Other Related Documents

4. Policy requirements

4.1 Contract policy requirements

4.1.1 In support of the policy, the following must be observed in conjunction with the Definitions, the Government Contracts Regulations, the Treasury Board Contracts Directives, the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade, as well as those other Appendices and Sections which consist of both mandatory and optional requirements or a combination of both, as specified.

4.1.2 Work descriptions or specifications must be defined in terms of clear outputs or performance requirements that will encourage and accommodate the use of the competitive process and as required under the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade.

4.1.3 Whenever practical, an equal opportunity must be provided for all firms and individuals to compete, provided that they have, in the judgement of the contracting authority, the technical, financial and managerial competence to discharge the contract and meet, where appropriate, the objectives established by overall national policies or as required under the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade.

4.1.4 Where applicable, bid evaluation criteria must be established to address socio-economic factors in relation to the total cost of a contract before bids are solicited, and solicitation documents must give notice that socio-economic factors will be used to assess bids when they are received.

4.1.5 The Government Contracts Regulations as amended (refer to Appendix B), require that:

1. bids must be solicited from potential contractors before any contract is entered into unless one or more of the exceptions in Section 6 of the Regulations are applicable;

2. advance payments must be approved by the Treasury Board where the Board's authority is required for entry into the contract;
3. the provisions of the regulations on bid or contract security must be followed when the contracting authority believes they are appropriate.

4.1.6 Treasury Board approval must be obtained prior to entering into contracts or contractual arrangements where the values or the contract costs (which include all applicable taxes including GST and HST) exceed the limits prescribed by the Treasury Board in the Treasury Board Contracts Directive (Appendix C).

4.1.7 Contracting authorities may enter into contracts in response to a pressing emergency in accordance with Part III of the Treasury Board Contracts Directive on condition that details of the use of this authority are reported to the Treasury Board Secretariat within 60 days of the authorization or beginning of the work.

4.1.8 Public servants who have been delegated authority to negotiate and conclude contractual arrangements on behalf of the Crown must exercise this authority with prudence and probity so that the contracting authority (the minister) is acting and is seen to be acting within the letter and the spirit of the Government Contracts Regulations, the Treasury Board Contracts Directive and the government's procurement policies, the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade.

4.1.9 With respect to contracting for services, contracting authorities must:

1. ensure that the statement of work or the requirements description clearly describes the work to be carried out, the objectives to be attained and the time frame;

2. ensure that an employer-employee relationship will not result when contracting for the services of individuals in accordance with criteria established by the Canada Customs and Revenue Agency and pertinent court rulings;
3. ensure that the fees paid do not exceed the appropriate market rate for the service provided;
4. Deleted.
5. ensure that contracts for the services, awarded competitively or non-competitively, of former public servants in receipt of a pension or a lump sum payment (or both) reflect sound contracting practices, including fairness in selection and compensation. No contract for the services of a former public servant in receipt of a pension or a lump sum payment may be entered into unless the contracting authority is satisfied that it is in the public interest.

4.1.10 The Government Contracts Regulations as amended (refer to Appendix B) require that contracts for the performance of legal services may be entered into only by or under the authority of the Minister of Justice. Accordingly, while it is recognized that lawyers may be engaged for purposes other than the performance of legal services, the Department of Justice must be consulted in every case where a contract for services is entered into with a practising member of the bar, to determine whether the contract is for legal services and thus whether the approval of the Department of Justice is required. No contracting authority may enter into a contract for services with a practising member of the bar without first having obtained the approval of the Department of Justice, or having been advised by the Department of Justice that the contract does not involve legal services.

4.1.11 If a contracting authority enters into a contract without Treasury Board approval when such approval should have been obtained, ratification by the Treasury Board must be sought as soon as possible.

4.2 Related requirements

4.2.1 There are a number of other government policies as well as administrative practices which must be observed in relation to the contracting policy requirements. Many of these administrative requirements follow from the applicability of other laws, policies, conventions and procedures which are of themselves outside of the policy on contracting for goods, services and construction. This article provides an overview of these other policies; the guidelines and appendices contain additional information.

4.2.2 Conviction under Sections 121, 124 and 418 of the Criminal Code denies the capacity to contract with the Crown, unless the Governor in Council under Section 748(3) has restored (in whole or in part) this capacity to the individual or the individual has been granted a pardon.

4.2.3 Public servants must not only act within the law at all times but also must act as though the Criminal Code of Canada were in force in all places where they engage in commercial transactions on behalf of the government. Accepting of bribes or other improper influence is specifically prohibited.

4.2.4 Where applicable, contracting authorities are to observe the provisions of the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade, as amended from time to time.

4.2.5 The Federal Contractors Program for Employment Equity stipulates certain conditions when contracting for goods and services worth $200,000 or more with a contractor employing 100 or more people (see Appendix D).

4.2.6 Pursuant to paragraph 221(1)(d) of the Income Tax Act, payments exceeding $500.00 made by departments and agencies under applicable service contracts, including contracts involving a mix of goods and services, must be reported on a T1204 supplementary slip. Refer to sections 16.14 and 16.15 for details associated with this requirement.

4.2.7 The Common Services Policy provides that departments and agencies must obtain goods and certain services from common service organizations only, unless exception is made by direction, through other Treasury Board policies, within specific departmental legislation, or in the provisions of the Common Services Policy.

4.2.8 Section 9 of the Department of Public Works and Government Services Act gives the Minister of Public Works and Government Services exclusive responsibility for the procurement of all goods as described in the Act. Other departments and agencies may only procure goods either when their own legislation specifically permits or when an appropriate delegation of authority has been made by the Minister of Public Works and Government Services.

4.2.9 Where applicable, contracting authorities are to observe the requirements of the Procurement Strategy for Aboriginal Business.

4.2.10 Contracting authorities are to observe the provisions of the government Security Policy.

4.2.11 All contracts must contain appropriate clauses to permit the payment of interest in accordance with the Policy on Payment Requisitioning and Payment on Due Date, as well as the applicable Goods and Services Tax and the Harmonized Sales Tax.

4.2.12 All contracts must contain appropriate clauses to reflect the requirements of the government's Policy on Conflict of Interest and Post-Employment (see Appendix G).

4.2.13 When a contractor defaults, any contract financial security shall be redeemed and applied to compensate the Crown to the limit permitted in the contract.

4.2.14 Contracting authorities cannot assume or acquire the powers or authority of any department, branch or agency of the Government of Canada to which they provide services such that they acquire greater powers and authority than those conferred by their own legislation or other applicable statutes or regulations.

4.2.15 Departments must ensure that adequate management controls are in place to protect the integrity of the bidding process. It is recognized that the bidding process may employ either traditional hard copy documents or electronic bid documents. In either situation, in order to stand the test of public scrutiny in matters of prudence and probity, Departments must have the ability to demonstrate that all bid materials are received on time and in the manner prescribed in the tender/solicitation documents. In the case of electronic bids, Departments must also ensure that the documents are not altered, forged, changed or corrupted either intentionally or by error. If a contracting authority suspects that collusion or bid rigging has taken place in the bidding process, it shall notify Industry Canada.

4.2.16 The Treasury Board Travel Directive applies to travel costs incurred by contractors when these costs are a specific element of the contract.

4.2.17 The Standard Federal Government Construction Contract should be used for all construction contracts that exceed $100,000. The basic policy governing the principles and expression of policy in the Standard Federal Government Construction Contract is the prerogative of the Treasury Board. However, the style and content of the form is the responsibility of the Department of Public Works and Government Services Canada.

4.2.18 Deleted.

4.2.19 When contracting for temporary help services (administrative support and other categories) contracting authorities should give consideration to obtaining these services directly from companies with which the Department of Public Works and Government Services has entered into temporary help standing offers. Contracting authorities have the option of acquiring temporary help through a standing offer established by Public Works and Government Services Canada, or by dealing directly, by means of a separate departmental standing offer or a contract with other suppliers. Further information on the existence of temporary help standing offers may be obtained from the Department of Public Works and Government Services.

4.2.20 When contracting for the services of former public servants in receipt of a pension paid pursuant to the Public Service Superannuation Act (PSSA), or in receipt of a lump sum payment, discretion is to be exercised to ensure that the public perception is not one of favouritism to these individuals. For this reason, all contracting authorities are to conform with the special operating procedures in article 16.8.

4.2.21 All contracts for public opinion research and advertising must be entered into according to the requirements set out at section 16.13 of the Contracting Policy.

4.2.22 When applicable, contracting authorities are to implement the contract priority provisions of the James Bay and Northern Quebec Agreement (JBNQA) and the JBNQA Implementation Agreement (1990), referred to together as "the Agreement", in relation to all contracts awarded by the Crown in the Territory. The policy and implementation measures (prescribed in Appendix T) shall be carried out in a manner that recognizes the developing nature of the economy and labour force in the Territory. The policy, as expressed in the Agreement, applies to and is to take all reasonable measures to encourage Inuit participation in all contracts. The policy applies to all contracts that are created by projects initiated or conducted in the Territory, by the Crown or its agents, delegates, contractors or subcontractors.

4.2.23 In all contractual situations, the ownership of intellectual property must be addressed (if relevant ) in line with current policy prior to contract award. All relevant contracts must contain clauses indicating the ownership of intellectual property.

4.2.24 In the Province of Ontario, federal contracting authorities are required to observe the intent and follow the provisions of the Ontario legislation concerning the protection of jobs and the level of benefits of workers who work primarily at one specific site to provide building cleaning, food and security services. See Appendix E.

