to acquisitions, the following services are specifically identified in Section 6:
   1. acquisition and provision of articles, supplies, machinery, equipment and other materiel for departments;
   2. acquisition and provision of services for departments;
   3. planning and organizing of the provision of materiel and services required by departments;
   4. acquisition and provision of printing and publishing services for departments; and
   5. construction, maintenance and repair of public works, federal real property and federal immovable.
4. Section 8 allows the Minister to delegate any of the Minister's powers, duties or functions under the Act to an appropriate minister, within the meaning of the Financial Administration Act, for any period and under any terms and conditions that the Minister considers suitable. Section 8 also provides the Minister of PWGSC with the power to authorize other Ministers, to whom he or she has delegated powers under the Act, to sub delegate those powers to the "chief executive" of the relevant department. Subsection 8(3) empowers a minister receiving the authority to sub-delegate to the officials who are in charge of the departments in that minister's portfolio and subsection 8(4) empowers those officials in turn, to sub-delegate to departmental officials under their jurisdiction.
5. Section 9 gives the Minister the exclusive authority for the acquisition of goods. All ministers have inherent power to contract; however, the authority given to the Minister in section 9 supplants the authority of each department to contract for goods. That authority may be restored to the extent determined by the Minister of PWGSC through a delegation, in accordance with section 8, from the Minister of PWGSC to the Minister responsible. Departments may enter into contracts for services under their own authorities, up to the limits contained in Appendix C - Treasury Board Contracts Directive; however, they may still choose to have these contracts for services done by PWGSC.
6. Section 16 empowers the "Minister to do anything for or on behalf of:
   1. any department, board or agency of the Government of Canada or Crown Corporation, or
   2. with the approval of the Governor in Council, any government, body or person in Canada or elsewhere that requests the Minister to do that thing, where the Minister is authorized to do that thing under this or any other Act of Parliament for or on behalf of any department, board or agency of the Government of Canada."
7. Sections 20 and 21 provide the necessary contracting powers of the Minister, including the power to fix terms and conditions of contracts, and instructions, terms and conditions with respect to other documents relating to contracts and their formation. Section 22 gives the Minister the power to incorporate contractual clauses by reference.

1. The Financial Administration Act provides the legal framework for the collection and expenditure of public funds, including the contracting practices of PWGSC and its clients. Sections 32, 33, 34, 37, 40 and 41 are of direct interest to contracting officers.
2. Section 32 provides that no contract providing for a payment can be entered into unless there is sufficient funding available to discharge any debt that under the contract will be incurred during the fiscal year in which the contract is entered into. Section 33 requires that no charge can be made against an appropriation except on the requisition of the appropriate Minister of the department for which the appropriation was made or of a person authorized in writing by that Minister.
3. Pursuant to section 34, no payment can be made unless the deputy of the appropriate Minister, or another person authorized by the Minister certifies, in the case of a payment for the performance of work, the supply of goods or the rendering of services, that the work has been performed, the goods supplied or the service rendered and that the price charged is in accordance with the contract, or if not specified in the contract, is reasonable. Under 1.20(a) (ii), payment may be made before completion of the work (i.e. advance or progress payment) but only if such payment is in accordance with the contract.
4. Sections 37 and 37.1 provide that any unexpended portion of an appropriation lapses at the end of the fiscal year, except that a debt incurred for work performed, goods received or services rendered before the end of the fiscal year must be recorded as an expenditure against the appropriation, even though payment is made during the following fiscal year.
5. Section 40 provides that it is a term of every contract providing for the payment of any money by Her Majesty under that contract is subject to there being an appropriation for the particular service for the fiscal year in which any commitment under that contract would come in course of payment.
6. Section 41 provides for regulations with respect to the conditions under which contracts may be entered into.
7. Sections 61 and 62 restrict the transfer, lease or loan of public property and require each department to maintain adequate records of its public property. However, pursuant to the Public Property Loan Regulations, (SOR/92-745), section 61 permits ministers to loan public property, subject to certain conditions.
8. Sections 66 to 71 describe conditions under which Crown debts may be assigned, and the procedure to follow.
9. Contracting officers should be familiar with the Government Contracts Regulations (GCR). Part I of the GCRs deals with conditions of contract entry. Section 4 provides that contracts for legal services are only entered into by the Minister of Justice. Section 5 sets out the requirement for soliciting bids and section 6 specifies conditions under which bids need not be solicited. Section 8 and 9 authorize advance payments and progress payments. Part II deals with bid and contract security.

