6.4. Annex: Conditions Imposed on the Approval Authority Limits for Public Works and Government Services Canada Personnel

This annex describes the internal approval and signing authorities and exceptions to the internal approval authorities. It also addresses additional signing authorities such as for progress payments, certifications, etc.

1. Approval Authorities

1. Internal approval and signing authorities are in accordance with Annex 6.4.2: Contracting Limits including Exceptional Authorities.
2. Treasury Board (TB) approval is required for submissions exceeding the authority found in Annex 6.4.2.
3. Exceptions to Annex 6.4.2 are described in 1.1 below.

1.1 Exceptions to Internal Approval Authorities

1.1.1 Former Public Servants

1. Contracting limits in Annex 6.4.2 apply to submissions granting approval to enter into a contract including amendments for the services of former public servants in receipt of a pension when the contract value, including amendments, does not exceed $100,000 (competitive) or $25,000 (non-competitive).
2. TB approval is required for submissions granting approval to enter into a contract including amendments for the services of former public servants in receipt of a pension when the contract value, including amendments, exceeds $100,000 (competitive) or $25,000 (non-competitive).
3. The fee component in any non-competitive contract must be abated if the individual has been retired for less than one year and is in receipt of a pension. See section 3.90 Contracting with former public servants, subsection e.
4. TB approval is required for submissions granting approval to enter into or amend a contract with former public servants in receipt of a lump sum payment pursuant to the terms of a work force reduction program where the fee component will exceed $5,000 of either the individual contract or a combination of contracts, during the period covered by the lump sum payment. See section 3.90, subsection e.

Note: For more information on the definition of former public servants and pension, see section 3.90, subsection b.

1.1.2 Confirming Orders

Submissions granting approval to issue a confirming order must be approved at the Director level or higher in accordance with the non-competitive contract approval authority limits in Annex 6.4.2: Contracting Limits including Exceptional Authorities. The limitation to non-competitive contract approval authority limits apply to all positions below Assistant Deputy Minister. (See 6.30.10 Confirming Orders and Contracts Involving Pre-contractual Work.)

1.1.3 Royalty Payments

1. For contracts subject to the Defence Production Act (DPA), when royalty payments exceed five percent, Deputy Minister approval is required before entering into a contract. (Approval of the Deputy Minister is not sought to enter into contract, but to permit Canada to pay the royalty.)
2. If there is an increase in the amount of the royalty to be paid or if further items become subject to royalty payments during the life of a contract, the same guidelines for approval apply.
3. To obtain the approval of the Deputy Minister for royalties exceeding five percent, the following information is to be provided on Part 1 of the contract request:
   1. details of the royalties;
   2. a forecast of anticipated future purchases beyond the requirement in the present submission;
   3. the comments of Legal Services.

1.1.4 National Security Exception

1. The Assistant Deputy Minister, Acquisitions Branch (ADM/AB) must have approved the National Security Exception (NSE) pursuant to a letter from the client ADM requesting the NSE before the document approval process takes place.
2. Following NSE approval by the ADM/AB, the normal document approval process and authority apply.
3. For complete details of the NSE process, see 3.105 National Security Exceptions.

1.1.5 Integrity Provisions

1. Public Interest Exception (PIE): A PIE must be invoked prior to entering into a contract, supply arrangement or standing offer with a bidder, offeror or supplier, or assigning a contract to proposed assignee who has been determined to be ineligible or suspended under the Ineligibility and Suspension Policy. A request for a PIE must be escalated to the Assistant Deputy Minister (ADM) of Acquisitions Branch (AB) through the Acquisitions Program Integrity Secretariat (APIS), by e-mail at TPSGC.DGAIntegrite-ABIntegrity.PWGSC@tpsgc-pwgsc.gc.ca.
2. Integrity verification: When a response of “Caution Due Diligence Should be Applied” is received, approval must be sought at the level indicated on the response (i.e. ADM or Director General (DG) level).
   1. All requests for ADM approval must be sent to APIS for processing, by e-mail at TPSGC.DGAIntegrite-ABIntegrity.PWGSC@tpsgc-pwgsc.gc.ca.
   2. All requests for DG approval must be sent through the established processes within the sector or region. Contracting officers may seek assistance from APIS by e-mail at TPSGC.DGAIntegrite-ABIntegrity.PWGSC@tpsgc-pwgsc.gc.ca if required.
   3. Heightened integrity approval is not required when issuing:
      1. an amendment where the Integrity Provisions were not modified;
      2. a call-up;
      3. a contract subsequent to a supply arrangement; or
      4. a task authorization.
   4. Contracting officers may proceed with obtaining approval at the level determined for the contract through the Procurement Risk Assessment.
3. If a contractor wishes to enter into a first tier subcontract with an ineligible or suspended subcontractor, contracting officers are to escalate this request to the ADM/AB through APIS, by email at TPSGC.DGAIntegrite-ABIntegrity.PWGSC@tpsgc-pwgsc.gc.ca.

