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Chapter 9 - Special Procurements

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9.1 Introduction

(2010-01-11)

This chapter is intended to present information related to procurement that is unique or specific to a certain commodity, client or area. Therefore, this chapter contains a number of topics and each specific topic contains related subjects. These subjects follow the Supply Manual format identified in 1.5.5. For example, topics covered are Major Crown Projects, Real Property Contracting and United States Foreign Military Sales.
It is recognized that all procurement scenarios such as those listed in this chapter cannot address every possible situation that Public Works and Government Services Canada (PWGSC) may face in its common service delivery environment. However, the types selected are based on historical usage and recommendations from the contracting community.

9.5 Major Crown Projects

(2010-01-11)

This section describes Major Crown Projects (MCPs), the responsibilities of PWGSC in MCPs, procurement strategy development as well as other key elements related to MCPs.

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9.5.1 General

(2010-01-11)

MCPs are by their very nature large procurements. The Supply Manual applies to them as it would to any other acquisition. What differs is the notion that participating departments must act in consort with one another in planning and overseeing the work performed by the contractor(s) in achieving the deliverables. No one department can act solely from its legislative point of view to the exclusion of the other participants.
A project is deemed to be an MCP when its estimated cost will exceed $100,000,000 and the Treasury Board (TB) would assess the project as high risk. However, TB may require any project exceeding the sponsoring minister's delegated project approval authority to be managed as an MCP. As well, provision is made in the policy for a sponsoring department to request approval from TB to manage a project exceeding $100,000,000, but of lesser risk within a tailored MCP regime or outside the MCP management framework.
The additional aspects of managing MCPs include obtaining approval-in-principle from Cabinet for an MCP having significant policy or fiscal framework implications, and the following TB mandatory requirements:
1. that the project leader be a senior manager within the sponsoring department accountable directly to the deputy minister;
2. that the project leader is viewed as personally and visibly accountable for all aspects of the project;
3. that a Senior Project Advisory Committee (SPAC) be established with membership consisting of senior representatives of departments participating in the project. The role of this committee is to advise the project leader on all aspects of the project and carry out the procurement review function for the project. SPAC is addressed in more details in 9.5.20;
4. the selection and implementation of an appropriate project performance measurement system;
5. the submission of progress reports to TB at key events or as directed by TB;
6. the submission of a project evaluation report to TB; and
7. that MCPs are reported to Parliament in accordance with the Guide to the Preparation of Part III of the 2006-2007 Estimates - Reports on Plans and Priorities and Departmental Performance Reports.

9.5.5 Responsibilities of PWGSC in Major Crown Projects

(2010-01-11)

In respect to MCPs, the Minister of PWGSC is accountable and responsible to Cabinet for the acquisition of the MCP goods and/or services under the Department of Public Work and Government Services Act and is responsive to the project leader. The Minister of PWGSC is accountable and responsible for all aspects of the contracting process and resulting contracts, including:

participate in the project as a participating department as described in TB policy on Management of Major Crown Projects;
manage the procurement process from solicitation through contract award to contract completion;
support the project in accordance with any existing legislation or general interdepartmental arrangements;
provide any project-specific services such as procurement and scheduling, as described in any agreement or Memorandum of Understanding (MOU), concluded with the sponsoring department;
help to define user requirements/selecting the most effective procurement approach;
ensure the best value for money through the optimum combination of specified quality, specified time and lowest life-cycle cost of the acquisition;
include procurement issues in risk assessments and risk management plans;
establish project files for all procurement related documents and deliverables;
develop a structured approach to document requirements and deliverables, if applicable;
ensure the contract is carried out pursuant to the legal framework and maintain the government standards of prudence, probity and equity, when dealing with the private sector;
develop, with the client, the rules of engagement pre-contract;
develop and release any formal and/or contractually binding communication between Canada's representatives and the bidder/contractor;
provide access and open and competitive bidding to suppliers through the Government Electronic Tendering Service;
pre-qualify suppliers and build supplier working relationships;
manage the solicitation process and documents;
make submissions to the TB for authority to enter into contracts, to seek a pre-approval authority for amounts for anticipated amendments and to amend contracts;
lead all negotiations with contractors that could result in contract implications;
develop, with the client, the rules of engagement for post contract award interaction between the client and the contractor;
monitor Canada's interactions with the contractor to maintain the integrity of the contract; and
manage the contract in order to maintain the integrity of the contractual agreement and compliance with the contract requirements.