4.2.25 Contracting authorities may negotiate and approve employee takeover contracts up to $10 million for both competitive and non-competitive contracts. However, every contracting authority must submit its first case over $1 million to Treasury Board for approval, to ensure that the department has established an adequate process for handling employee takeovers, which meet government-wide standards. See Appendix C.

4.2.26 The Government Contracts Regulations have been amended to allow Contracting Authorities to set aside the bidding requirements in the Regulations when procuring certain printing and other services from the new owner of Canada Communications Group, Canada Communications Group Inc. (CCG Inc.). In effect these amendments allow departments and agencies to use the services of CCG Inc., on an optional basis, in much the same way as they used the services of CCG. The amendments are for five years from the effective date of the Order in Council, March 7, 1997. See Appendix C.

5. Monitoring

5.1 Reporting mechanisms

5.1.1 It is the responsibility of departments and agencies to ensure that adequate control frameworks for due diligence and effective stewardship of public funds are in place and working. Treasury Board Secretariat works with departments and agencies to address management issues and compliance with Contracting Policies identified through its ongoing relationships with departments, management reviews, evaluations, internal audits and transactions.

5.1.2 All departments and agencies awarding contracts and/or amendments, are required to submit an annual report to the Treasury Board Secretariat on all contracting activities (see Appendix K for details).

5.1.3 Also, as part of the obligations of the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade, contracting authorities are required to report certain statistics. These statistics are collected from the contract coding information provided by contracting officers on each procurement. Thus, accurate coding of the applicable agreements, goods, services or construction code, tendering method, limited tendering reasons and contract award details is essential to demonstrate the federal government's compliance with the agreements to the other countries or provinces that are parties to the agreement.

5.2 Audit and evaluation

5.2.1 Where appropriate, contracting authorities should include a right-to-audit clause to ensure that verification of the amount paid is correct.

5.2.2 Contracting authorities are to ensure that contract files are properly documented.

6. References

6.1.1 In addition to the Financial Administration Act, the following acts, regulations and policies also apply specifically to contracting for goods and services, and construction by departments:

1. the Access to Information Act, Bankruptcy Act, Bills of Exchange Act, Canadian Charter of Rights and Freedoms, Competition Act, Criminal Code, Defence Production Act, Department of Justice Act, Department of Public Works and Government Services Act, Fair Wages and Hours of Labour Act, Federal Real Property Act, Official Languages Act, Privacy Act, the Status of the Artist Act, and the Public Service Employment Act;

2. the North American Free Trade Agreement, the World Trade Organization - Agreement On Government Procurement, the Internal Trade Agreement, the Conflict of Interest and Post-Employment Code for Public Office Holders (1994), the Security Policy, the Federal Contractors' Program for Employment Equity and policies related to the avoidance of price fixing;
3. the policies and guidelines found in the Treasury Board Manual.

6.1.2 This policy is issued pursuant to paragraph 7(1)(a) and sub-section 41(1) of the Financial Administration Act, the Government Contracts Regulations as amended, the Treasury Board Delegation of Powers Order, SOR 86-1123, and the Treasury Board Contracts Directive.

6.1.3 This policy as well as the appendices contained in this volume are to be read in conjunction with the provisions of statutory law as well as evolving judicial decisions that establish precedence in the application of the law.

6.1.4 The present document contains the text of the Contracting Policy. It was last updated on June 9, 2003, and replaces the former document dated December 21, 2001.

7. Enquiries

For interpretation of this policy, its supporting documents and implementing Regulations, or for questions about related submissions to the Treasury Board, contact the Executive Director, Procurement and Project Management Policy Directorate, Comptrollership Branch, Treasury Board Secretariat.

8. Procedural requirements - general

8.1 Authorities

8.1.1 The authority for departmental contracts is generally in the legislation constituting the department and conferring certain powers on the minister. This authority is reinforced by the Appropriation Acts passed by Parliament each year which, inter alia, provide funds to carry out the departmental mandate. Subsection 41(1) of the Financial Administration Act provides for the establishment of financial limits above which Governor in Council or Treasury Board approval is required.

8.1.2 The Government Contracts Regulations were approved by the Governor in Council on June 30, 1987, P.C. 1987-1355, on the recommendation of the Treasury Board, pursuant to subsection 41(1) of the Financial Administration Act. These Regulations have been subsequently amended on a number of occasions (see Appendix B for the current text).

8.1.3 The Treasury Board Contracts Directive, which prescribes the dollar levels above which Treasury Board authority is to be obtained, is contained in Appendix C.

8.1.4 All dollar levels in Appendix C are inclusive of all applicable taxes (including GST and HST).

8.2 Roles and responsibilities

8.2.1 Role of ministers. The minister is ultimately responsible to Parliament for all contracting activity. Each minister customarily delegates contracting authority to various levels within the department or agency. As stated in article 4.2, Related Requirements, officials delegated such authority are to exercise it with prudence and probity so that the responsible minister is acting and is seen to be acting within the letter and the spirit of the Government Contracts Regulations and the Treasury Board's contracting directives.

8.2.2 Common service organization (CSO). In some cases, the procurement of goods, which is the responsibility of the Minister of Public Works and Government Services, has been delegated to other ministers. In addition, the Treasury Board, pursuant to sub-section 7(1) of the Financial Administration Act, has directed that certain goods and services be procured through a CSO. (See the Treasury Board's policy on common services.)

8.2.3 Treasury Board Advisory Committee on Contracts (TBACC) considers matters involving the form and procedure of government contracts or the policy and guidelines on contracting that may be referred to it, or where the TBACC sees the need for change or clarification.

8.2.4 The work of TBACC, is undertaken by two subcommittees:

1. Construction Contracting Sub-Committee - matters related to realty and construction; and

2. Contracting General Sub-Committee - materiel and equipment, including repair and overhaul, and other issues not related to realty and construction.

8.2.5 Specialized working groups may be established to investigate and advise in areas of special interest.

8.3 Employment equity

8.3.1 As stated in article 4.2, Related requirements, when contracting for goods and services worth $200,000 or more with a contractor employing 100 or more people, departments and agencies are to adhere to the conditions of the Federal Contractors' Program for Employment Equity set out in Appendix D.

8.4 International Sanctions

8.4.1 Persons and companies in Canada are bound by economic sanctions imposed by Canada by regulations passed pursuant to the United Nations Act. As a result, the Government of Canada cannot accept delivery of goods or services that originate, either directly or indirectly, from the countries, entities or individuals subject to economic sanctions. Departments may obtain a list of sanctions from the Foreign Affairs and International Trade Canada site (http://www.dfait-maeci.gc.ca/trade/sanctions-en.asp). Contracting authorities must ensure that all contracts entered into pursuant to the Government Contracts Regulations contain a condition that prohibits the contractor from supplying to the Government of Canada any goods or services subject to economic sanctions. During the performance of any contract, should there be an addition to the list of sanctioned countries, entities or individuals or an addition to the list of sanctioned goods or services that causes an impossibility of performance for the contractor, the situation will be treated as a force majeure. All contracts must also contain a provision that requires the contractor to inform Canada of the existence of such a situation. Contracting authorities are advised to consult with legal counsel to determine the appropriate course of action in the event of a force majeure situation.

8.5 Official languages

8.5.1 As stated in article 6.1.1(a), the Official Languages Act and related policies and directives are to be observed in the contracting process. See Appendix F for details.

8.6 North American Free Trade Agreement (NAFTA)

8.6.1 Canada has agreed to apply the provisions of NAFTA, which is a multilateral agreement to reduce trade barriers between Canada, the United States of America and the Federal Republic of Mexico. Chapter 10 of NAFTA aims to achieve greater competition and transparency in government procurement, and to eliminate both protection of domestic products or suppliers, and discrimination among foreign products or suppliers.

8.6.2 Preferential treatment policies may only be applied to procurement before the applicable thresholds or if the particular procurement is excluded, excepted, a derogation or a set-aside from the trade agreements.

8.6.3 Deleted

8.7 The World Trade Organization - Agreement on Government Procurement (WTO-AGP)

8.7.1 The WTO-AGP is a multilateral agreement that aims to secure greater international competition for government procurement. The WTO-AGP came into effect on January 1, 1996. Member countries include Canada, the European Communities, the United States, Japan, Korea, Israel, Norway and Switzerland. The WTO-AGP replaces the General Agreement on Tariffs and Trade (GATT) Government Procurement Code by extending the previous coverage of goods to include services and construction. The national treatment and non-discrimination provisions and procurement procedures of the WTO-AGP are similar to those of NAFTA.

8.7.2 Deleted.

8.8 Agreement on Internal Trade (AIT)

8.8.1 The AIT is an agreement on Canadian internal trade, which aims to reduce barriers to trade within Canada. It was signed by the 10 provinces and 2 territories and came into effect on July 1, 1995. Chapter 5 of AIT is intended to create a system that will allow fairness and equal access to government procurement for all Canadian suppliers in order to reduce cost, and develop a strong economy.

8.8.2 Deleted.

8.9 Common services

Role of common service organizations (CSOs) in government contracting.

A vital aspect in government contracting is the role played by CSOs and their relationships with client departments at all stages in the life-cycle management of goods and services. When the interests of the government can best be met by centralized acquisition, the policy on common services provides that procurement be carried out by the designated mandatory CSO unless the services are designated optional or an exception has been granted. The policy roles, responsibilities and relationships in the provision and receipt of common services respectively by CSOs and their clients are governed by the Treasury Board's policy on common services. This part addresses more detailed aspects of the CSO-client relationship.