2. Additional Signing Authorities

Signing authorities for purchase orders, contracts, standing offers, supply arrangements, formal agreements and arrangements, stores and supply transfer orders, written direction to the Agency of Record, assignments, go-ahead letters and messages, letters of intent, consents to subcontract, termination for convenience notices, and amendments to any of the above, are as follows:

1. in accordance with Annex 6.4.2: Contracting Limits including Exceptional Authorities;
2. and if under departmental seal, together with the Corporate Secretary.

2.1 Advance, Milestone and Progress Payments

The authority for certification of advance, milestone and progress payment claims (form PWGSC-TPSGC 1111, Claim for Progress Payment), as a prerequisite for client certification pursuant to section 34 of the Financial Administration Actis as follows:

1. For incumbents of positions listed in Annex 6.4.2, with the exception of Intern Officers/Trainees, Senior Purchasing Assistants and Procurement Assistants, unlimited certification authority applies;
2. For Senior Purchasing Assistants:
   1. for contracts beyond their approval authority: certification authority for claims up to $40,000, with the exception of a final claim or of a release of a holdback;
   2. for contracts within approval authority: certification for all claims.

2.2 Settlement and Release Documents

1. The authority to sign release and settlement documents (form PWGSC-TPSGC 9223-2, Settlement and Release) for terminations on behalf of the Minister is delegated as follows:
   1. Arising from termination for convenience:
      1. Director General, Policy, Risk, Integrity and Strategic Management Sector, Acquisitions Branch (PRISM/AB)
      2. Director, Acquisition Program Integrity Secretariat, PRISM/AB
      3. Chairman, Contracts Settlement Board
   2. Other than for termination of convenience, authority is one of the following in the order listed:
      1. Chief Risk Officer
      2. Chairman, Contracts Settlement Board.
2. For assistance, contracting officers may consult the Specialized Support Services for Procurement Division, at 819-934-1382.

2.3 Industrial Security

The Director, Canadian Industrial Security Directorate, has the authority to provide instructions to contractors concerning industrial security requirements.

2.4 Certificates under departmental seal

The Assistant Deputy Minister, Corporate Services, Policy and Communications Branch, has the authority for certifying that documents under departmental seal are true copies.

Instructions

1. The Delegation of Authorities Tables for Complexity Levels 1 through 3 inclusive for the Acquisitions Program can be found on the Contracting Limits and Related Notes page on GCpedia.
2. The limits shown in the Delegation of Authorities Tables are maximums as defined by the application of both a Complexity Assessment and a Procurement Risk Assessment. The authority required for contract entry or amendments will be determined on a case-by-case basis through the application of a procurement risk assessment appropriate for the level of complexity. This assessment will identify the specific risks of a procurement or proposed amendment, and the appropriate level of approval required for contract entry or issuing a contract amendment.
3. For Complexity Levels 4 and 5 inclusive, with the exception of administrative amendments, the approval authority for contract entry and non-administrative amendments is set at Assistant Deputy Minister, Acquisitions Branch, regardless of the competitiveness of the requirement.
4. The relevant limits for individual officers, which may be lower than the maximums identified in the Delegation of Authority Tables, are contingent upon Acquisitions Branch policies and procedures. Contracting officers must ensure that any authorities they exercise are in accordance with their approved delegation form.
5. For the purposes of contract approval authorities, an Advance Contract Award Notice (ACAN) is classified under the "electronic bidding" category. The electronic bidding approval levels apply whenever an ACAN has been posted and no valid Statement of Capabilities was submitted.
6. Refer to Annex 6.4.5 Table of Equivalent Positions for position titles under each level.
7. Any incumbent, under any level, who holds a valid delegation of approval authority for contract entry may sign a contractual document for the same commodities for which the incumbent has delegation of authority, regardless of dollar value. For example, if the incumbent holds a valid delegation of approval authority for contract entry for goods and military repair and overhaul, then the incumbent has signing authority for goods and military repair and overhaul.
8. By default, the delegation limits of individual officers are a percentage of the departmental authority:
   
