Contracting Policy

Explains the requirements to meet the objective of acquiring goods and services, and carry out construction in a manner that enhances access, competition and fairness, and that results in best value or, if appropriate, the optimal balance of overall benefits to the Crown and the Canadian people.
Date modified: 2013-10-09

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Glossary

advance contract award notice (ACAN) (préavis d'adjudication de contrat)

An Advance Contract Award Notice (ACAN) allows departments and agencies to post a notice, for no less than fifteen calendar days, indicating to the supplier community that it intends to award a good, service or construction contract to a pre-identified contractor. If no other supplier submits, during the fifteen calendar day posting period, a statement of capabilities that meet the requirements set out in the ACAN, the competitive requirements of the government's contracting policy have been met. Following notification to suppliers not successful in demonstrating that their statement of capabilities meets the requirements set out in the ACAN, the contract may then be awarded using the Treasury Board's electronic bidding authorities.

If other potential suppliers submit statements of capabilities during the fifteen calendar day posting period, and meet the requirements set out in the ACAN, the department or agency must proceed to a full tendering process on either the government's electronic tendering service or through traditional means, in order to award the contract.

amount (montant)
the consideration to be given by the contracting authority under the terms of the contract, whether the consideration is fixed or estimated.
architectural and engineering service contract (marché de services d'architectes et d'ingénieurs)
a contract for the provision of services in respect of the planning, design, preparation, or supervision of the construction, repair, renovation or restoration of a work.
award (adjudication)
the notification to a bidder that a bid or proposal is accepted.
best value (meilleure valeur)
the combination of price, technical merit, and quality, as determined by the contracting authority prior to the bid solicitation and set out in the bid solicitation evaluation criteria, and which forms the basis of evaluation and negotiation between buyers and sellers to arrive at an acceptable basis for a purchase and sale.
bill of exchange (lettre de change)
an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay, on demand, at a fixed or determinable future time a sum certain in money to or to the order of a specified person, or to bearer.
claimant's payment bond (cautionnement pour le paiement du demandeur)
a bond given by a person in a construction contract situation to guarantee the payment of one or more second-tier claimants, either sub-subcontractors or third level suppliers, if disputes between the person and those claimants are resolved in favour of the latter.
common service organization (CSO) (organisation de services communs)
an agency whose activities are directed mainly toward serving other departments and agencies.
competitive contract (marché concurrentiel)

a contract where the process used for the solicitation of bids enhances access, competition and fairness and assures that a reasonable and representative number of suppliers are given an opportunity to bid by:

Either

  1. giving public notice, using electronic bidding methodology, possibly supplemented by traditional bidding procedures, of a call for bids for a proposed contract or of an intention to award a contract to a pre-identified contractor (a directed contract advertised by an Advance Contract Award Notice – ACAN), in accordance with limited tendering reasons set out in the trade agreements, or in accordance with the exceptions to bidding set out in section 6 (of the Government Contracts Regulations (GCRs),

    and where

    1. in the case of a call for bids, the lowest bid or the bid that offered the best value, as set out in the evaluation criteria in the bid solicitation and as  determined by the contracting authority, was accepted;
    2. in the case of a call for bids where only one bid, compliant with mandatory criteria set out in the bid solicitation was received, fair value to the Crown, as determined by the contracting authority, was obtained; or
    3. in the case of an ACAN, no valid statement of capabilities is submitted to the proposed award were received within the fifteen calendar day posting period.
    OR

  2. giving public notice, using traditional bidding procedures (such as a suppliers' list, etc.) and in a manner that is consistent with generally accepted trade practices, of a call for bids for a proposed contract,