8.9.1 Details of the CSO-client relationship will normally be covered in general memoranda of understanding (MOU) applicable to the CSO and its client departments. These may be adjusted to suit particular CSO-client agreements. Acquisitions of a special or significant nature may require specific MOUs and more detailed treatment such as that outlined in the policy on Major Crown Projects. Clients are generally responsible for determining what they want, where and when; the CSO is normally responsible for determining how services will be provided to meet the needs of clients.

8.9.2 In terms of life-cycle management, this means that:

1. requirements definition is, in varying degrees, a client responsibility depending on government policy and the type of goods or services. By and large, the more technically complex, special, or unique the requirement, the more it will be a client responsibility to define; conversely, the more common an item, the less need for client input except, for example, to specify the quantity;

2. acquisition is the CSO responsibility;
3. use is the client responsibility;
4. disposal of goods is the CSO responsibility.

This does not mean each party functions in isolation. On the contrary, in the MOU it is essential that there be well-established lines of communication at all stages in the life-cycle, reflecting the CSO-client division of responsibilities.

8.10 Energy Management

8.10.1 The Treasury Board has authorized any contracting authority to enter into and amend a service contract to acquire energy services pursuant to the Federal Building Initiative Policy, which may include energy supply, energy efficiency improvements, management services, energy management monitoring and training, if the total under the contract, including any amendments does not exceed $25 million on condition that the their first energy management contract over $1 million is submitted to the Treasury Board for approval. See Appendix O.

8.11 Lobbyists and Contracting

8.11.1 Contractors who do business with the government must not retain lobbyists whom they pay on a contingency basis. This means that lobbyists must not be paid a fee or compensation related to the value of the contract. If lobbyists are retained in connection with a proposed or actual contract with the Crown, they should be paid on a fee for services or retainer basis. See Appendix M.

9. Best value

9.1 General

9.1.1 As stated in the policy, the objective of government procurement contracting is 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 the Crown and the Canadian people. Inherent in procuring best value is the consideration of all relevant costs over the useful life of the acquisition, not solely the initial or basic contractual cost.

9.1.2 The clear identification of the requirements associated with the decision to contract is of primary importance. There are acquisitions in which the requirements and specifications are clear, the records of likely suppliers are relatively uniform and discretionary judgement is at a minimum; price or cost is therefore the primary consideration. However, other procurements call for greater judgement and it is unwise to focus simply on price or lowest initial cost (in recognition of this fact, the higher competitive authorities may be used for service contracts in which the lowest or best value bidder is selected - see definition of competitive contract in Appendix A). Often, the goods or services offered by different suppliers are not identical. Assessments and trade-offs should be made between different performance characteristics, costs, dates of delivery, service, follow-on procurement and logistic support. Equally important are those cases in which a product or facility has been designed to meet specific government requirements. In such instances, detailed analysis of materials and components in terms of their function and price may be needed before the contracting process. This should clarify the requirement which should, in turn, result in best value.

9.1.3 The analysis necessary to achieve best value should not be confined to the actual procurement process; it should begin in the planning and appraisal of alternatives and continue through the definition of requirements which would include assessment and award criteria, evaluation of sources, selection of contractor, preparation, negotiation, execution and award of contract, contract administration and post-contract evaluation. Sophisticated evaluation techniques, such as cost/benefit analysis, may be needed to define the best combinations of quality, service and time considerations, at the lowest total cost over the useful life of the acquisition.

10. Bidding and selection

10.1 The Government Contracts Regulations

10.1.1 As required by Section 5 of the Government Contracts Regulations, the contracting authority is to solicit bids before any contract is entered into. The competitive approach in determining a contractor should therefore be the norm. Because it is not always possible, practical, or cost effective to seek bids for every proposed contract, Section 6 of the Government Contracts Regulations permits certain exceptions.

10.1.2 Departments and agencies should not accept bids from one another or from the provinces, municipalities, territories or Crown Corporations unless the department, agency or Crown Corporation bidding is authorized by policy or statute. Departments and agencies may, pursuant to section 3 of the Contracting Policy, arrange transactions that involve the transfer of goods, services or real property between departments, Crown Corporations, provinces, municipalities and the Territories.

10.2 Exceptions

10.2.1 Section 6 of the Government Contracts Regulations contains four exceptions that permit the contracting authority to set aside the requirement to solicit bids. These are:

1. the need is one of pressing emergency in which delay would be injurious to the public interest;

2. the estimated expenditure does not exceed

   • $25,000,

   • $100,000, where the contract is for the acquisition of architectural, engineering and other services required in respect of the planning, design, preparation or supervision of the construction, repair, renovation or restoration of a work, or
   • $100,000 where the contract is to be entered into by the member of the Queen's Privy Council for Canada responsible for the Canadian International Development Agency and is for the acquisition of architectural, engineering or other services required in respect of the planning, design, preparation or supervision of an international development assistance program or project;

3. the nature of the work is such that it would not be in the public interest to solicit bids; or

4. only one person or firm is capable of performing the contract.

10.2.2 In exception (a), a pressing emergency is a situation where delay in taking action would be injurious to the public interest. Emergencies are normally unavoidable and require immediate action which would preclude the solicitation of formal bids. An emergency may be an actual or imminent life-threatening situation, a disaster which endangers the quality of life or has resulted in the loss of life, or one that may result in significant loss or damage to Crown property.

10.2.3 Exception (b) sets specific dollar limits below which a contracting authority may set aside the competitive process. However, contracting authorities are expected to call for bids whenever it is cost effective to do so. When the proposed contract is estimated to exceed the dollar limits, the contracting authority is to call for bids.

10.2.4 Exception (c) should normally be reserved for dealing with security considerations or to alleviate some significant socio-economic disparity. For example, the preservation of a certain source of supply may be necessary to ensure that future needs of government can be met. This exception should be invoked only with the approval of senior management as delegated by the contracting authority (the minister).

10.2.5 Exception (d) sets competitive bidding aside when only one person or firm can do the job. This exception is quite definitive and should be invoked only where patent or copyright requirements, or technical compatibility factors and technological expertise suggest that only one contractor exists. This exception should not be invoked simply because a proposed contractor is the only one known to management.

10.2.6 Any use of the four exceptions to the bidding requirement should be fully justified on the contract file or, where applicable, in submissions to the Treasury Board. Even if a proposed directed contract (see Appendix A) for goods and services qualifies under one of these four exceptions, the contracting authority is encouraged, whenever possible, to use the electronic bidding methodology to advertise the proposed award through an Advance Contract Award Notice (ACAN). If no statements of capabilities meeting the requirements set out in the ACAN are received within fifteen calendar days, the proposed contract is deemed to be competitive and may be awarded using the electronic bidding contracting authority.

Should the contracting authority have to seek the Treasury Board's approval to award such a contract, it should be noted that the Treasury Board cannot approve a directed contract which does not meet at least one of the four exceptions. In such cases, an exception to the Regulations by means of an Order In Council would be required.

10.2.7 As required by the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade, the contracting authority shall solicit bids before any contract over the respective agreements thresholds is entered into. Because it is not always possible to seek bids for every proposed contract, the following exceptions to bidding are permitted.

10.2.8 The North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade permit the contracting authority to set aside the requirement to solicit bids under the following conditions:

1. in the absence of tenders in response to an open or selective tender, or where the tenders submitted either have resulted from collusion or do not conform to the essential requirements of the tender documentation, or where the tender submitted comes from suppliers that do not comply with the conditions for participation, on condition that the requirements of the initial procurement are not substantially modified in the contract as awarded;
2. for works of art, reasons connected with protecting patents, copyrights, other exclusive rights, or proprietary information or where there is an absence for technical reasons, the goods or services can be supplied by a particular supplier and no reasonable alternative or substitute exists;
3. in so far as is strictly necessary where, for reasons of extreme urgency brought about by events the contracting authority could not  foresee, the goods or services could not be obtained in time by means of open or selective tendering procedures;
4. for additional deliveries by the original supplier that are intended either as replacement parts or continuing services for existing supplies, services or installations, or as the extension of existing supplies, services or installations, where a change of supplier would compel the contracting authority to procure equipment or services not meeting requirements of interchangeability with existing equipment or services, including software to the extent that the initial contract for the software was covered by the agreements;
5. where a contracting authority procures a prototype or a first good or service that is developed at its request in the course of and for a particular contract for research, experiment, study or original development. Original development of a first good may include limited production to incorporate the results of field testing and to demonstrate that the good is suitable for production in quantity to acceptable quality standards, but does not include quantity production to establish commercial viability or to recover research and development costs. Where such contracts have been fulfilled, subsequent procurement of goods or services shall be competed, where applicable;
6. for goods purchased on a commodity market;
7. for purchases made under exceptionally advantageous conditions that only arise in the very short term, such as unusual disposals by enterprises that are not normally suppliers, or disposal of assets of businesses in liquidation or receivership, but not routine purchases from regular suppliers;
8. for a contract to be awarded to the winner of a design contest, as long as the contest is:
   1. organized in a manner consistent with the principles of openness and fairness and is publicly advertised to suitably qualified suppliers to participate in the contest (For procurements subject to NAFTA only, the design contest is specifically architectural);
   2. organized so that the design contract is awarded to the winner;
   3. judged by an independent jury (For procurements subject to AIT only, conditions for an independent jury are not required);
9. where a contracting authority needs to procure consulting services regarding confidential matters, the disclosure of which could reasonably be expected to compromise government confidences, cause economic disruption or similarly be contrary to the public interest (NAFTA and/or AIT only).

