Appendix H
Approval of contractual proposals
Published January 2002. The contents of this appendix contain both mandatory requirements as well as guidelines.
1.	Introduction
The information required in the contract approval process should be a matter of record in all contract files, as well as in Treasury Board submissions, to:
(a)	provide a clear audit trail;
(b)	provide management with sufficient information to make an informed decision; and
(c)	avoid delays in the approval process while clarifications and additional information are sought.
There are three types of contract submissions, viz, entering into a contract, amending a contract and ratifying a contract or amendment. The Treasury Board Submissions Guide provides general information on the format, structure and processing of submissions to the Treasury Board.
2.	Required information 
2.1	Proposal
The proposal and cost sections in a submission are the most important elements since the text of the proposal and details of the cost must reflect what the Treasury Board Ministers or the contract authority are to approve. The proposal must therefore provide a brief, descriptive narrative, in layman’s terms, of the authorities sought. The proposal should clearly indicate the type of submission, i.e., to enter or to amend a contract; the name and address of the contractor and a brief description of the work, including the name of the project and the location. In a goods contract submission, a statement explaining what the goods are for and where they will be used is required. In a multi‑year contract, the proposed duration of the contract must be stated.
2.2	Cost
In the cost section, the amount requested and the source of funds (vote number, revolving funds, O and M, capital, etc.) must be stated. The name of the client department funding the proposal, if any, must be included. In the case of an amendment, the additional amount requested plus the revised contract total must be stated. A cash flow expenditure forecast is also required.
2.3	Selection of contractor
When the selection is based on competitive bidding, the names of the bidders, the location of the work and the price bid by each bidder are to be included in the submission. If the selection is based on other criteria such as best value, details of the evaluation system and supporting information in terms of technical evaluation and price is required. When the selection of the contractor does not conform to the definition of a competitive contract, the contract is to be treated as a non‑competitive contract and the lower authority levels apply.
2.4	Technical evaluation
A summary of any technical evaluation should be provided normally as an annex to the submission.
2.5	Negotiated prices
When the price was derived by negotiation, a complete price breakdown should be provided. A statement that the price is reasonable should cite comparisons, price certifications, profit level, catalogue price, historical prices and the like.
2.6	Amendments to contracts
A full explanation of why costs will exceed the original contract level must be provided when requesting approval to increase the value of a contract (e.g., additional client requirement, underestimation of cost, additional work not included in the original contract). Also a table or resume of the previous approvals and departmental amendments, work done, work paid for, descriptions of the original work and details of the revised contract must be provided.
2.7	Method and basis of payment
Pricing and payment terms should be included. Indicate whether the contract is a firm price contract, unit price contract or a target price contract, etc. If there is a penalty for late delivery, this should be reported.
2.8	Terms of reference
A brief description of the main elements of work to be carried out by the contractor is required.
2.9	Advance payments
If advance payments are to be made, the request for authority to make them should be included in the proposal section. The amount, time and reason for the request, and the proposed method and time of any recovery of the advance should be provided in the remarks section.
2.10	Remarks
The text of the remarks section of a submission or contractual proposal should include the following, in numbered paragraphs:
(a)	Full identification of the work being contracted, including its relationship to a specific program and to other associated contracts so that the full context of the work is clearly understood. If it is foreseen, indicate that a further phase may be required.
(b)	Other relevant authorities, including program approval reference, Order‑in‑Council authority, and related contract approval references (Treasury Board or departmental).
(c)	When applicable, an explicit statement of the urgency of a submission, including such information as expiry date of the received bids, effect of delay on client's operations or project coordination, etc.
(d)	Cost control mechanisms, if applicable, including cost‑reimbursable contracts, fixed‑time‑rate contracts, and contracts in which progress payments or milestone payments are made.
(e)	The delivery schedule or project completion date, along with an assessment of the implications for program success. Also indicate the proposed start date, which should factor in the processing time within the department and Treasury Board Secretariat.
(f)	Reference to any special policies, guidelines or socio‑economic factors that have a bearing on the proposed contract.
(g)	In cases of cost overrun (a) under‑estimating the cost of the work to be performed or (b) for work that was to be done but not included in the terms of reference (as distinct from additional work resulting from client requirements or similar reasons) provide a detailed explanation of the reasons for the overrun (See Chapter 2‑1, Project Approval and Chapter 2‑2, Project Management of the Capital Plans, Projects and Procurement policies).
(h)	Whether there was a Procurement Review Committee (P.R.C.) and, if so, the results.
(i)	Whether the procurement is subject to the trade agreements, the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, Agreement Between the Government of the Republic of Korea and the Government of Canada on the Procurement of Telecommunications Equipment and the Agreement on Internal Trade and, if applicable, quoting the articles for exceptions and derogations.
(j)	An outline of the extent of Canadian content.
(k)	Whether the contractor has provided a certificate of commitment to implement employment equity.
(l)	A project management certification, where applicable.
(m)	The departmental contact, including a telephone number.
(n)	Any other information of special interest. Information pertaining to any situation in the contracting process which is not, or may not be, in accordance with the Government Contracts Regulations or the contracting policy of the government should be explained.
3.	Format requirements for submission to Treasury Board
The Treasury Board Secretariat should have copies of all supporting documents referred to in the submission. In some cases, a summary of the essential details of a document may suffice. The Treasury Board Submissions Guide provides general information on the format, structure and processing of submissions to the Treasury Board. It also provides guidance on some of the content requirements. A template is also available on the Treasury Board web site (http://publiservice.tbs-sct.gc.ca/cmp/trcs-msrm/trcs-msrm_e.asp?Language=EN). For complex, urgent or sensitive issues, discussions with the Secretariat analyst, prior to finalization of the submission, may shorten the time required for approval.
4.	Evaluation of submissions
The Treasury Board Secretariat will carry out continuing reviews of submissions to determine the adequacy of these instructions and the level of compliance. If necessary, departments or agencies will be informed of any deficiencies. Contracting authorities are responsible for monitoring and evaluating the application of these instructions within their own departments and agencies.