   1. Level 1 and 2 positions have 100% of the departmental authority;
   2. Level 3 positions have 50% of the departmental authority; and
   3. Level 4 positions have 5% of the departmental authority.
9. For information on contract entry approval authorities for contracts requiring ratification, refer to section 6.30.5 Ratifications within Department Authorities.
10. If the total cost of the procurement for approval purposes exceeds the limits set out in PWGSC’s Delegation of Authority Instrument, Treasury Board approval is required.
11. The Delegation of Authority Tables outline PWGSC’s Departmental Contracting Limits in accordance with Appendix C – Treasury Board Contracts Directive.
12. Unless otherwise stated within the "Notes" accompanying the Delegation of Authorities Tables, the exceptional authorities include both contract entry and amendment authority. Once the departmental authority limit for the exceptional authority has been reached, any subsequent approvals require a Treasury Board submission.
13. Standing Offers and Supply Arrangements
    
    1. Approval and amendment authorities are set in the Exceptional Contracting Limits detailed on the Contracting Limits and Related Notes page on GCpedia.
    2. The Contract Planning and Advance Approval (CPAA) issued to seek advance approval to use the standing offer method of supply, or establish a supply arrangement (or the formal procurement plan to seek procurement strategy approval), must be approved based on the total estimated value (i.e. the entire project/program), Goods and Services Tax/Harmonized Sales Tax (GST/HST) included, of the requirement that is proposed to be satisfied by this method of supply.
    3. Therefore, if it is intended to issue more than one standing offer against a Request for a Standing Offer, the sum of the total estimated value (GST/HST included) of all resulting standing offers must be used to obtain CPAA or formal procurement plan approval.

With the promulgation of PN105R1 - Procurement Complexity Levels, Risk Assessment and Approval Authorities, the content of this section was reviewed and incorporated to Annex 6.4.2: Contracting Limits including Exceptional Authorities.

The obsolete content of Annex 6.4.3 has been deleted but can be viewed for reference only in the Supply Manual Archive, Version 2014-3.

With the promulgation of PN105R1 - Procurement Complexity Levels, Risk Assessment and Approval Authorities, the notes to contracting limits were reviewed and moved to the Contracting Limits and Related Notes page on GCpedia.

The obsolete content of Annex 6.4.4 has been deleted but can be viewed for reference only in the Supply Manual Archive, Version 2014-3.

Purpose

Unless otherwise specified, all positions in this table are in the Acquisitions Branch, located in either headquarters or at client locations, or in regional operations with responsibility for common service acquisition functions.

Remarks:

1. Unless restricted by legislation, regulation, or policy, the Deputy Minister and the Associate Deputy Minister have the same authorities as the Minister.
2. For any position titles not listed in this Table of Equivalent Positions, the equivalent positions as recognized by the Chief Financial Officer will apply.

1. With the exception of administrative amendments and pre-approved amendments, the approval authority level for a proposed amendment to a contract within Complexity Levels 1 through 3 inclusive is determined by completing a Risk Assessment for Amendments (RAA).
2. When answering the "Value" question within the RAA, consideration must be given not only to the value of the proposed amendment but also to the cumulative value (or aggregate) of all amendments, both positive and negative (previous and proposed). Therefore, the dollar value to be used in that question must be the aggregate amendment value (previous and proposed) excluding pre-approved amendments.
3. Exceptional Authorities: Unless otherwise stated within the notes to contracting limits including exceptional authorities found on the Contracting Limits and Related Notes page on GCpedia, the exceptional authorities include both contract entry and amendment authority. When answering the "Value" question within the RAA, consideration must be given not only to the value of the proposed amendment but also to the cumulative value (or aggregate) of all amendments, both positive and negative (previous and proposed) and the original contract value. Therefore, the dollar value to be used in that question must be a combination of the original contract value and the aggregate amendment value (previous and proposed).
4. Examples showing when a RAA is required for a Complexity Level 1 through 3 contract awarded on an electronically competed basis can be found on the Determining the Amendment Approval Authority page on GCpedia.