10.2.9 In addition to the preceding exemptions, the following are exemptions to bidding for procurement subject to WTO-AGP only:

1. when additional construction services that were not included in the initial contract but that were within the objectives of the original tender documentation have, through unforeseeable circumstances, become necessary to complete the construction services described therein, and the contracting authority needs to award contracts for the additional construction services to the contractor carrying out the construction services concerned since the separation of the additional construction services from the initial contract would be difficult for technical or economic reasons and be significantly inconvenient to the contracting authority. However, the total value of contracts awarded for the additional construction services may not exceed 50 per cent of the amount of the main contract; and
2. for new construction services involving repeating similar construction services that conform to a basic project for which an initial contract was awarded in accordance with the proper procedures for which the contracting authority has indicated in the notice of intended contracts concerning the initial construction service, that limited tendering procedures might be used in awarding contracts for such new construction services.

10.2.10 In addition to the exemptions listed in 10.2.9, the following are exemptions to bidding for procurement subject to AIT only:

1. where a contract is to be awarded under a cooperation agreement that is financed, in whole or in part, by an international cooperation organization, only to the extent that the agreement between the Party and the organization includes rules for awarding contracts that differ from the obligations set out in Chapter 5 of the AIT;
2. where construction materials are to be purchased and it can be demonstrated that transportation costs and technical considerations impose geographic limits on the available supply base, specifically in the case of sand, stone, gravel, asphalt, compound and pre-mixed concrete to build or repair roads;
3. where normal procurement procedures would interfere with a Party's ability to maintain security or order or to protect human, animal or plant life or health;
4. where only one supplier can meet the requirements of a contract, the procurement is exempt from the AIT in the following circumstances:
   1. for procuring goods or services, the supply of which is controlled by a supplier that is a statutory monopoly;
   2. for work to be performed on or about a leased building or portions thereof that may be performed only by the lessor;
   3. for work to be performed on property by a contractor according to provisions of a warranty or guarantee held in respect of the property or the original work;
   4. for the contracts of subscriptions to newspapers, magazines or other periodicals; and
   5. for procuring real property.

10.2.11 Under the AIT all services are covered except the following:

1. services that in the province issuing the tender may, by legislation or regulation, be provided only by any of the following licensed professionals: medical doctors, dentists, nurses, pharmacists, veterinarians, engineers, land surveyors, architects, chartered accountants, lawyers and notaries;
2. transportation services provided by locally-owned trucks for hauling aggregate on highway construction projects;
3. services for sporting events procured by organizations whose main purpose is to organize such events;
4. services of financial analysts or the management of investments by organizations that have such functions as a primary purpose;
5. financial services respecting the management of government financial assets and liabilities (i.e., treasury operations), including ancillary advisory and information services, whether or not delivered by a financial institution;
6. health and social services; and
7. advertising and public relation services.

10.2.12 The following are excluded from the AIT:

1. procuring goods intended for resale to the public;
2. procuring goods and services or construction purchased on behalf of an entity not covered by the AIT;
3. procuring from philanthropic institutions, prison labour or persons with disabilities;
4. procuring contracts between the federal and provincial governments;
5. procuring goods services or construction purchased for representational purposes outside the territory of a Party of the AIT;
6. procuring any goods the interprovincial movement of which is restricted by laws consistent with the AIT;
7. procuring subscriptions to newspapers or other periodicals.

10.3 Acquisition

10.3.1 As stated in Section 4, Policy requirements, Contracting authorities are to ensure that:

1. work descriptions or specifications are to be defined in terms that accommodate the use of the competitive process whenever feasible, result in best value in meeting the need and establish, in advance, what is required of the supplier to perform the contract (requests for contracting actions should avoid specifying "sole-source");
2. whenever practical, an equal opportunity to compete exists for all firms and individuals, providing that they have, in the judgement of the contracting authority, the technical, financial and managerial competence to discharge the contract and meet, where appropriate, criteria established by overall national policies and objectives;
3. where not prohibited, under the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement and the Agreement on Internal Trade, criteria are to be established to encourage and assess socio-economic factors in relation to the total cost of a contract before bids are solicited, and solicitation documents are to give notice that socio-economic factors are to be used to assess bids when they are received.

Assessment and award criteria must be spelled out in the solicitation document.

10.4 Requirements definition

10.4.1 Best value is not confined to the contractual process; it is equally important at the requirements definition stage. For many acquisitions, especially for Major Crown Projects, it is at this earlier stage that best value may be achieved. Trade-offs should be made among factors such as quality, service, cost, procurability, and socio-economic considerations linked to a particular industry or region of the country. Quality and the desired performance level should be related to intended use. The most desirable technical quality or suitability is not necessarily the most desirable procurement because it may not be the most economical. In complex acquisitions, a cost/benefit analysis may balance technical quality against such factors as initial and operating costs, economic life, service, maintenance and repair.

10.4.2 Best value may be promoted if performance specifications are stressed; this avoids over-defining the requirement from a technical point of view. The custom of the trade, the effect of the competitive process and the different legal liabilities associated with them may affect the choice between defining a requirement in terms of detail or performance. A requirement defined in terms of detail (e.g., type and level, quality, material or method of workmanship) will often result in legal liability for defects shared with the contractor. On the other hand, a requirement defined in terms of performance normally results in the liability borne by the contractor alone for achieving the specified performance.

10.4.3 Departments and agencies should use nationally or internationally-recognized standards whenever possible and ensure that the requirements definition complies with applicable federal legislation, such as that relating to hazardous products and environmental protection. In the absence of an appropriate standard, it may be economical to use trade names or equivalents in defining requirements for minor or infrequent procurements. When this is done, departments and agencies should include all available trade names or equivalents in the requirements definition. The appropriate common service agency can be very helpful here.

10.5 Selection

10.5.1 Requirements should be defined and specifications and estimates established before bids are solicited and contracts let, so that all prospective contractors are treated equally. In acquiring complex capital equipment, construction or services, other procedures may help control time, cost and performance. Some of these are described below. The procurement method chosen should be indicated, with supporting justification, when contract approval is sought, whether within a department or agency or from the Treasury Board. Adequate specification details should be available to all interested or qualified firms.

10.5.1a Under the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement, technical specifications laying down the characteristics of the products or services to be procured, such as quality performance, safety and dimensions, symbols, terminology, packaging, marking and labelling, or the processes and methods for their production and requirements relating to conformity assessment procedures prescribed by the contracting authority, shall not be prepared, adopted or applied to create unnecessary obstacles to international trade. Technical specifications prescribed by contracting authorities shall, where appropriate:

1. be in terms of performance rather than design or descriptive characteristics; and
2. be based on international standards, where such exist; otherwise, on national technical regulations, recognized standards, or building codes.

10.5.1b Under NAFTA and WTO-AGP, there may be no requirement or reference to a particular trademark or trade name, patent, design or type, specific origin, producer or supplier, unless there is no sufficiently precise or intelligible way of describing the procurement requirements and provided that words such as "or equivalent" are included in the tender documentation.

10.5.1c As required by NAFTA and WTO-AGP, contracting authorities shall not seek or accept, in a manner which would have the effect of precluding competition, advice that may be used to prepare specifications for a procurement from a firm that may have a commercial interest in the procurement.

10.5.2 Traditional method. When a project is not complex and there is no significant interaction between the specification and the implementation phases, the design, specification, or requirement definition is completed separately, to the stage where the cost to implement can be accurately estimated. A contract may be awarded that involves only normal business risks. Departures from this traditional method may be justified if, for instance:

1. the extent to which time or other circumstances preclude defining all significant requirements before contracting;
2. the extent to which the requirement is beyond the state of the art;
3. the extent to which specifications do not represent standard commercial practice and no firms routinely provide the service; or
4. industry contributions to the requirement are needed.

10.5.3 Developer proposal. Here a contractor agrees to carry out a project jointly with the government which may contribute certain financial or technical resources. The project benefits the contractor beyond the contract price paid. This approach is warranted when the requirement can be obtained at reduced cost to the taxpayer or when benefits connected with other government socio-economic objectives are greater.

10.5.4 The following should be evaluated before proceeding:

• cost/benefit justification,
• socio-economic benefits,
• basis of selecting the contractor,
• description of the management system proposed,
• division of responsibility between department and contractor, and
• division of benefits between government and contractor.

10.5.5 Design/build or total package procurement. Here a firm-price contract is awarded based on a performance specification and the contractor is expected to complete a design, construct a facility or manufacture a product or perform a service. This method is warranted for relatively simple technical requirements where the need could respond to routine solutions and no extraordinary risk is involved in working within a firm price. Economies of price or of government effort may be possible by transferring detail specifications or design responsibilities completely to the contractor.

10.5.6 The following should be evaluated before proceeding:

• the degree of responsibility transferred to the contractor;
• the estimated cost under this approach compared to the traditional method; and
• the benefits expected from internal cost or time savings, design improvements or better performance.

10.5.7 Phased contracting. Here the overall requirement may be satisfied in stages. For example, separate production, service or construction contracts may be awarded to implement specific phases or components of a requirement. Individually, the separate contracts may be straightforward and may be handled under the traditional method. However, coordinating the contracts may involve considerable complexity. For example, system engineering techniques may be needed to ensure the individual contracts mesh properly and meet overall system performance objectives. This approach is warranted when the time that is likely to be saved has a value beyond the potential cost of the risk of beginning work before all of the requirements specifications or designs are completed.