    and where

     
    1. in the case of a call for bids, the lowest bid or the bid that offered best value, as set out in the evaluation criteria in the bid solicitation and determined by the contracting authority, was accepted; or
    2. in the case that only one bid, compliant with the mandatory criteria set out in the bid solicitation was received, fair value to the Crown, as determined by the contracting authority, was obtained.
consultant (consultant)
an individual or firm which provides either advice or a professional service. (see also professional)
consulting and professional services (services de conseil et services professionnels)
services provided by individuals with significant training, qualifications and expertise in a professional, scientific, technical or managerial field. For example, the term "professional" has legal connotations for certain professions; for other occupations it denotes an accepted as evident degree of competence. Consulting and professional usually include: research and scientific studies including interpretation, architectural and engineering services, planning and development, data collection, auditing and certain aspects of electronic data processing. This listing is not exhaustive and contracting authorities should interpret each situation on a case by case basis.
contract (marché)
an agreement between a contracting authority and a person or firm to provide a good, perform a service, construct a work, or to lease real property for appropriate consideration.
contract amendment (modification d'un marché)
an agreed addition to, deletion from, correction or modification of a contract.
contract costs (coût d'un marché)
For purposes of the Treasury Board Contracting Policy, the Government Contracts Regulations and other related instruments or documents the costs include all elements that are included in the consideration which is to be paid by the Crown to a contractor under the terms of a contract, and for greater certainty these elements include all fees and taxes that are legally levied and become payable by the contractor as a result of the performance of the contract.
contract splitting (fractionnement d'un marché)
the practice of unnecessarily dividing an aggregate requirement into a number of smaller contracts, thereby avoiding controls on the duration of assignments or contract approval authorities.
contractual arrangement (accord contractuel)
an agreement between a contracting authority and entity of the Crown (e.g., Crown Corporations, provincial governments or municipalities) to provide a good, perform a service, construct a work or to lease real property for appropriate consideration. These types of agreements are not contracts in the true sense but are still subject to certain limits or constraints imposed by the Treasury Board.
cost plus fixed fee (or a percentage of cost) (coût plus honoraires fixes)
a payment arrangement whereby the contractor receives costs reasonably and properly incurred as determined by audit plus an agreed fixed fee (or a percentage of cost) by way of profit.
directed contract (marché prescrit)
a contract awarded to a preselected contractor in circumstances where the contracting authority has justifiably set aside the requirement to solicit bids under the provision of one or more of the exceptions to competitive solicitation in Section 6 of the Government Contracts Regulations. Contracting authorities are strongly encouraged to provide public notification of these contracts through an Advance Contract Award Notice (ACAN) using the electronic bidding methodology. If this is done and if there are no valid challenges received to the ACAN within 15 days, the directed contract is deemed to be competitive and may be awarded using the higher electronic bidding contracting authority levels.
disbursements (débours)
direct out-of-pocket expenses incurred.
electronic bidding (invitation électronique à soumissionner)

a method of procurement that promotes suppliers' access to, and transparency in, the procurement process and facilitates the Crown's receipt of best value, by using:

  1. public notice by means of an approved electronic information service of procurement opportunities;
  2. public notice by means of an electronic information service of proposed directed procurements by means of an Advance Contract Award Notice (ACAN); or
  3. such other procurement methods as may be approved by the Treasury Board.
emergency contact (marché d'urgence)
a contract which would normally require Treasury Board authority but is initiated in response to a pressing emergency in which delay would be injurious to the public interest.
employee takeover (prise en charge de services de l'État par des fonctionnaires)
is an agreement entered into by the Government of Canada with an employee takeover company, comprised of the former employee or group of former employees who have left the Public Service and provide for the government, from the private sector, the same or a similar service that he, she or they performed while working in the Public Service. This policy allows the employee or employee group to establish a private-sector entity to negotiate or compete for a government service-delivery contract. This contract may include a lease or license.
employee takeover company (entreprise crée aux fins de la prise en charge)
is a company, legally incorporated by the employee or employee group, who leave the Public Service and provide for the government, from the private sector, the same or a similar service that he, she or they performed while working in the Public Service. In this context, irrespective of whether an employee takeover company has more than one employee-owner and/or offers shares to former employees, ownership is defined in terms of control and significant influence over the operations and management structure of the corporation. This company may be the same employee association incorporated to develop proposal(s). It is possible that the employee takeover company is controlled by the former employees collectively and that it does not necessarily have a principal owner.
ex gratia payment (paiement à titre gracieux)
a payment where a legal liability does not exist or where it is uncertain that a legal liability exists under the contract.
fair value (juste valeur)
  1. the price that would be agreed to in an open and unrestricted market between knowledgeable and willing parties dealing at arm's length who are fully informed and not under any compulsion to transact. 

    The word "fair" implies a concept of a market which is not disturbed by unpredictable economic factors, e.g. boom or depression (23/06/94 – PWGSC Supply Manual, February 16, 1998).