1. The Defence Production Act (DPA) gives the Minister of PWGSC the responsibility to administer the DPA and the exclusive authority to buy or otherwise acquire defence supplies and construct defence projects required by the Department of National Defence, subject to exceptions listed at subsection 10(2) of the DPA. All PWGSC contracts for defence supplies or projects are governed by the provisions of the DPA.
2. The DPA includes the following three parts: (1) Procurement of Defence Supplies; (2) Regulations of Access to Controlled Goods; and (3) Offence and Punishment.
3. In Part 1, section 11 permits the Minister, if authorized by the Governor in Council, to do or undertake, on behalf of an associated government, any act or thing that the Minister is empowered to do or undertake under the Act. Sections 12 to 15 deal with the Minister's mandate to organize and control the Canadian defence industry. Section 16 provides wide powers to the Minister with respect to the procurement, production or disposal of defence supplies or defence projects. Sections 21 to 25 deal with the administration of defence contracts.
4. Part 2 deals with the regulation of access to controlled goods, including requirements for registration, offences and prohibitions. Part 3 defines offences, continuing offence and factors to consider when sentencing.

1. The Federal Accountability Act (FedAA) was granted Royal Assent on December 12, 2006. The Act provides for conflict of interest rules, measures respecting administrative transparency, oversight and accountability. The Act enacts two new acts (the Conflict of Interest Act and the Director of Public Prosecutions Act) and makes a series of amendments to existing legislation such as the Parliament of Canada Act, the Lobbying Act, the Financial Administration Act, the Criminal Code and the Department of Public Works and Government Services Act.
2. The FedAA also amends the Department of Public Works and Government Services Act to provide for the appointment and mandate of a Procurement Ombudsman. See 1.35.5 Procurement Ombudsman for more details.

In addition to the above statutes, examples of other acts which also apply to contracting for goods and services are as follows:

1. Conflict of Interest Act;
2. Access to Information Act;
3. Privacy Act;
4. Official Languages Act;
5. Lobbying Act;
6. Criminal Code;
7. Competition Act;
8. Department of Justice Act;
9. Bankruptcy and Insolvency Act.

1. Canada is a signatory to two international trade treaties aimed at reducing trade barriers between the signatories: the North American Free Trade Agreement (NAFTA) and the World Trade Organization Agreement on Government Procurement (WTO-AGP). Canada has also signed the Canada - Chile Free Trade Agreement (CCFTA) and the Canada - Peru Free Trade Agreement (CPFTA). As well, Canada has signed the Agreement on Internal Trade (AIT) with the provinces and territories.
2. Some trade agreements have the added force of law as they have been enshrined in legislation (the North American Free Trade Agreement Implementation Act, the World Trade Organization Agreement Implementation Act, the Agreement on Internal Trade Implementation Act).
3. The procurement provisions of all trade agreements are similarly structured in that if a proposed contract meets certain criteria it is covered by the agreement; if it does not meet all the stated criteria then it is not covered. A proposed contract can be, and often is, covered by more than one agreement.
4. Coverage Under Multiple Agreements
   For all trade agreements, PWGSC is required to comply with specific procedures when completing certain procurements. Therefore a decision must be made as to whether or not the requisition is subject to a particular agreement, or a combination of agreements. To determine coverage under the various trade agreements, the estimated procurement value (including the estimated amount of the Goods and Services Tax or the Harmonized Sales Tax), the client, the type of good or service or construction, and any exceptions or exclusions must be reviewed. Contracting officers should note that when the procurement is covered by more than one agreement, all agreements must be complied with at the same time. In order to accomplish this, the procedures to be followed are the procedures that are considered the most rigorous. For example, for limited tendering reasons, procurement covered by NAFTA, WTO-AGP and AIT, only the limited tendering reasons that are common to all three agreements are available as options.
5. For assistance with the application of the trade agreements, contracting officers may contact Trade Agreements Strategy of the Policy, Risk, Integrity and Strategic Management Sector, either by telephone at 819-956-6411, or by e-mail at christine.cowan@tpsgc-pwgsc.gc.ca.