10.5.8 The following factors should be evaluated before proceeding:

• the benefits of earlier completion or delivery;
• the related risks and contingent cost allowances; and
• the management structure proposed. For example, this may include construction management or project management.

10.5.9 Flexible price contracting. Sometimes because of unknown factors or postponed decisions, the requirements definition will remain flexible in its interpretations or details of the proposed work will be incomplete. A price basis may be formulated that caters to the unknown factors and/or the implications of the postponed decision, while ensuring that costs are controlled and value is received. Basis-of-price options are outlined in article 10.6. This method is warranted when early completion of the work or the state of the art do not permit firmer arrangements before contracting or when the phased contracting method would be impractical. This is typical of research and development, for instance, where the phases of the work are highly interdependent.

10.5.10 The following factors should be considered before proceeding:

• clear identification of the significant technical or other factors which, being unknown, constitute the basis for proceeding with this method;
• cost and time estimates for resolving the unknown factors, together with an assessed probability of their accuracy;
• likelihood of resolving unknown risks before committing major expenditures on other areas of the requirement; and
• the kinds of price formulas and management techniques that will best ensure adequate control over cost, time and performance under the specific circumstances.

10.5.11 Standing Offer. As defined in Appendix A, a standing offer is 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. Standing offers are established by competitive bidding or negotiation. A separate contract is entered into each time a call-up is made against a standing offer.

10.5.12 Because of the nature of a standing offer, quality specifications may be predetermined but it is usually not possible to give suppliers more than an estimate of the quantity that will ultimately be purchased under each call-up.

10.5.13 The standing offer method may be the best approach when there are many users ordering the same item or definable service across government and the goods or services are commercially available from local suppliers. The speedier procurement and the price advantages may be further enhanced by reduced administrative paperwork, and, in the case of materiel, the use of existing industry distribution facilities will eliminate the need to warehouse large inventories.

10.5.14 Standing offers are generally established by common service agencies for goods and services widely used by other government departments and agencies. However, all contracting authorities should consider the standing offer method to satisfy repetitive requirements.

10.6 Establishing price

10.6.1 The competitive process is the normal way to establish best value and price. However, it may be set aside and price established by other means.

10.6.2 The pricing of a requirement depends on how accurately it is defined. To demand an unduly firm price, in a situation where costs cannot be known accurately in advance, is to invite excess profit or loss to the contractor. Correspondingly, an unduly flexible price, for a requirement that may be defined accurately, removes some of the advantages of competition and could encourage inefficiency in contractors at government expense. It is equally important to good contract pricing:

• that the requirements definition be as complete as circumstances permit;
• that the price basis chosen be appropriate to that level of completeness; and
• that a bid price not consistent with historical norms or the majority of the bids received, be verified with the bidder prior to accepting that bid.

10.6.3 The following methods all accommodate competition:

• fixed lump sum,
• fixed unit price,
• target price, ceiling price and incentive fee formula,
• target price and incentive fee formula without ceiling price, and
• fixed time rate.

10.6.4 If it is other than a fixed lump sum, the price should clearly state whether a ceiling price is intended. Where applicable, the contract should state the limit beyond which the contractor must not spend without prior approval through a contract amendment. Ambiguity about whether a ceiling or a limitation of expenditure applies is a frequent cause of dispute.

10.6.5 If defining the requirement is so difficult that competition would not be meaningful, it may be necessary to use cost-plus-a-fixed-fee or cost-plus-a-percentage-of-cost as a basis of price. The latter should be avoided if at all possible and negotiation should continue until the contracting authority is sure that a satisfactory basis for contracting has been achieved.

10.6.6 When negotiating with more than one firm, care should be taken that all are treated fairly and impartially. The negotiations should not become an auction of the contract, as firms progressively improve their proposals in the light of information about the position of other firms. The confidentiality of each firm's negotiating position is to be assured.

10.6.7 Occasionally, a contract may be awarded with the price to be negotiated later when certain requisite information becomes available. The information may comprise important elements of the requirements definition that cannot be completed in time, or the cost of the first part of the order is needed as a basis for negotiating a firm price for the balance. This form of contract should be considered as a substitute for a cost-plus-fixed-fee contract when there is a definite prospect that the price basis can be improved as the work proceeds.

10.6.8 The competitive process is usually a reliable method because a contractor will include in the bid elements representing costs, overhead, profit and contingencies. However, in some situations such as unstable market conditions, one or more elements may be subject to such extreme fluctuations in price that neither buyer nor seller would be confident in accepting a fixed price over an extended period of time. While some commodities are subject to continuing price fluctuations, contracting specialists usually know what these commodities are and have developed standard techniques to mitigate the risks.

10.6.9 If the price of normally stable commodities and services begin to fluctuate, the contracting authority should try to reduce the risk while minimizing the erosion of fixed prices by:

1. postponing the procurement;
2. using substitute materiel;
3. giving contractors advance information on requirements in order to benefit from their ability to control costs by planning and making full use of the commodity futures market in appropriate circumstances;
4. reducing the period of term contracts, or the quantities ordered on production contracts;
5. increasing production rates to compress the duration of contracts;
6. reducing the administrative time allowed in the procurement process (solicitation, award decision, issuance of contract and authority to commence work);
7. procuring the unstable element separately (in the construction industry this technique is known as pre-tendering.); and
8. isolating the unstable element and providing for price adjustment according to a reliable, predetermined formula such as an established economic index.

10.6.10 Multi year/phase contracts. All contracts should specify the rate(s) of payment or unit price(s) for the entire period and/or quantity required, including all phases and specified option periods or quantities. When this is not possible, as with some multi-phase, multi-year or renewable (option year) contracts, payments for each year or phase should be based on a pre-agreed rate or formula that is spelled out in the "terms of payment". In addition, measures should be included to ensure the contractor performs in accordance with the contract and to avoid disputes. Appropriate increases for time periods or quantities that cannot be established when the contract is signed should be defined in the terms of payment using a rate or formula that may depend on data that can be established only through audits, rate negotiations or limited escalation clauses based on appropriate indices.

10.6.11 Federal taxes. Contracts and requests for bids or proposals should require the bidder or contractor to include an allowance for all applicable taxes, permits and fees. It may also be wise to include a provision to cover tax rebates (i.e., where taxes, allowed in the price, were not paid, owing to the grant of a tax rebate).

10.6.12 The request for bids or proposals should provide for tax increases or decreases arising from changes in the appropriate legislation that are announced after a bid has been submitted. This will allow changes to the cost elements to be reflected in the actual contract. Tax increases or decreases which are announced and put into effect after the contract is awarded may be handled by an amendment to the contract.

10.6.13 Provincial and municipal taxes and fees. Agreements have been reached between the federal government and several provincial governments to implement a reciprocal taxation program. The Comptrollership volume of the Treasury Board Manual describes the relevant administrative procedures.

10.6.14 Foreign taxes. The circumstances surrounding the payment of foreign taxes are variable and complicated. Whenever this possibility arises, contracting authorities should seek the advice of the Department of Justice before a contract is signed in order to avoid difficulties later. Bidding documents, requests for proposals and contracts should require the tenderer or contractor to include in the price an allowance for all applicable taxes, permits and fees.

10.6.15 Where applicable, bidders should make provision for appropriate travel and living expenses related to the proposed contract. These travel and living expenses should follow the contractor's established policy. However, as stated in article 4.2, Related requirements, under no circumstances may the amounts paid exceed the maximum permitted in the Treasury Board Travel Policy. Travel and living expenses are part of the total cost of the contract.

10.6.16 Contracting authorities shall not structure a procurement, select a valuation method, or divide procurement requirements in order to avoid the obligations of the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement and the Agreement on Internal Trade.

10.6.17 In determining the value of a contract under the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement and the Agreement on Internal Trade, the valuation shall take into account all forms of remuneration, including premiums, fees, commissions, taxes and interest receivable.

10.6.18 Under the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement, if an individual requirement for a procurement results in the award of more than one contract or a contract awarded in separate parts, the basis of valuation shall be either:

1. the actual value of similar recurring contracts concluded over the previous fiscal year or 12 months adjusted, where possible, for anticipated changes in quantity and value over the subsequent 12 months; or
2. the estimated value of the recurring contracts in the fiscal year or 12 months subsequent to the initial contract.

10.6.19 Under NAFTA and WTO-AGP, in cases of contracts for lease, rental or hire purchase of products or services, or in the case of contracts that do not specify a total price, the basis for valuation shall be:

1. in the case of fixed-term contracts, where their term is 12 months or less, the total contract value for their duration, or, where their term exceeds 12 months, their total value including the estimated residual value; and
2. in the case of contracts for an indefinite period, the monthly instalment multiplied by 48.

10.6.20 The value of the requisition including the Goods and Services Tax is to be used when determining whether or not a procurement is subject to a national or international trade agreement. For purposes of determining coverage, a procurement is considered to be one for goods, services, or construction, based on which represents more than 50 per cent of the estimated value of the requisition.