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9.5.10 Early Involvement

(2010-01-11)

One of the most important tasks for the PWGSC manager relative to a new MCP is to integrate into the Project Team, as soon as possible, and ensure participation at all levels of the project. One of the key requirements after establishing the operational objectives of the project is the development of the procurement strategy for the equipment, parts and services that will be delivered by the project. This is also one of the key areas of interest for ministers when considering the Memorandum to Cabinet and/or the TB Submission. Therefore, the Project Team must get involved in the project, as early as possible, to ensure best value of the procurement, and that clients consider all possible strategies before committing the project to solutions, which may subsequently conflict with government procurement policies and strategic objectives. Contracting officers should analyse with the client what opportunities may exist to support their obligations as well as their departmental targets related to green procurement. Successful implementation of the Policy on Green Procurement requires the identification and implementation of environmental performance opportunities at both the strategic and operational levels, taking into consideration specific departmental buying patterns, sustainable development targets and other Government of Canada priorities.
Best value is not confined to the contractual process; it is equally important at the requirements definition stage. For many acquisitions, especially for MCPs, 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, environmental considerations 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.

9.5.15 Memorandum of Understanding with Client Department

(2010-01-11)

A vital aspect in government contracting is the role played by PWGSC and its relationship with client departments at all stages in the life cycle management of goods and services in a MCP. Details of the PWGSC-client relationship will normally be covered in a signed general Memorandum of Understanding (MOU) between PWGSC and its client departments. These may be adjusted to suit particular PWGSC-client agreements. Acquisitions of a special or significant nature may require specific MOUs and more detailed treatment, such as that outlined in the TB policy Management of Major Crown Projects. Client departments are generally responsible for determining what they want, where and when. PWGSC is normally responsible for determining how goods and/or services will be provided to meet the needs of clients.
In terms of life cycle management, this means that:
Requirements definition is, in varying degrees, a client responsibility, depending on government policy and the type of goods and/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. Acquisition is a PWGSC responsibility, use is a client responsibility, and disposal of goods is a PWGSC responsibility.
This does not mean each party function 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 PWGSC-client division of responsibilities. In assessing their role and participation in the project, PWGSC must determine the nature and degree of the effect of the proposed project on their operations, asset base or other interests, and ensure that appropriate commitments are made; for example, by means of the MOU.
Unless the MOU for an MCP specifically states otherwise, the division of responsibilities between PWGSC and the client department will be governed by the agreements contained in Annex 1.1, which provides a generic division of anticipated types of responsibilities between PWGSC and client departments or in Annex 1.2, which contains two client-specific agreements with the Department of National Defence.
PWGSC's cost of services provided to client departments in respect to a MCP is recovered directly from the client. The services to be provided and their costs are negotiated with the client department, approved by TB as part of the Program Approval submission, and the results must be included in the MOU.

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9.5.20 Procurement Review

(2010-01-11)

The role and membership of the Senior Project Advisory Committee (SPAC) as well as the responsibility of PWGSC in the development of the procurement strategy for Major Crown Projects (MCPs) are addressed below.

9.5.20.1 Procurement Strategy Development

(2010-01-11)

PWGSC is responsible for developing and implementing procurement strategies within the framework of its client departments' needs, its legislative mandate and government policy. Operating departments must form a SPAC before initiating discussions with potential suppliers that could raise expectations as to the government's procurement strategy.
The government has confirmed that all procurements in excess of $2,000,000 must be reviewed for potential regional and industrial benefits. To ensure that this review is carried out in an efficient and cost-effective manner, and in recognition of the diverse interests involved, TB has established an interdepartmental procurement review process applying to all such procurements. In the case of MCPs, this is carried out by the SPAC, whose role is defined in 9.5.20.10.
Environmental performance is also embedded as a key consideration of the departmental procurement review process under the Procurement Review Committee. For sources of information, environmental issues and mitigating actions via Green Procurement, consult the Environmental Awareness Tool Kit and the Guideline for Integration of Environmental Performance Considerations in Federal Government Procurement. Consider the various environmental performance considerations listed in the Green Procurement Checklist. Contracting officers may also refer to the online course entitled Introduction to Green Procurement (C215).
Where the procurement strategies proposed for significant projects require Cabinet approval, sponsoring departments must consult with the Treasury Board Secretariat (TBS) in preparing the submission to Cabinet. These consultations must include the analysis of any socio-economic initiatives, and the views of TBS must be specifically included in the submission to Cabinet.