1. The North American Free Trade Agreement Implementation Act (S.C. 1993, c. 44) sets out Canada's commitment to reduce trade barriers between Canada, the United States of America and the Federal Republic of Mexico. Chapter 10 of the Agreement focuses on achieving greater competition for, and transparency in, government procurement, eliminating the protection of domestic products or suppliers or discrimination among foreign products or suppliers. The "National Treatment" clause and the "Non-discrimination" clause are similar as those found in the WTO-AGP.
2. The use of measures to improve socioeconomic development (offsets) for procurements covered by NAFTA is prohibited. See Article 1006: Prohibition of Offsets. Note that set-asides for minority businesses are permitted as described in paragraph e.v. below.
3. To determine whether NAFTA is applicable, the agreement (Chapter 10) must be consulted. In the following sections on determining NAFTA coverage, all references to an "Annex" are to the annexes of Chapter 10 of NAFTA.
4. For purposes of determining coverage, a requisition is considered to be one for:
   1. goods;
   2. services; or
   3. construction services;
   based on the one that represents more than 50 percent of the estimated value of the requisition.
5. To determine if a procurement is subject to NAFTA, refer to the following:
   1. Determine the value of the requisition. See Article 1001: Scope and Coverage, Article 1002: Valuation of Contracts, and Annex 1001.2c Country-Specific Thresholds of NAFTA. The thresholds in NAFTA are presented in U.S. dollars. The values in Canadian dollars are based upon conversion factors, as agreed upon in the Agreement, and are revised every two years. They are published in Treasury Board Contracting Policy Notice 2015-3. The conversions below are in effect until December 31, 2017.
   2. A procurement may be subject to NAFTA if the requisition value, in Canadian dollars, is as follows:
      1. for goods being procured by departments and agencies (including some Commissions and Boards): $28,900. See subparagraph 1001(1)(c)(i);
      2. for services being procured by departments and agencies: $89,600. See subparagraph 1001(1)(c)(i);
      3. for construction services being procured by departments and agencies: $11,600,000. See subparagraph 1001(1)(c)(i).
   3. Determine the coverage by client. See Annex 1001.1a-1 Federal Government Entities and Annex 1001.1a-2 Government Enterprises.
   4. Determine the coverage by type of requirement:
      1. goods – See Annex 1001.1b-1 Goods; or
      2. services – See Annex 1001.1b-2 Services; or
      3. construction services – See Annex 1001.1b-3 Construction Services.
   5. Determine if an exception, such as the one for national security, should be invoked for the requirement. Article 1018: Exceptions provides the complete list of exceptions. See Supply Manual section 3.105 National Security Exceptions for more information on National Security Exceptions.
   6. Determine if the requirement is excluded from the Agreement. Annex 1001.2b General Notes provides the complete list of types of requirements that are excluded from NAFTA, for example, paragraph 1.(d) provides for set-asides for minority businesses. Therefore, procurements that are set aside (i.e. reserved) for either CLCA beneficiaries, or for aboriginal businesses under the Procurement Strategy for Aboriginal Business (PSAB), are excluded from the Agreement, making the obligations of NAFTA) no longer applicable. For more information on when procurements can be reserved for CLCA beneficiaries, see 9.35 Comprehensive Land Claims Agreements (CLCAs). For more information on PSAB, see 9.40 Procurement Strategy for Aboriginal Business.

1. World Trade Organization Agreement on Government Procurement (WTO-AGP) is an agreement, which aims to secure greater international competition for government procurement. It provides procurement procedures, which Canada abided to.
2. The Agreement also contains provisions of national treatment and non-discrimination that Canada must respect (Article III). National treatment means that

   "…each Party shall provide immediately and unconditionally to the products, services and suppliers of other Parties offering products or services of the Parties, treatment no less favorable than:

   1. that accorded to domestic products, services and suppliers; and
   2. that accorded to products, services and suppliers of any other Party."

3. Non-discrimination means that

   "…each Party shall ensure:

   1. that its entities shall not treat a locally-established supplier less favorably than another locally-established supplier on the basis of degree of foreign affiliation or ownership; and
   2. that its entities shall not discriminate against locally-established suppliers on the basis of the country of production of the good or service being supplied, provided that the country of production is a Party to the Agreement in accordance with the provisions of Article IV."