10.7 Soliciting bids and selecting a contractor

10.7.1 Equal opportunity for all contractors. In accordance with the policy statement to reflect fairness in spending public funds and the requirements under the trade agreements, the method of procurement used for a particular acquisition must, within the limits of practicality, give all qualified firms an equal opportunity for access to government business. For all procurements, especially those subject to the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, and the Agreement on Internal Trade, all parties must be given an equal opportunity to access government business. Therefore, contracting authorities should ensure that potential contractors are identified. Whenever projects are advertised, the area of coverage should not be so narrow that it inhibits free competition. If fewer than three respondents are reached by established advertising practices, the advertising coverage or bid solicitation should be increased. Contracting authorities that keep source lists from which bids are invited, may find it in their interests to establish a regular way to inform industry of this practice. This might take the form of periodic briefings to industry associations accompanied by adequate publicity, departmental public information brochures adequately circulated, newspaper and trade journal advertisements, electronic media advertisements, etc. For example, a contracting authority can use, inter alia, the electronic bidding system, and may supplement this by direct solicitation in order to maximize the involvement of the most qualified suppliers of goods and services.

10.7.2 Contracting authorities should note that when a combination of solicitation processes is used together, it is essential that they

1. commence and close on the same dates;
2. provide potential suppliers with the same information; and
3. impose identical obligations on these suppliers.

10.7.3 The following is a description of the various selection methods that may be used.

10.7.4 Advertisement in the public press. This method is appropriate:

1. when it is a custom generally followed by the trade involved; or
2. when the contracting department or agency considers it the most effective means of ensuring adequate competitive response.

10.7.5 Mailing lists. This method is appropriate:

1. to support national policies and objectives;
2. when it is customary in the trade for suppliers to be listed by potential buyers; or
3. when goods or services in common commercial supply are involved and it can be assumed that most firms in the business can meet the requirements.

10.7.6 Source lists. For procurements subject to the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement, source lists may be used for selective tendering. Contracting authorities may also establish source lists of competent suppliers that are representative of the suppliers of the required goods or services. When the source list contains many firms, they should be pre-selected in rotation through the list, from procurement to procurement, in an equitable manner. Electronic media may be used to advertise in order to develop an appropriate list of suppliers. In addition, rotational selection of qualified individuals or firms by computer may also be used.

10.7.6a Under the Agreement on Internal Trade, source lists shall:

1. include information in its policies, procedures and practices describing the circumstances and manner in which the source list is used and any qualification criteria that a supplier must meet to register on the source list;
2. provide written confirmation of registration to any supplier that requests registration on the source list or indicate the qualification criteria that were not met; and
3. on request by any Party of the AIT, provide that Party with the tenders notice and the list of suppliers that will be invited to bid on a specific tender.

10.7.7 Solicitation by electronic media. Electronic media may be used to solicit bids or to give public notice of (i) a call for bids in respect of a proposed contract or (ii) an intention to award a directed contract (using an Advance Contract Award Notice). The use of electronic media enables instantaneous notification of suppliers of the opportunity to bid and facilitates bid submission by those who are interested. This method is particularly suitable as an expeditious approach to competitive procurement. Depending on the circumstances, this sourcing method may be supplemented by the use of more traditional methods of calling for bids in newspapers or trade publications as well as source lists where, in the judgement of the contracting authority, they are necessary to ensure adequate competition.

10.7.8 Electronic Bidding. This methodology is appropriate:

1. to support the government's policy of enhanced access, competitive procurement and fairness;
2. for competitive procurements of both goods and services by the Department of Public Works and Government Services at a suggested threshold total value of at least $25,000;
3. for competitive procurements of services (and goods, where authority has been delegated by the Minister of Public Works and Government Services) by contracting authorities other than the Department of Public Works and Government Services at a suggested threshold total value of $100,000, and at lower values if appropriate;
4. to publish an Advance Contract Award Notice (ACAN). An 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.

5. for procurements subject to the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement and the Agreement on Internal Trade.

10.7.9 For most contracting authorities, using electronic bidding methodology to solicit and invite bids for services means that both their contract entry and amending authorities are increased (refer to Appendix C for greater detail).

10.7.10 The approved national electronic bidding and information service is the Government Electronic Tendering System (GETS). GETS affords supplier subscribers access to government procurement opportunities. To advertise bid opportunities electronically, contracting authorities may give public notice by means of:

1. the Government Electronic Tendering System; or
2. such other departmental procurement methods as may be approved by the Treasury Board.

10.7.11 Electronic Bidding. The approved national electronic bidding and information service is the MERX system, provided by Cebra Inc. It is currently available through the Department of Public Works and Government Services, and is provided under contract to supplier subscribers, and affords them access to all government procurement opportunities.

10.7.11 Deleted.

10.7.12 Government Business Opportunities (GBO). GBO is currently available through the GETS. The GBO advertises domestic and international procurement opportunities.

10.7.13 Advance Contract Award Notice (ACAN). 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 that it intends to award a good, service or construction contract to a pre-identified contractor. This electronic bidding procedure can be advantageously used to fulfil the requirement of Section 5 of the Government Contracts Regulations to solicit bids and is appropriate:

1. when the contracting situation results from one of the five exceptions identified in section 6 of the Government Contracts Regulations, which permit the setting aside of the requirement to solicit bids; and
2. to inform the public that the contracting authority is proposing to award a contract to a pre-identified supplier, especially in situations involving the services of former public servants.

10.7.14 While an ACAN is always published using an approved electronic procurement information service, contracting authorities may supplement the electronic notice in order to inform the public by the traditional approaches, such as mailing lists, notification in trade publications and the public press, etc.

10.7.15 An ACAN is to:

1. define the requirements or the expected results of the contract, so that other potential suppliers can determine if they possess the capability to satisfy them;
2. identify the proposed contractor;
3. provide the reason for the proposed directed award; and
4. if possible, provide an estimate of the cost of the proposed contract, where this will not prejudice negotiations with the proposed contractor. (Further guidance on what should be included in an ACAN is available in the Guide for Managers - Using Advance Contract Award Notices (ACANs)).

10.7.16. If no other supplier submits, during the fifteen calendar day posting period, a statement of capabilities that meets the requirements set out in the ACAN, the competitive requirements of the contracting policy have been met. Following the notification of 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.

10.7.17 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 an traditional means, in order to award the contract.

Advance Contract Award Notices shall be posted for no less than fifteen calendar days on the government's electronic tendering system. Statement of capabilities must be submitted within the same fifteen calendar days. Where the ACAN is subject to NAFTA or the WTO-AGP, the fifteen calendar days shall commence on the date the ACAN is published in the Government Business Opportunities.

With respect to statements of capabilities that are not accepted, the decision to reject will be impartial and independent in that it will not be made by the same official(s) who originally decided to proceed through an ACAN process.

For further information consult the Guide for Managers - Best Practices for Using Advance Contract Award Notices (ACANs).

10.7.18 Pre-selecting bidders. This method is appropriate:

1. when goods and services not in common commercial supply are involved and special government specifications apply;
2. when the cost of bidding is so significant that it would be unfair to present firms of unknown capability with the risk of disqualification after they have incurred the expense of bidding; or
3. when, owing to the special nature of the requirement, the competence of the low bidder must be verified before making the award and, for reasons of administrative cost, it is desirable to keep the number of such pre-award verifications to a minimum by inviting only firms with established reputations.

10.7.19 Pre-selection of bidders does not preclude a contracting authority from competitive contracting. In this situation, a contracting authority may implement the policy of competitive bidding by then seeking valid bids from the qualified bidders.

10.7.20 Pre-qualification of bidders. When the size or complexity of a project necessitates further special assurance of the contractor's ability, all necessary tests of the competence of prospective contractors may be made in advance. Bids are then invited only from the firms that have qualified. The possibility of disqualifying a firm after it has incurred a considerable expense in bidding on a large special project is thereby reduced or eliminated.

10.7.21 A version of this method, suitable for manufacturing certain items, is to pre-establish a list of qualified products which, through the testing of samples, have met the requisite standards of quality. A qualified products list is particularly suitable for selecting bidders for manufactured products when the quality requirements exceed the normal commercial standards.

10.7.22 Two-step proposal (including price competition). This method is used when, owing to the special nature of the requirement and the lack of a detailed definition of the specifications, the selection is to be based largely on the technical and managerial proposals submitted. Final selection among the firms that have submitted acceptable technical and managerial proposals is then made on the basis of price. One of the methods above may be used to choose firms to be invited. Pre-qualification is frequently the most appropriate in these circumstances.

10.7.23 Because of the infinite variety and complexity of contracting situations, it is difficult to dictate absolute norms. Each case should be examined on its own merit to determine whether price should play a dominant or secondary role in the selection process.

10.7.24 Proposal competition. Architectural, engineering, research, development and consulting services typify when a contractor should be selected for the level of performance offered rather than for price alone. Usually a very comprehensive proposal is requested to elicit all of the contractor information needed for an objective appraisal of the offers received.

10.7.25 The merits of each proposal should be compared using a weighted list of the criteria to be met. These criteria should identify accurately all the performance elements significant to the success of the project and should measure both the competence of the firm and the worth of its particular technical approach. Competence includes, for example, such factors as managerial structure, key personnel, prior industrial experience, facilities and financial strength. Technical worth includes the firm's proposed work breakdown structure, identification of key technical problems and outlines of solutions, proposed schedule of milestones, cost, quality and time control systems to be used, and the like, depending on the nature of the requirement. Any additional terms and conditions the bidder may demand should also be considered. Finally, the expected price could be weighted so that it carries the appropriate degree of importance relative to the other factors. Service contracts, where a best value selection is made based on the above, are subject to the higher competitive approval levels detailed in the Treasury Board Contracts Directive - see Appendix C. See also the definition of competitive service contracts in Appendix A.