With the promulgation of PN105R1 - Procurement Complexity Levels, Risk Assessment and Approval Authorities, the content of this annex was reviewed and incorporated in Annex 6.4.6: Contract Amendment Approval Instructions for Complexity Levels 1, 2 and 3.

For reference purposes, Annex 6.4.7 is available in the Supply Manual Archive, Version 2014-3.

1. Reductions in Contract Value
   1. Situation: The client reduces the quantity required and the supplier/contractor agrees to the reduced quantity with no increase in the unit price.
      Approval Level: The contracting authority, designated as such in the contract, may approve the amendment that reduces the value of the contract (when the amendment is administrative in nature).
   2. Situation: The client reduces the quantity required but the supplier/contractor wants to increase the price because of the reduced quantity. Renegotiation is necessary.
      Approval Level: The approval level for the contract amendment is that required for the revised unit price multiplied by the new quantity. Aggregate amendment approval authorities apply.
   3. Situation: The client wishes to disencumber funds allocated to a repair and overhaul contract in the last quarter of the fiscal year, because no more work arising will be forthcoming during that period.
      Approval Level: The contracting authority, designated as such in the contract, may approve an amendment to reduce the value of the contract (considered an administrative amendment).
   4. Situation: The client requires a work package to be removed from a research and development contract. There is no clear relationship between the reduced cost and the reduced work package.
      Approval Level: The amendment will be approved at a level equal to the value of the proposed cost reduction. Aggregate amendment approval authorities apply. Nil value amendment is not appropriate as there is no link between the value of the work package and the reduction.
2. Substitute Item (or work package)
   If a client requests the contracting authority to amend a contract by deleting an item (or work package) and substituting a different item (or work package), the value of the substitute item (or work package) will determine the contract amendment approval level. A Risk Assessment for Amendments must be performed to determine the appropriate approval authority required to add the substitute item (or work package).
3. Additional Risks
   Contract amendments that propose changes to either the basis of payment, the method of payment or the contract conditions, so that additional risk or liability is transferred to Canada, must be authorized in accordance with the Procurement Risk Assessment for Amendments for that contract only if corresponding compensatory benefits accrue to Canada. In the absence of corresponding benefits, such changes would constitute extra payments for which only TB has approval authority.
   The following are examples of changes that would constitute additional risk to Canada:
   1. liberalizing the progress payments;
   2. eliminating the requirement for a performance bond;
   3. slippage, by the contractor, of firm delivery dates.
4. Advance Approval for Amount Set Aside
   1. If the original authority to enter into a contract also included advance approval for an amount to be set aside for unscheduled work, design changes or work arising, then any amount set aside used must be approved by the appropriate non-competitive contract entry approval authority, not to exceed the Director level. The Risk Assessment for Amendments will determine the appropriate approval authority. When completing the "Value" question of the RAA, contracting officers are to select "set aside amount".
   2. If an amendment to use the remainder of the amount set aside for a specific purpose exceeds the amount set aside, the approval authority for the excess amount will revert back to the appropriate aggregate amendment approval authority in accordance with Annex 6.4.2: Contracting Limits including Exceptional Authorities. Aggregate amendment values of set asides, previously approved, are separate from the aggregate amendment values of either options or normal amendments. If required, set-asides can be exercised to the maximum value in one amendment.
   3. If a condition of the original approval requires other levels of approval for encumbering amounts set aside, the levels established in the original contract approval will take precedence.
   4. The amount of the set aside should be based on sound front-end planning and preparation. The better the planning and preparation the better the ability to predict additional quantities or unforeseen work arising, and the more accurate the assigned dollars values. A procurement plan that is thoroughly justified as to the purpose of each planned expenditure, is more likely to be approved.
   5. Some examples of the vehicles used to utilize the amount of the set-aside are Contract amendment, work authorization form, form DND 626 Requisition on a Contract, or a Pre-Approved Amount for Anticipated Amendments (PAAA).
5. Advance Approval for Options
   1. Once approval has been obtained to exercise an option, the contract amendment to exercise the option requires only the signature of an incumbent, under any level, who holds a valid delegation of approval authority for contract entry for the same categories for which the incumbent has delegation of authority. For example, if an incumbent holds delegation of authority for contract entry for goods and military repair and overhaul, then that incumbent would have signing authority for goods and military repair and overhaul. Aggregate values of options, previously approved, are separate from the aggregate amendment values of either set-asides or normal amendments. If required, options can be exercised to the maximum value in one amendment.