    OR

  2. the value of a good or service as determined by negotiation between buyers and sellers and which value would be acceptable as a basis of a purchase and sale.(adapted from Aljian's Purchasing Handbook, Fourth Edition, McGraw-Hill Book Company, 1982.)
firm (fixed) price (prix ferme)
a method of pricing in which the total is a fixed lump sum or an amount made up of fixed unit prices. In such cases, both parties agree on the price to be paid before the contract is awarded.
firm price contract (marché à prix ferme)
a contract specifying the total payable or one in which the total payable can be calculated by multiplying identical units of work or items delivered by a fixed unit price.
fixed time rate (taux fixe au temps)
a method of pricing in which the amount payable is determined by expressing the cost of labour, overhead and profit as a fixed amount by time period.
fixed unit price (prix fixe unitaire)
a method of pricing in which the total payable is calculated by multiplying the number of identical units of work or items delivered by a fixed price per unit or item.
former public office holder (ancien titulaire de charge publique)
  1. a former Minister of the Crown;
  2. a former parliamentary secretary;
  3. a former full-time Governor-in-Council appointee, other than a former Lieutenant-Governor of a province and a former judge who received a salary under the Judges Act;
  4. a former employee of a department at a level of senior manager or above, or the equivalent, for whom Treasury Board represents the government as employer;
  5. every former member of ministerial exempt staff designated by the responsible minister to be subject to this part;
  6. a former full-time ministerial appointee designated by the responsible minister to be subject to the Conflict of Interest and Post Employment Code for Public  Office Holders;
  7. every former member of the Canadian Armed Forces at a rank of, or above, colonel, or the equivalent;
  8. a former commissioned officer of the Royal Canadian Mounted Police; and
  9. the former incumbents of any other positions designated by Treasury Board.
former public servant (ancien fonctionnaire)
any former member of a department as defined in the Financial Administration Act, a former member of the Canadian Armed Forces or a former member of the Royal Canadian Mounted Police.
government pension (pension de l'État)
superannuation or pension benefits payable out of a pension plan established for employees of Boards, Commissions and Corporations specified in Schedule A to the Public Service Superannuation Act (PSSA), as indexed by the Supplementary Retirement Benefits Act.
holdback (retenue)
the amount withheld under the terms and conditions of a contract.
lease (bail)
a contract whereby Her Majesty acquires a leasehold interest in real property situated in or outside Canada and includes a tenancy agreement and a licence in respect of real property.
non-competitive contract (marché non concurrentiel)
any contract for which bids were not solicited or, if bids were solicited, the conditions of a competitive contract were not met.
operating cost (coût d'exploitation)
the cost of operating, maintaining and repairing an acquisition throughout its useful life, less its estimated residual value at the time of retirement.
overhead costs (frais généraux)
the indirect costs associated with operating a business that, unless otherwise stated, are assumed to be included in a multiplying factor or percentage applied to payroll costs.
payrolling (embauchage obligatoire)
the practice by which firms are instructed by a government department or agency to employ specified individuals who are then assigned to provide services to that department or agency under contract.
pressing emergency (extrême urgence)
a situation where delay in taking action would be injurious to the public interest.
procurement (acquisition)
the function of obtaining goods and services and carrying out construction and leasing through contractual arrangements.
professional (professionnel)
see consulting and professional services above.
professional services (services professionnels)
see consulting and professional services above.
proposal (proposition)
a tender, bid or offer, either unsolicited or submitted in response to an invitation from a contracting authority. A proposal is usually requested when a contractor is to be chosen on the basis of the performance offered rather than on price alone. Proposals may require details such as the firm's qualifications and experience and the identification of problems and proposed solutions.
public notice (avis public)
an announcement on an approved electronic information service, in one or more newspapers, or by means of some other accepted media.
resource cost (coût de ressources)
the indirect cost incurred by a requisitioning department and/or the common service agency.
standing offer (offre à commandes)
an offer from a potential supplier to supply goods, services or both, on the pricing basis and under the terms and conditions stated in the standing offer.
statement of work (énoncé des travaux)
the specification of the work a contractor is required to do.
surety bonds (cautionnements)
security given by a third party to indemnify the contracting authority, within specified financial limits, against a contractor's failure to carry out the terms of the contract. Surety bonds can be in the form of a bid bond, a payment bond or a performance bond.
target price (fixed fee and incentive fee formula) (prix visé)
a method of pricing in which the contractor is paid costs reasonably and properly incurred as determined by audit, an agreed fixed fee as profit, and an incentive fee on any savings achieved between a prescribed target cost and the actual cost as established by audit. A target price contract may also include a ceiling price.
temporary help firms (sociétés de placement temporaire)
business organizations providing temporary help services and consisting of more than one employee or principal.
temporary help services (services de travail temporaire)
services provided under contract to the government for assignments in which the employees of a firm are engaged to provide services to a department or agency on a temporary basis.
valid bid (soumission valide)
a priced offer that is either unsolicited or is in response to a solicitation that meets all the requirements stipulated in that solicitation.
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