4. The use of measures to improve socioeconomic development (offsets) for procurements covered by WTO-AGP is generally prohibited. See Article XVI: Offsets. Note that set-asides for minority businesses are permitted as described in paragraph h.vi. below.
5. To fully determine whether the WTO-AGP is applicable, the Agreement must be consulted. In the following Sections on determining WTO-AGP coverage, all references to an "Annex" are to the annexes to the WTO-AGP.
6. Each Party to the WTO-AGP has an Appendix, which includes five Annexes defining the coverage of that Party's obligations.
7. A procurement is covered by the WTO-AGP if:
   1. its value is equal to or greater than the relevant threshold;
   2. if the type of requirement (e.g. plumbing supplies) is covered;
   3. if the entity for which the procurement is being done is covered, and
   4. if there is no specific exception applicable (e.g. shipbuilding) or invoked (e.g. national security). All four criteria must be met in order for the procurement to be covered by the WTO-AGP. See below for how to determine if these criteria are met.
8. To determine if a procurement is subject to the WTO-AGP, refer to the following:
   1. Determine the value of the requisition. See Article I: Scope and Coverage; Article II: Valuation of Contracts, and Appendix I, Annex 1 Federal Government Entities (DOC Version 66 KB) - (Help on File Formats) of WTO-AGP. The thresholds in the WTO-AGP are presented in the Special Drawing Rights, the unit of account of the International Monetary Fund. The threshold is converted to Canadian dollars and published in a Treasury Board Contracting Policy Notice, which is reviewed every two years.

      A procurement may be subject to WTO-AGP if the requisition value in Canadian dollars (including taxes) is as follows for the period January 1, 2012, to December 31, 2013:

      1. For goods and services being procured by a federal government entity, including departments, and some Commissions and Boards: $200,900. See Appendix I, Annex 1 Federal Government Entities (DOC Version 66 KB); and
      2. For construction for federal government entities: $7,700,000. See Appendix I, Annex 1 Federal Government Entities (DOC Version 66 KB).
   2. Determine whether the client department is covered by determining if they are listed in Canada's Annex 1 Federal Government Entities (DOC Version 66 KB).
   3. Determine the coverage by the client. See Appendix I, Annex 1 Federal Government Entities (DOC Version 66 KB).
   4. Determine the coverage by type of requirement:
      1. goods – See Appendix I, Annex 1 Federal Government Entities (DOC Version 66 KB), or
      2. services – See Appendix I, Annex 1 Federal Government Entities (DOC Version 66 KB) and Annex 4 Services (DOC Version 57 KB). The WTO-AGP identifies services coverage, according to the United Nations Central Product Classification system of classification.
      3. construction services – See Appendix 1, Annex 1 Federal Government Entities (DOC Version 66 KB) and Annex 5 Construction Services (DOC Version 36 KB).
   5. Determine if an exception, such as the one for national security, should be invoked for the requirement. Article XXIII: Exceptions to the Agreement provides the complete list of exceptions. See Supply Manual section 3.105 National Security Exceptions for more information on National Security Exceptions.
   6. Determine if the requirement is excluded from the Agreement. Canada’s General Notes in Annex 5 to Appendix I provide the complete list of types of requirements that are excluded from WTO-AGP, for example, Article 1.(d) provides for set-asides for minority businesses. Therefore, procurements that are set aside (i.e. reserved) for either CLCA beneficiaries, or for aboriginal businesses under the Procurement Strategy for Aboriginal Business (PSAB), are excluded from the Agreement, making the obligations of the WTO-AGP no longer applicable. For more information on when procurements can be reserved for CLCA beneficiaries, see 9.35 Comprehensive Land Claims Agreements (CLCAs). For more information on PSAB, see 9.40 Procurement Strategy for Aboriginal Business.