9.5.20.5 Senior Project Advisory Committee

(2010-01-11)

The Senior Project Advisory Committee (SPAC) provides an interdepartmental senior level forum for orienting a project to achieve relevant national objectives, stimulating agreements between the sponsoring and participating departments, resolution of interdepartmental issues, and review and discussion of project objectives and key project instruments. SPACs do not deliberate purely departmental issues, such as the operational requirement or departmental funding.
A SPAC must be established for all Major Crown Projects (MCPs) or those requirements exceeding $100,000,000. The Project Leader of the client department chairs this committee, and membership includes representation from other government departments with an interest in the project. Committee members from other participating departments act as advisors and facilitators to ensure the views of their departments are made known at the SPAC and to ensure prompt and effective action is taken to meet the obligations of their departments to the MCP.
Whenever a SPAC is convened, it also performs the function of a Procurement Review Committee including all significant associated procurements handled through the project office. SPAC meets at the call of the chairperson.

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9.5.20.10 Membership of the Senior Project Advisory Committee

(2010-01-11)

The Project Leader must determine which departments are potentially affected by, or could have program interests in the MCP. The Project Leader must ensure that these departments are notified in writing as early as possible in the life of the project, so that they may decide whether they should formally participate in the MCP. Whenever an MCP is likely to require private sector involvement, the departments notified must include appropriate contracting authorities and industrial and regional benefit authorities.
The majority of MCPs will be procurement projects, which are subject to the TB Procurement Review Policy. Sponsoring departments should refer to this policy for more guidance. Departments sponsoring procurement projects must, as a minimum, notify the following departments:
Contracting authorities and service agents:
1. PWGSC;
2. Defence Construction Canada.
Industrial and regional benefit departments and agencies:
1. Industry Canada;
2. Western Economic Diversification Canada;
3. Atlantic Canada Opportunities Agency;
4. Economic Development Agency of Canada for the regions of Quebec.
Others:
1. Privy Council Office;
2. Treasury Board Secretariat;
3. Department of Finance Canada;
4. Human Resources and Skills Development Canada.
As a minimum, sponsoring departments must assess whether departments listed below should also be notified, particularly for the specific areas noted:
1. Environment Canada, for environmental assessment considerations (may be required by statute under certain circumstances);
2. Department of Justice Canada, to ensure timely assistance in resolving any complex legal issues that can arise;
3. Human Resources and Skills Development Canada, for labour pool considerations;
4. Canadian Heritage, when remote sites or locations are involved,
5. Foreign Affairs and International Trade Canada, for international trade and export licensing; and
6. Indian and Northern Affairs Canada.
Other departments may notify the project leader of their intent to participate in the MCP, at which time they become participating departments.

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9.10 Real Property Contracting

(2010-01-11)

This section describes the responsibilities for real property contracting and provides some of the related procedures and methodologies.
Acquisitions Branch, Public Works and Government Services Canada (PWGSC), provides procurement services related to real property contracting for federal departments and agencies. Real Property Contracting (RPC), Acquisitions Branch, is responsible for contracting real property services such as architectural, engineering and facility maintenance services as well as construction services. It is separate and has different responsibilities from Real Property Branch (RPB), PWGSC, which manages a portfolio of real estate in Canada and is the Government of Canada's real property expert.

9.10.1 Real Property Contracting Procedures

(2010-01-11)

Although most of the generic practices and policies of the department apply to real property contracting, there are differences. Some of these differences are a result of complying with applicable legislation, or adapting to industry practices, or simply the realities of the services being procured. Many fundamental review processes and trade agreements also do not apply to real property requirements and some examples follow. The Procurement Review Committee does not apply to the acquisition, modification and routine maintenance of real property. The Expense Management Tool (EMT) Application for Registration form (PWGSC-TPSGC 514) does not apply to architectural and engineering nor construction requirements, and the Agreement on Internal Trade does not apply to architectural or engineering service contracts.
Clauses specific for real property contracting can be found in subsection 5-R of the Standard Acquisition Clauses and Conditions (SACC) Manual. Departmental standard procurement templates and many policies exclude some or all of real property contracting requirements and do not apply to real property requirements. SACC Manual clauses identified as mandatory may not apply to real property requirements. Standard Real Property Contracting (RPC) templates provide guidance to their contracting officers.
All real property contracting work performed by Acquisitions Branch (AB) must be in accordance with the Government Contracts Regulations. The Federal Real Property and Immovables Act applies to the sale and purchase of real property, and leases, including all work performed through a lease. Real Property Branch (RPB), not AB, is responsible for requirements carried out under the Act. In order to protect the integrity of AB's system data, no requirements under the Act should be entered into the AB system, that is, the Automated Buyer Environment (ABE).