   2. Funds and approval received for an option can only be used for the specific purpose stated in the approval document. For example, if approval was obtained for a 1 year services contract valued at $200,000, with an option year also valued at $200,000, the contracting officer cannot use the approval and funding related to the option year to cover an increase in the services required during the first year.
6. Contract Code for Pre-approved Amendments
   1. Document Type number 22, Contract Code for Pre-approved Amendments is available in the Automated Buyer Environment (ABE) and SELECT, and is used to identify all pre-approved amendments.
   2. These include, but are not limited to:
      1. amendments issued to exercise an option for additional quantities or years that formed part of the original bid solicitation and approved as part of the original contract approval submission; and,
      2. amendments which use amounts set-aside for anticipated, but not yet clearly defined, changes (e.g., unscheduled work, design changes, work arising), which were approved as part of the original contract approval submission.
   3. Amendments that do not fit within the description of the original approval or go beyond the scope or value of the approval will be coded as "Normal Amendments" and must be approved at the appropriate level as determined by the Minister's delegation of amendment authorities.
7. Rates (or prices-to-be-negotiated)/Interim Rates (or prices)
   If the basis of payment in a contract includes interim rates (or prices) and it is proposed to amend the contract to provide for firm rates (or prices) in lieu, then the amendment approval authority level will be as follows (unless otherwise instructed by the contract approval authority):
   1. Contracting authority, only if the firm rates (or prices) are equal to or less than the interim rates (or prices); or
   2. For Level 1, 2 and 3 procurements, a Procurement Risk Assessment for Amendments is required to determine the appropriate approval authority; or
   3. Director General, if the contract was approved by the Assistant Deputy Minister, the Minister or TB.
8. Combining Several Types of Contract Changes in One Amendment
   When a contract amendment is raised to incorporate several types of changes enumerated above (i.e., firming up price-to-be-negotiated items, using a portion of an amount set aside, addition of items/quantities, etc.), the highest approval level must apply for any one type of these changes or combinations being incorporated into the contract by that amendment.
9. Amendments to Contracts with Former Public Servants
   Treasury Board (TB) must approve all amendments to service contracts with former public servants in receipt of a pension pursuant to the Public Service Superannuation Act when these amendments exceed the limits specified in section 1.1.1 of Annex 6.4.1: Approval Authorities and Additional Signing Authorities in Support of Clients' Programs Only - Other than for Canadian Commercial Corporation.
10. Interpretation of Aggregate Amendment Value
    1. All amendment approval authorities (for amendments not pre-approved) must be determined on the basis of the aggregate amendment value.
    2. Aggregate amendment value means the sum total of the amendments to a contract, including positive and negative amendments. It applies only to amendments requiring TB approval. For internal purposes and to ensure adequate control measures are in place, the aggregate amount for amendments not pre-approved will be calculated using only positive amendments.
    3. As a general principle, once an approval level has been reached, it can never be lowered. As an example, once the manager level for approval has been reached for Complexity Level 1 procurements, then every subsequent positive amendment reverts to the manager regardless of dollar value.
    4. Nil value amendments where no further risk or liability accrued to Canada are administrative in nature and can be approved and signed by the Contracting Authority. For nil value amendments where further risk or liability will be Canada's responsibility, the completion of a Risk Assessment for Amendments is required to determine the appropriate approval authority.
    5. Extending the period of a contract with a specific end date (i.e. a contract, task authorization contract, standing offer or supply arrangement, etc.) cannot be treated as administrative in nature. Adding additional time to the contract represents additional liability for Canada regardless of whether or not additional funding is required. For example, if a contract has been awarded for a two (2) year period ending March 31st, in the amount of $10M and there is $4M left over on April 1st, that $4M cannot be used for an extension of the contract without obtaining the appropriate approval, even though the original approval to contract was for $10M.
11. Amendment Approved by Treasury Board
    When TB has approved an amendment, PWGSC may further amend the contract without TB approval if the cumulative value of the amendments after each issuance of an amendment pursuant to a TB approval does not exceed the non-competitive contract amendment approval authority limits set out in Annex 6.4.2: Contracting Limits.