1. The Agreement on Internal Trade (AIT) is a comprehensive agreement on Canadian internal trade in recognition of the need to reduce barriers to trade within Canada.
2. Chapter Five - Procurement of the AIT, Procurement, is intended to "establish a framework that will ensure equal access to procurement for all Canadian suppliers in order to contribute to a reduction in purchasing costs and the development of a strong economy, in a context of transparency and efficiency".
3. In the following sections on determining AIT coverage, all references to an "Annex" are to the annexes to Chapter Five, Procurement, of the AIT.
4. If all of the following AIT criteria are met, the procurement is subject to AIT:
   1. Determine the value of the requisition. A procurement may be subject to AIT if the requisition value is:
      1. $25,000 or greater, in cases where the largest portion of the procurement is for goods;
      2. $100,000 or greater, in cases where the largest portion of the procurement is for services, except those services excluded by Annex 502.1B Services Covered by Chapter Five; or
      3. $100,000 or greater, in the case of construction.
   2. Determine the coverage by client. Entities listed in Annex 502.1A Government Entities Covered by Chapter Five, are subject to the AIT procurement procedures. Entities listed in Annex 502.2A are excluded from Chapter Five of the AIT.
   3. Determine the coverage by the type of requirement:
      1. all requirements for the purchase, lease or rental of goods are covered;
      2. all services are covered except for those listed in Annex 502.1B Services Covered by Chapter Five; and
      3. all construction procurement is covered.
   4. Determine if an exception should be invoked for the requirement or if the requirement is excluded from the agreement. See Article 507: Non-Application; Article 1802: Aboriginal Peoples; Article 1803: Culture; and Article 1804: National Security.
5. Under Article 1802: Aboriginal Peoples, the AIT does not apply to any measure adopted or maintained with respect to Aboriginal peoples.
   1. There are two ways in which Comprehensive Land Claims Agreements (CLCAs) and AIT interact:
      1. If a procurement is reserved for CLCA beneficiaries because of a right of first refusal under that CLCA, then the contracting authority must indicate in the solicitation document and any tender notice that the procurement is set aside from AIT. In this case, the entire procurement process is not subject to AIT, and the procurement no longer falls under the jurisdiction of the Canadian International Trade Tribunal (CITT). This situation does not eliminate the requirement to comply with the Government Contracts Regulations. For more information on CLCAs, see 9.35 Comprehensive Land Claims Agreements (CLCAs).
      2. For a procurement that is subject to AIT but not to any international trade agreements, any measure for Aboriginals, including CLCA evaluation criteria, is not subject to CITT review, although the rest of the procurement process must be conducted in compliance with the AIT provisions and is reviewable by CITT.
   2. When the procurement has been set aside for Aboriginal business under the Procurement Strategy for Aboriginal Business (PSAB), the entire procurement process is not subject to AIT and the procurement no longer falls under the jurisdiction of CITT. For more information on PSAB, see 9.40 Procurement Strategy for Aboriginal Business.

1. It is a government priority to expand Canada's trade by negotiating a number of bilateral trade agreements in the coming years. The Canada - Chile Free Trade Agreement (CCFTA) Part Three this- Government Procurement portion came into effect on September 5, 2008. The Canada - Peru Free Trade Agreement (CPFTA) came into effect on July 1, 2009. Chapter 14 of the CPFTA covers procurement.
2. Neither the CCFTA nor the CPFTA have any reporting requirements.
3. In general, the Supply Manual refers only to NAFTA and the WTO-AGP, as procedural requirements of the other international trade agreements will be fulfilled following compliance to the procedural requirements of NAFTA and the WTO-AGP.

1. The federal government, represented by Aboriginal Affairs and Northern Development Canada (AANDC), has negotiated a number of Comprehensive Land Claims Agreements (CLCAs) with Aboriginal peoples. CLCAs are modern treaties that are based on the concept of continued Aboriginal rights and title to lands traditionally used and occupied by an Aboriginal group, which have not been dealt with by treaty or other legal means.
2. CLCAs are law. The CLCA obligations are legally binding because they are contained in agreements signed by Canada and backed by legislation. Furthermore, the Aboriginal rights detailed within them are constitutionally protected under Section 35 of the Constitution Act 1982.
3. Most CLCAs include measures dealing with procurement, and although these measures are not always identical in the various agreements, they are all aimed at enhancing economic opportunities of the Aboriginal group benefiting from the agreement, usually through increased possibilities of competing successfully for contracts in their settlement areas or of participating in employment, training or subcontracting opportunities.
4. To determine whether CLCAs apply to a procurement, and to learn how to address the CLCA obligations during the procurement process, refer to 9.35 Comprehensive Land Claims Agreements (CLCAs).

Contracting officers should also be aware that a number of National Park Agreements and Department of National Defence Co-operation Agreements have been signed between individual departments and certain aboriginal groups. Reference to these agreements can be found in sections 7 to 10 of Treasury Board Secretariat Contracting Policy Notice 1997-8.