10.7.26 If information on the economic life of the acquisition is obtainable, it is advantageous to include in the criteria a way of comparing operation, maintenance, installation and handling, consumable supplies and other in-use costs. This approach may permit an objective selection of the item most likely to be superior throughout its operating life.

10.7.27 Competing firms should be told the measurement criteria and the weighting assigned to them. Contracting authorities should be aware of successful legal challenges to the contractor selection process. The issue arises from the manner in which evaluation factors are to be used to determine the successful bid. The courts have ruled that the factors and their weighting must be established beforehand and adhered to strictly. They are to be recorded along with the requirements of the contract and included in the bid solicitation. The principle of applying bid criteria or requirements equally to all bidders is part of Canadian contract law and is applicable to both the public as well as the private sectors. Fairness to all prospective contractors and transparency in the award process are imperative.

10.7.28 Proposal competitions in which the price element is not included do not meet the definition of a valid bid. Consequently, the competitive authority dollar levels may not be used when the contract is awarded.

10.7.29 Design competition. For major public works, the architect and the design of the structure should be selected using a predetermined procedure. When the technical problems are within the state of the art, a design competition may be an appropriate preliminary step to selecting a contractor for a design/make or total package procurement.

10.7.30 Non-competitive contracts. When the contracting authority awards a contract under the provision of one or more of the exceptions to the requirement to solicit bids in Section 6 of the Government Contracts Regulations, this decision should be recorded, together with the justification.

10.7.31 In order to demonstrate the requirement for access and openness in government contracting, contracting authorities are encouraged to publish an Advance Contract Award Notice (ACAN) for contracts with pre-identified contractors using electronic bidding methodology. If no statements of capabilities meeting the requirements set out in the ACAN are received within fifteen calendar days, the contract is deemed to be competitive and the higher electronic bidding dollar levels apply.

10.7.32 If, as a consequence of a non-competitive contract award, the availability of specified commodities and services is inadequate or their price is deemed to be excessive, then competition needs to be stimulated. In this circumstance, contracting authorities should cultivate additional suppliers by ensuring that all likely firms have been made aware of and are adequately briefed on the extent and probability of continuing government requirements and given all possible help in the form of information and guidance on specifications, qualification approval, manufacturing technology, and the like. A useful technique is to inform the industry of an anticipated requirement and to request a statement of interest and capability through the use of electronic bidding methodology. If electronic bidding procedures are not feasible or if there is a need to supplement them, an expanded direct solicitation (such as an information letter mailed to a list of potential sources, advertisement of the opportunity in trade publications and the public press, etc.) could also be used.

10.7.33 Qualification of suppliers under the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement. Contracting authorities must ensure that there is no discrimination between foreign or between domestic suppliers when establishing the qualification criteria. The qualifications procedures shall be consistent with the following:

1. conditions for participation by suppliers in tendering procedures shall be published sufficiently in advance to provide the supplier adequate time to initiate and, to the extent that it is compatible with efficient operations of the procurement process, to complete the qualification procedures;
2. conditions for participation by suppliers in tendering procedures, including financial guarantees, technical qualifications and information necessary for establishing the financial, commercial and technical capacity of suppliers, as well as the verification of whether a supplier meets those conditions, shall be limited to those that are essential to ensure the fulfilment of the contract in question;
3. the financial, commercial and technical capacity of a supplier shall be judged both on the basis of that supplier's global business activity, including its activity in the territory of the Party of the supplier, and its activity, if any, in the territory of the Party of the contracting authority;
4. a contracting authority shall not misuse the process of, including the time required for, qualification to exclude suppliers of another Party from a supplier's list or from being considered for a particular procurement;
5. a contracting authority shall recognize as qualified suppliers those suppliers of another Party that meet the conditions for participation in a particular procurement;
6. a contracting authority shall consider for a particular procurement those suppliers of another Party that request to participate in the procurement and that are not yet qualified, provided there is sufficient time to complete the qualification procedure;
7. a contracting authority that maintains a permanent list of qualified suppliers shall ensure that suppliers may apply for qualification at any time, that all qualified suppliers so requesting are included in the list within a reasonable short period of time and that all qualified suppliers included in the list are notified of the termination of the list or of their removal from it;
8. where, after publication of the Notice of Proposed Procurement, a supplier that is not yet qualified requests to participate in a particular procurement, the contracting authority shall promptly start the qualification procedure;
9. a contracting authority shall advise any supplier who requests to become a qualified supplier of its decision as to whether that supplier has become qualified; and
10. where a contracting authority rejects a supplier's application to qualify or ceases to recognize a supplier as qualified, the contracting authority shall, on request of the supplier, promptly provide pertinent information concerning the contracting authority's reason for doing so.

10.7.34 For procurements subject to the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement, contracting authorities shall

1. ensure they use a single qualification procedure, except that a contracting authority may use additional qualification procedures where the contracting authority determines the need for a different procedure and is prepared, on request of another Party of the Agreements, to demonstrate that need; and
2. try to minimize differences in the qualification procedures from other contracting authorities.

10.7.35 Contracting authorities can exclude suppliers on grounds such as bankruptcy or false declarations.

10.7.36 Invitation to participate under the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement. Contracting authorities shall publish an invitation to participate in the appropriate publication for all procurements. The invitation to participate shall take the form of a Notice of Proposed Procurement (NPP) that shall contain the following information:

1. description of the nature and quantity of the goods or services to be procured, including options for further procurement and if possible:
   1. an estimate of when such options may be exercised, and
   2. in the case of recurring contracts, an estimate of when the subsequent notices will be issued;
2. a statement as to whether the procedure is open or selective and whether it will involve negotiation;
3. any date for starting or completing the delivery of the goods or services to be procured;
4. the address to which an application to be invited to tender or to qualify for the suppliers' lists must be submitted, the final date for receiving the application and the language or languages in which it may be submitted;
5. the address to which tenders must be submitted, the final date for receiving tenders and the language or languages in which tenders may be submitted;
6. the address of the contracting authority that will award the contract and that will provide any information necessary for obtaining specifications and other documents;
7. a statement of any economic or technical requirements and of any financial guarantees, information and documents required from suppliers;
8. the amount and terms of payment of any sum payable for the tender documentation; and
9. a statement as to whether the contracting authority is inviting offers for purchase, lease or rental, with or without an option to buy.

10.7.37 For procurement subject to NAFTA and WTO-AGP, in the case of selective tendering procedures, a contracting authority that maintains a permanent list of qualified suppliers shall publish annually, in the appropriate publication, a notice containing the following information:

1. an enumeration of any lists maintained, including their headings, in relation to the goods or services or categories of goods or services to be procured through the lists;
2. the conditions to be fulfilled by suppliers in view of their inscription on the lists and the methods according to which each of those conditions will be verified by the contracting authority concerned; and
3. the period of validity of the lists and the formalities for their renewal.

10.7.38 For procurements subject to NAFTA and WTO-AGP, after the publication of an invitation to participate, but before the time set for the opening or receipt of tenders as specified in the notices or the tender documentation, a contracting authority finds that it has become necessary to amend or reissue the notice or tender documentation, the contracting authority shall ensure that the amended or reissued notice or tender documentation is given the same circulation as the original. Any significant information given by a contracting authority to a supplier with respect to particular procurement shall be given simultaneously to all other interested suppliers and sufficiently in advance so as to provide all suppliers concerned adequate time to consider the information and to respond.

10.7.39 Under NAFTA and WTO-AGP, a contracting authority shall allow a supplier that requests to participate in a particular procurement to submit a tender and shall consider the tender. The number of additional suppliers permitted to participate shall be limited only by the efficient operation of the procurement system.

10.7.40 Under NAFTA and WTO-AGP, where a contracting authority does not invite or admit a supplier to tender, the contracting authority shall, on request of the supplier, promptly provide pertinent information concerning its reasons for not doing so.

10.7.41 Call for tenders under the Agreement on Internal Trade. A notice of a call for tenders shall contain at least the following information:

1. a brief description of the procurement contemplated;
2. the place where a person may obtain information and tender documents;
3. the conditions for obtaining the tender documents;
4. the place where the tenders are to be sent;
5. the date and time limit for submitting tenders;
6. the time and place of the opening of the tenders in the event of a public opening, and a statement that the procurement is subject to the AIT.

10.7.42 In evaluating tenders, subject to AIT, contracting authorities may take into account not only the submitted price but also quality, quantity, delivery, service, the capacity of the supplier to meet the requirements of the procurement and any other criteria directly related to the procurement. The tender documents shall clearly identify the requirements of the procurement, the criteria that will be used in evaluating bids and the methods of weighting and evaluating the criteria.

10.8 Receiving bids

10.8.1 Departments must ensure that adequate management controls are in place to protect the integrity of the bidding process and that these management controls ensure receipt, custody, bid opening, and recording are addressed.

10.8.2 Deleted.

10.8.3 Deleted.

10.8.4 Deleted.

10.8.5 Deleted.

10.8.6 A bid or proposal is or non-responsive if it does not meet all the mandatory requirements listed in the Request for Proposal or other solicitation documents and will be rejected.

10.8.7 Bids or proposals that respond to the mandatory requirements but contain a minor aberration may be considered if, in the opinion of the contracting authority's management:

1. the aberration is trivial or negligible compared to the total cost or scope of the supplies or services being procured;
2. the presence of that aberration, its removal by negotiation, or its clarification with the bidder could not reasonably be considered prejudicial to the other bidders; and
3. the decision to accept such bids is fully justified on the contract file.

