Contracting for Services

Contracting for services has always been an effective way for the federal government to meet unexpected fluctuations in workload, acquire special expertise not available in-house and sometimes replace public servants during temporary absences.

Every year, the Canadian government contracts for thousands of services from the private sector to satisfy immediate needs or in connection with the purchase of goods. Services being contracted relate either to goods or to intangible services.

A sizeable part of service contracting is directly done by the end users: Special Operating Agencies (SOAs), individual departments and Crown corporations. Public Works and Government Services Canada (PWGSC) only contracts for a portion of all services bought from the private sector by the federal government.

• How to Find out About Opportunities
• Where to Promote Your Services
• Services and Trade Agreements
• More Information

For their program delivery purposes, individual departments may buy directly from suppliers through their procurement or acquisition division for services contracts. They may contract up to $400,000 competitively or up to $100,000 without competition. They may also buy competitively, up to $2 million when they advertise their requirements through MERX™. Under the federal government's trade agreement obligations, departments must publicly advertise opportunities subject to these agreements. Some may advertise other services requirements as well.

Crown corporations contract for services on their own and have more flexible procedures than line departments. Some of them, however, enter into contractual arrangements with other government entities for service purchases in support of their programs.

Public Works and Government Services Canada, has the highest approval limit for services with up to $20 million competitively, and $3 million without competition.

In PWGSC, most competitive service opportunities valued at $25,000 or more are advertised electronically on MERX (electronic tendering service) as Notices of Proposed Procurement (NPPs), including requirements subject to international trade agreements. Printing service requirements over $10,000 are also advertised on MERX.

Requirements worth $84,000 or more for architectural and engineering services and services related to real property are posted as NPPs on MERX. Construction requirements worth $100,000 or more are also posted as NPPs on MERX.

MERX also posts requirements for expressions of interest from suppliers to carry out specific projects. This allows government clients to identify sources of supply, to determine supplier interest and suitability and to establish short lists of suppliers to be invited to submit proposals.

When a bid opportunity is issued on a sole-source basis, PWGSC publishes an Advance Contract Award Notice (ACAN) on MERX. This gives potential suppliers a chance to submit a statement of capabilities for the requirement. The ACAN is posted for 15 calendar days. Potential suppliers have the 15 days in which to submit the statement.

MERX provides information on companies that have requested bid documents. This information can be used by would-be bidders to seek alliance, partnership, or joint venture opportunities.

As selling services to the federal government is not like selling a commercially-available off-the-shelf product, it is important that you promote your expertise or know-how to the potential end-users. In this regard, you need to know who these end-users are and what they buy. A good place to start is with the departmental materiel manager who usually oversees the tendering and contracting services in a department.

PWGSC Key Markets for Service Requirements

It is advisable that you market your skills and services to PWGSC's headquarters organizations and regional offices using the Procurement Allocations Directory, an online list of the Department's purchasing organizations and what they buy. You can search by commodity description or by organization name.

Land, Aerospace and Marine Systems and Major Projects Sector (LAMSMPS) buys services ranging from technical writing and field services to naval architecture. Through LAMS, PWGSC handles many procurement and contracting activities related to Major Crown Projects, including services contracting.

Commercial Acquisition and Supply Management Sector (CASMS) buys services such as travel management, moving, insurance, transportation, shipping, communications, audio-visual and printing services.

Real Property Contracting Directorate buys real property services relating to architectural and engineering services, such as professional advice, technology development, environmental services, hydrographic services, dredging, and fleet services. RPC also purchases real estate services related to the acquisition, leasing, development, survey, management, operation, maintenance, repair and disposal of real property.

Services and Technology Acquisition Management Sector (STAMS) buys services such as business management, business consulting, training, informatics services, science and technology related services, as well as aircraft operations and support, technical mapping and inspection services.

Translation Bureau, a Special Operating Agency, buys, on behalf of the Parliament of Canada and for all federal government departments and agencies, translation and interpretation services (simultaneous, consecutive and sign language) in both official languages and in more than 150 Aboriginal and foreign languages.
Private sector organizations can access the translation and linguistic services of the Translation Bureau when the work is related to a contract being performed on behalf of a federal government organization. For more information, see Translation Bureau.

Consulting and Audit Canada (CAC), a Special Operating Agency, specializes in audit services and consulting to federal departments and agencies, international organizations, and provincial and foreign governments on a fee-for-service basis. CAC also buys direct from private sector suppliers.

PWGSC also plays a special role with regard to temporary help contracting. This department negotiates standing offer agreements with private firms to provide for qualified personnel for temporary assignments of up to 20 weeks. For more information on standing offers, refer to The Bidding Process.

The Agreement on Internal Trade (AIT), which came into effect July 1, 1995, is designed to reduce barriers to trade within Canada. This agreement, between the federal government, the provinces and the territories, opens up public procurement to all Canadian companies. Service and construction contracts for $100,000 or more are covered by the AIT. These opportunities are advertised on MERX.

The North American Free Trade Agreement (NAFTA) was the first international trade agreement signed by Canada to cover services, including construction-related services. In opening up the Mexican, U.S. and Canadian government service markets to each other's suppliers, NAFTA ensures equal treatment to all North American businesses.

Service contracts worth $84,000 or more and construction contracts estimated at $10.9 million or more (effective January 1, 2006) are covered by NAFTA when the purchases are made for government departments.

For Crown corporations, NAFTA kicks in when service contracts are worth $420,000 or more and the estimated value of construction contracts is $13.4 million, or greater.

Canadian opportunities affected by NAFTA are publicized through MERX. Mexican opportunities are advertised in that country's major daily newspapers and in the Diario Oficial de la Federación, as well as on MERX. U.S. purchases are published in the Commerce Business Daily (CBD). Extracts of the CBD appear on MERX.

The Canada-Korea Telecommunications Equipment Agreement (CKTEA) has been terminated at the request of the Korean government. (see TB Policy Notice)

The World Trade Organization Agreement on Government Procurement (referred to as WTO-AGP) that expands on the General Agreement on Tariffs and Trade (GATT), also covers services. Service contracts of federal departments worth $245,000 or more and construction contracts worth $9.4 million or more are covered by WTO-AGP. These opportunities are also publicized through MERX and the GBO.

More Information

Business Access Canada has a continuing program of seminars and information on key topics such as proposal writing, contracting for services to the federal government and Canadian content. For more information on how to sell services, contact your nearest PWGSC office or the