1. The Treasury Board (TB) is a Cabinet committee of the Queen's Privy Council of Canada. TB is responsible for accountability and ethics, financial, personnel and administrative management, comptrollership, approving regulations and most orders-in-council.
2. As the administrative arm of TB, the Treasury Board of Canada Secretariat (TBS) has a dual mandate to support TB as a committee of ministers and to fulfill the statutory responsibilities of a central government agency. TBS provides advice and support to TB ministers in their role of ensuring value-for-money and provides oversight of the financial management functions in departments and agencies. TBS makes recommendations and provides advice to the TB on policies, directives, regulations, and program expenditure proposals with respect to the management of the government's resources.

1. The Treasury Board Contracting Policy, established under s. 7(1) of the Financial Administration Act (FAA), sets out the policy objective for government contracting as being that to acquire goods and services and to carry out construction in a manner that enhances access, competition and fairness and results in best value or, if appropriate, the optimal balance of overall benefits to Canada and the Canadian people. It provides that:
2. Government contracting must be conducted in a manner that will:
   1. Stand the test of public scrutiny in matters of prudence and honesty, facilitate access, encourage competition and reflect fairness in the spending of public funds.
   2. Ensure the pre-eminence of operational requirements.
   3. Support long-term industrial and regional development and other appropriate national objectives, including aboriginal economic development.
   4. Comply with the government's obligations under NAFTA, WTO-AGP and AIT.

The objective of the Common Services Policy is to ensure that departments and agencies can acquire responsive, cost-effective support for their program delivery. It further provides that client service organizations will offer services to client departments in a manner that is most supportive of timely, effective and economical delivery of programs to the public. PWGSC is identified both as a provider of mandatory common services under Appendix E - Mandatory Services of the policy, and of optional common services under Appendix F - Optional Services of the policy.

The Appendix C - Treasury Board Contracts Directive, issued pursuant to section 10 and paragraph 41(1)(a) of the FAA, sets basic contracting limits for contracting authorities, and provides specific contracting limits for specific ministers. The TB Contracts Directive sets out the limits above which departments must obtain TB approval. The application of the Directive to PWGSC is set out in Chapter 6 Approvals and Authorities.

The objective of the Procurement Review Policy is to enhance the use of procurement in support of industrial and regional development and other national objectives in a manner that is fully consistent with the government's approved procurement objectives, and with Canada's international commitments within the General Agreement on Tariffs and Trade, NAFTA or other trade rights and obligations. See 3.70 Procurement Review for further details.

The Code of Conduct for Procurement consolidates the government's existing legal, regulatory and policy requirements into a concise and transparent statement of the expectations that the government has of its employees and its suppliers. It ensures that public servants and suppliers are working from the same statement of expectations and commitments that clearly outline what is acceptable conduct when contracting with the government. The Code applies to all procurements done by Public Works and Government Services Canada (PWGSC) (for PWGSC and/or on behalf of client departments) and it requires that PWGSC abide by the legislation and policies outlined in the Code. It is a single point of reference to key responsibilities and obligations of public servants and suppliers.

1. The international trade agreements require that each party have an independent bid challenge authority. The Canadian International Trade Tribunal (CITT) is the bid challenge authority for Canada for the North American Free Trade Agreement (NAFTA), World Trade Organization Agreement on Government Procurement (WTO-AGP) Canada - Chile Free Trade Agreement (CCFTA), Canada - Peru Free Trade Agreement (CPFTA) and Agreement on Internal Trade (AIT). A potential supplier may file a complaint concerning a procurement action to the CITT, on the grounds that any aspect of the procurement process relating to a requirement covered by these agreements is unfair or discriminatory.
2. CITT is authorized to receive complaints pertaining to any aspect of the procurement process up to and including contract award, and also to conduct inquiries and make determinations. In dealing with a complaint, CITT must determine whether the government institution responsible for the procurement under review has complied with the requirements of the trade agreements and such other procedural requirements, as prescribed in the Canadian International Trade Tribunal Procurement Inquiry Regulations.
3. Contracting officers may contact the PWGSC CITT expert advisor, either by telephone at 819-956-6411 or by facsimile at 819-956-1265 for assistance with respect to an actual or potential CITT action. Contracting officers should encourage suppliers to resolve issues directly with PWGSC before making a complaint to the CITT. Any matter brought to the attention of the contracting officer should be handled with a minimum of delay, while exercising due care and judgment. Experience demonstrates that there are often minor errors, omissions, or other inadvertent actions, which can quickly be clarified or corrected to the satisfaction of all concerned, thus removing the basis of many problems and concerns at the outset.
4. All PWGSC actions in response to a complaint filed with the CITT are coordinated through the PWGSC Acquisitions Program Policy Directorate (APPD). All requests, decisions, reports, letters, etc, to the CITT will be coordinated by APPD in consultation with Legal Services and the procurement organization. The procurement organization is responsible for preparing a chronology of events that will form the "backbone" of the Government Institution Report (GIR). Legal Services will produce the remaining sections, with input from the procurement organization, other departmental specialists, and the client department, as required. The procurement organization's management remains responsible to review and approve the GIR, before the sign-off.
5. Contracting officers must ensure that complete documentation and records dealing with the complaint, including a dated record of all communications with suppliers, are maintained in order to substantiate that the procurement process was carried out in accordance with the obligations of the trade agreements. Throughout the complaint process, PWGSC will keep the client informed of actions taken in response to the complaint, as well as any notices, decisions, information, etc. received from the CITT.
6. The Assistant Deputy Minister, Acquisitions Branch, is the signing authority for requests for the rescission of Postponement of Award Orders.
7. Details about the CITT, including its complaint and inquiry process, are in the publication Procurement Review Process: A Descriptive Guide. The CITT Determinations, Notices and Orders can also be viewed on the CITT Web site.