10.8.8 When the bid solicitation requires the submission of bid security, the amount should be determined by the contracting authority in advance. When the appropriate security has been submitted but the bidder subsequently increases the bid price before the stipulated closing date, the contracting authority may allow the bidder reasonable time to supply any additional security required. A reasonable period may also be given to a bidder to resubmit the security deposit in the appropriate instrument if it was not initially done. When a bidder has submitted less than the exact financial security stipulated, the bid will be considered as non-responsive unless, as stated in article 10.8.7 above, the deviation is negligible, or the circumstances in article 10.8.10 below prevail (see also article 12.11.9).

10.8.9 When only one of a number of bids received in response to a competitive bid solicitation is (considered) valid and the contracting authority determines that fair value to the Crown will be obtained, the contract may be awarded to the one valid bidder and considered competitive (See definitions in Appendix A). In determining the fairness of the single valid bid, the following apply:

1. Where market prices for a work, product or service similar to those being solicited are readily available, the bid price may be compared with recent prices paid, prices in current price lists or catalogues, or recent prices paid by other organizations (such as government or large private sector corporations).
2. Where market prices are not readily available or applicable, the previous price paid for an identical or similar work, product, or service (adjusted for inflation), can be compared with the proposed bid or prices. Where such a work, product, or service has not previously been acquired, an acceptable price for the work, product, or service is to be determined based on a reasonable combination of cost, overhead and profit.
3. In certain instances, the price of the single valid bid may be compared with that of the invalid bids, depending on the reasons for declaring the other bids invalid.

10.8.10 When only one valid bid has been received, that bidder may also be asked to provide price substantiation. If the information provided is not acceptable to the contracting authority, then price negotiation should take place. If the single bidder does not appear to have the requisite financial stability, it may be in the public interest to require the bidder to submit an appropriate form of security before the bid is considered. Another alternative would be to invite new bids.

10.8.11 In the context of article 10.8.9(b) above, the cost(s) of a work, product or service is the sum of the applicable direct and indirect costs which are, or are to be, reasonably and properly incurred and/or allocated, in the performance of the work or provision of the product or service, less any applicable credits. In ascertaining what constitutes costs, any generally accepted method of determining or estimating costs that is applied consistently and is equitable in the circumstances may be used, including standard costs properly adjusted for applicable variances.

10.8.12 A cost may be considered reasonable if, in nature and amount, it does not exceed that which would be incurred by a prudent person in the conduct of a competitive business. In determining whether a cost element is reasonable, consideration should be given to:

1. whether the cost is generally recognized as normal and necessary for the conduct of the supplier's business or the performance of the contract;
2. the restraints and requirements of such factors as generally accepted sound business practices, arm's-length bargaining, federal, provincial and local laws and regulations, and contract terms;
3. the action that prudent business persons would take in the circumstances, considering their responsibilities to the owners of the business, their employees, customers, the various levels of government and the public at large;
4. significant deviations from the established practices of the supplier; and
5. the specifications, delivery schedule and quality requirements of the particular contract as they affect costs.

10.8.13 As stated in article 4.2, in assessing bids, the following apply:

1. if there are errors in the mathematical extension of unit price items, the unit prices prevail and the mathematical extension is adjusted accordingly;
2. if there are errors in the addition of lump sum prices or unit price extensions, the bid is not rejected but the total is corrected and the correct amount reflected in the total bid price;
3. any bidder affected by mathematical errors should be told immediately and given the corrected bid price.

10.8.14 Withdrawal of bids. Customarily the federal government allows bids to be modified or withdrawn before the closing time and date provided that the notification is in written form such as registered letter, telex, or facsimile transmissions. As stated in article 4.2, modifications are not acceptable under any circumstances after bid closing. However, if an offer is made in error or contains a significant and demonstrable error that is made known to the contracting authority, the bid may be withdrawn before acceptance. This reflects the principle of contract law that an offer is not binding if it is made in error or contains an error that is made known to the recipient. The government's model bid bond form contains provisions obligating bonding companies to compensate the Crown for higher costs caused by withdrawals after acceptance. Other types of bid security should provide the same protection.

10.8.15 As stated in article 4.2, the payment provision of a bid bond or other bid security will be invoked if the bidder refuses to execute the contract documents or to provide the specified contract security.

10.8.16 Bid protests. Contracting authorities should ensure that protests are resolved quickly and effectively so as not to delay the contracting process. When acting within the scope of its authority and existing statutes and regulations, the contracting authority's action to enter into a contract with a bidder involves the exercise of an administrative power that normally cannot be reviewed by the courts. Consequently, all bid protests, particularly those related to the impartiality of this process, should be referred to senior departmental management for resolution and the resulting decision should be communicated to the concerned or affected parties promptly. Where a bid protest is made pursuant to the provisions of the North American Free Trade Agreement, Agreement on Internal Trade and the World Trade Organization - Agreement on Government Procurement, the Canadian International Trade Tribunal Procurement Inquiry Regulations apply.

10.8.17 Identical bids. If identical low valid bids or proposals are received, the contract should be awarded on the basis of best value. The factors below should be used, subject to directives on national policies and objectives that may be issued from time to time. These criteria may be weighted as deemed appropriate by the contracting authority:

1. a bidder with an overall satisfactory performance record be given preference over a bidder known to have an unsatisfactory performance record;
2. a bidder in a position to provide adequate after-sales service with a good record in this regard be given preference over a bidder who is not able to provide adequate service or who has a poor record;
3. when delivery is an important factor, the bidder offering the best delivery date be given preference;
4. when there are several items included in the bid and the prices on only some of the items are identical, the offer of the firm bidding on the greatest dollar value be given preference; and
5. when a number of items are included in the bid and one or more firms bid lower on one or more of the items, the firm that bid low on the greatest dollar value be given preference both for the items on which it bid equal prices and for the items on which it bid low.

10.8.18 As stated in article 4.2, departments and agencies are to report to the Department of Industry any identical bids where collusion is suspected or any price so unreasonable that it may have been established to lessen competition or eliminate a competitor.

10.8.19 Change in scope of work. When there are changes in the job requirements or in the funds available that reduce the scope of the work, an attempt should be made to negotiate a new price with the successful bidder. If the change in the scope of the work is significant or negotiations cannot be concluded to the satisfaction of the contracting authority, new bids should be invited. For construction contracts, new bids are normally invited from the two lowest bidders on the original bid solicitation. When more than two bidders have bid in the same approximate amounts, consideration should be given to including these firms on the new bid solicitation. For goods and services, it is often the practice to solicit new bids without limiting the field of competition.

10.8.20 If the bidder limits the period of validity of the bid, this should be specified in the offer. When the contracting authority accepts a bid or proposal with some condition e.g., provision of financial security or obtaining security clearance, it may be necessary to establish and specify a period during which the acceptance of the bid remains valid.

10.8.21 Debriefings. Debriefings should be provided to unsuccessful bidders on request and should normally include an outline of the factors and criteria used in the evaluation, while respecting each bidder's right to the confidentiality of specific information.

10.8.22 Forwarding of Tender Documentation by the Entities under the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement. The respective agreements require that in open and selective procedures, contracting authorities shall forward the tender documentation at the request of any supplier participating in the procedure, and shall reply promptly to any reasonable request for explanations relating hereto.

10.8.23 For a procurement subject to NAFTA and WTO-AGP, contracting authorities shall reply promptly to any reasonable request for relevant information submitted by a supplier participating in the tendering procedure, as long as such information does not give that supplier an advantage over its competitors in the procedure for the award of the contract. The following procedures shall be followed in receiving tenders:

1. tenders shall normally be submitted in writing directly or by mail;
2. where tenders by telex, telegram, telecopy or other means of electronic transmission are permitted, the tenders made thereby must include all the information necessary to evaluate the tender, in particular the definitive price proposed by the supplier and a statement that the supplier agrees to all the terms and conditions of the invitation to tender;
3. a tender made by telex, telegram, telecopy or other means of electronic transmission must be confirmed promptly by letter or by the dispatch of a signed copy of the telex, telegram, telecopy or electronic message;
4. the content of the telex, telegram, telecopy or electronic message shall prevail where there is a difference or conflict between that content and the content of any documentation received after the time limit for submitting of tenders;
5. tenders presented by telephone shall not be permitted;
6. request to participate in selective tendering procedures may be submitted by telex, telegram or telecopy and if permitted, may be submitted by other means of electronic transmission; and
7. the opportunities that may be given to suppliers to correct unintentional errors of form between the opening of tenders and the awarding of the contract shall not be administered in a manner that would result in discrimination between suppliers.

10.8.24 The federal government has a strong commitment to serve Canadians better by expanding access to information and services available electronically. It is government policy to establish and manage the use of public key cryptography as a component of the government's common information management and information technology infrastructure and to support electronic alternatives to the use of paper, thereby increasing efficiency and reducing government costs.

1. Departments must ensure that only secure e-procurement systems that meet government policies are used;
2. A number of considerations are required before an e-procurement system will be approved, including an assessment of the threat, risk and technological requirements for implementing the e-procurement system. Security, privacy and legal considerations must also be assessed.
3. As e-procurement systems are introduced to the federal procurement community, it should be noted that for those procurements subject to the trade agreements, Contracting authorities must respect the provisions of the trade agreements.