1. Sections 306 and 307 of the Federal Accountability Act (FedAA) amend the Department of Public Works and Government Services Act to provide for the appointment and mandate of a procurement ombudsman. The Procurement Ombudsman has four primary functions, which are to:
   1. review the practices of departments for acquiring materiel and services to assess their fairness, openness and transparency and make any appropriate recommendations to the relevant department for the improvement of those practices;
   2. review any complaint respecting the award of a contract for the acquisition of goods below the value of $25,000 and services below the value of $100,000;
   3. review any complaint respecting the administration of a contract for the acquisition of materiel or services by a department, regardless of dollar value;
   4. ensure that an alternative dispute resolution process is provided, if both parties agree to participate;
   5. a possible fifth function is that the Federal Accountability Act also specifies that the Procurement Ombudsman can also perform any other duty or function respecting the practices of departments for acquiring materiel and services that may be assigned to the Procurement Ombudsman by order of the Governor in Council or the Minister of Public Works and Government Services Canada.
2. The Office of the Procurement Ombudsman (OPO) performs its duties and functions as set out in the Procurement Ombudsman Regulations.
3. The role of coordinating supplier complaints to OPO as well as OPO reviews of those procurement practices performed by Acquisitions Branch on behalf of clients has been assigned to the Acquisitions Program Policy Directorate, Policy, Risk, Integrity and Strategic Management Sector.
4. For assistance with respect to OPO related activities or potential complaints, contracting officers may contact the OPO Coordination Office, by telephone at 819-956-1232.

1. The individual requirements of a particular procurement may suggest that a course of action other than one set out in this Manual should be followed. Wherever there is no instruction on a particular subject, contracting officers must use their judgement and knowledge following the guiding principles at subsection 1.10.5 Guiding Principles.
2. PWGSC may be required to defend publicly a contracting officer's actions, and the contracting officer will be required to substantiate those actions. In the event that there is a need to deviate from an established policy or procedure, the process to be followed can only be presented in general terms:
   1. Any deviation must be identified in advance and must be carefully assessed and justified (including the reason for the deviation and the consequences of not deviating) for approval by the director general.
   2. The director general must determine whether more senior officials must become involved in the decision to deviate.

Contracting officers are delegated authorities from the Minister of Public Works and Government Services Canada (PWGSC) to provide procurement and acquisitions-related services to departments and agencies. See Chapter 6 Approvals and Authorities for further details.

If a procurement conducted by Public Works and Government Services Canada on behalf of the client department is subject to any litigation proceedings (including a complaint to the Canadian International Trade Tribunal or to the Office of the Procurement Ombudsman, or other alternative dispute resolution process), the client will cover all of the costs (including legal costs, departmental administrative costs, any damages and any amounts required to be paid to third parties) associated with such proceedings.

Commodity management provides the following:

1. A government-wide approach to managing commonly used goods and services that meet the operational requirements of client departments and support their program and service objectives.
2. An effective "best practices" combination of:
   1. market and demand/spend analysis,
   2. total life cycle and risk analysis,
   3. governance and consultation,
   4. strategic sourcing and procurement practices to achieve the best value and reduce total cost to government through:
      1. volume optimization,
      2. purchase specification standardization and improvement,
      3. supply base optimization,
      4. purchasing process improvements and technology integration,
      5. demand, maintenance and spares management,
      6. best value evaluation,
   5. change management and training to improve client procurement process management,
   6. contract management including performance measurement and tracking.
3. Attention to these elements is done in the context of current procurement values and ethics of transparency, equity and openness as well as government socio-economic, sustainable development and environmental "green" improvement objective.

1. Some of the goals of commodity management are:
   
   1. to establish performance measures, to assess what, how and at what cost the government procures goods and services, thereby facilitating a successful continuous improvement program;
   2. to identify risk factors to government operations and mitigation strategies to manage those risks (e.g. strengths, weaknesses, opportunities and threats);
   3. to collaborate with client departments through inter-departmental commodity teams, resulting in the commitment to use government-wide procurement instruments, and
   4. to achieve best value for Canada, including lowest overall cost and ability to support socio-economic objectives, sustainable development and aboriginal objectives.
2. Some of the benefits of commodity management are:
   
   1. improved transparency, accountability and responsibility for procurement across the federal government;
   2. a simplified process that ensures efficient delivery of goods and services;
   3. ability to better understand, define and meet operational requirements for a full range of government programs, through close collaboration with client departments;
   4. stronger relationships with the supplier community and the use of procurement processes, leading to the selection of top-performing contractors and to obtain high-quality goods and/or services at best value, and
   5. more effective and pro-active contract management strategies and implementation plans.

1. Pre-competed Procurement Instruments (PCPIs), also known as Consolidated Procurements Instruments, can result in, but are not limited to, standing offers, supply arrangements, task authorization contracts, or government-wide contracts resulting from the commodity management processes and are put in place between Canada and one or more suppliers for the provision of a specific commodity over a specified period of time.
2. Departments and agencies should always consider use of these procurement instruments as the first method of supply of goods and services. There are both mandatory and non-mandatory PCPIs. In 2005, Treasury Board distributed a letter to departments and agencies for mandatory use of standing offers and supply arrangements for 10 ARCHIVED - commodity categories. Further details on the different methods of supply can be found in Chapter 3 Procurement Strategy and Chapter 4 Solicitation Process.

1. The Policy on Green Procurement was introduced through the ARCHIVED - TB Contracting Policy Notice 2006-1, and came into effect on April 1, 2006. The objective of the policy is to advance the protection of the environment and to support sustainable development by integrating environmental performance considerations into the procurement decision-making process.
2. The Policy is set within the context of "value for money" and a life cycle management approach. The Policy requires that departments integrate environmental performance considerations, as a key factor in procurement decisions that occur throughout the life cycle of assets and acquired services. Departments are also required to establish green procurement targets and monitor and report on their green procurement performance through the annual Report on Plans and Priorities and the Departmental Performance Report; or, if applicable, in the Sustainable Development Strategy section of the ARCHIVED - Departmental Performance Report. This Policy applies to all departments and agencies.
3. The Policy is described in further detail in 2.20 Green Procurement and Defining the Requirement and 3.65 Green Procurement Strategy.
4. The implementation of the Policy in Acquisitions Branch is managed by the Green Procurement Team, within the Procurement Strategy and Performance Management Directorate (PSPMD). Contracting officers can contact the Green Procurement team by visiting the Contact Green Procurement page.
5. Contracting officers are required to:
   1. take the on-line course Green Procurement (C215) available through the Canada School of Public Service;
   2. incorporate environmental considerations into the commodity management process for all procurement instruments, if applicable;
   3. advise all clients of the Green Procurement Policy and support them, using the information, tools and guidance available, to meet both the client needs and policy requirements; and
   4. record in procurement files and in contract approval documents that environmentally preferable goods or services have been considered.

The Office of Greening Government Operations (OGGO) was created in April 2005 within Public Works and Government Services Canada (PWGSC). OGGO's mandate is to accelerate the greening of the government's operations by working with other federal departments, particularly Treasury Board Secretariat and Environment Canada. OGGO works in conjunction with the Green Procurement Team in Acquisitions Branch (AB), to establish procedures to enhance green procurement within AB and throughout the government.