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9.10.5 SELECT

(2010-01-11)

SELECT is a database of pre-qualified suppliers such as architects, engineers and construction trade contractors identified by their expertise and the services they provide. It is used by Public Works and Government Services Canada (PWGSC) to invite suppliers to bid on real property opportunities for consulting up to the North American Free Trade Agreement (NAFTA) threshold and construction up to the Agreement on Internal Trade (AIT) threshold. When there is a requirement for any of these services up to these thresholds, SELECT provides a systematic rotation functionality that matches the specifics of the requirement with suppliers having the required expertise that are within a geographic range and have the least points of opportunity. Depending on the requirement, a supplier may be given the opportunity to accept or decline the work, or multiple suppliers may be given the opportunity to compete for the requirement.
For consultant services estimated at $10,000 or less, SELECT generates a short list of three qualified suppliers. The most suitable and readily available supplier may be contacted directly. For consultant services estimated between $10,000 and the NAFTA threshold, SELECT identifies a single supplier that meets the discipline and experience profile requirements. In both of these cases, the approval authority is based on non-competitive contract entry. For consultant services below the NAFTA services threshold value, the SELECT system may also be used to pre-select suppliers from which bids can be solicited.
For construction services estimated at $10,000 or less, SELECT generates a short list of three qualified suppliers. The most suitable and readily available supplier may be contacted directly. For construction services estimated between $10,000 and $100,000, SELECT generates a short list of five qualified suppliers; however, the business practice in some locations is to select five to eight qualified suppliers, all of which are issued an invitation to tender. The supplier who submits the lowest-priced responsive offer is usually awarded the contract.

9.10.10 Architectural and Engineering Services

(2010-01-11)

When determining whether services approval authority apply also to architectural and engineering (A&E) services, the contracting officer should determine if a professional stamp is required for the deliverables. If a professional stamp is required, Treasury Board's approval authorities for A&E services will apply to the requirement. However, if a professional stamp is not required, then the normal service authorities will apply.
The contracting officer must determine the procurement strategy in consultation with the client. The proposed construction implementation methodology should also be discussed, as this will have an impact on the services provided by the A&E team. The main method of supply is the standard contract, but RPC also uses alternative methods of supply like standing offers, supply arrangements and open agreements. An open agreement is issued to only one supplier, which is identified by the SELECT system, and thus must not exceed the NAFTA threshold. Commitments are used to obtain services covered by the open agreements.
Due to the qualitative nature of the A&E industry, the submission of full design proposals represents a large investment of time, effort, and money on the part of consulting suppliers. In order to reduce the possibility of suppliers spending large amounts of money preparing such proposals for PWGSC projects, the Department traditionally utilizes a one-stage, two-phase Request for Proposal for A&E services. This methodology allows for suppliers to be point-rated in the 'first phase', based on their previous achievements and the experience of the proposed consultant team. Based on this rating, suppliers are better positioned to make a business decision, as to whether to continue to the 'second phase' in the process and submit full proposals at their own cost.

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9.10.15 Construction Services

(2010-08-16)

There are three primary methodologies used in the procurement of construction services for projects:
1. Design-Bid-Build (D-B-B);
2. Design-Build (D-B);
3. Construction Management (CM).
The roles, relationships and responsibilities of the contracting parties vary considerably for each methodology. Choosing the optimum methodology is a key consideration for the project team. For construction services, the project team is composed of Real Property Contracting (RPC) of the Real Property Branch (RPB) and the client.
Many variations exist for each approach and the selection of one methodology over another should be carefully analyzed by all stakeholders during the development of the risk management plan, well in advance of the procurement, in order to determine the inherent risks, advantages and disadvantages associated with each methodology. The selection of a particular methodology for the delivery of construction services is based upon an analysis of those risks identified in the plan that may impact the priority objectives of the project during the project's planning and implementation stages.
Each methodology has advantages and disadvantages and one may be more suitable than another for any given project. The project team must weigh both the benefits and the shortcomings of using a specific methodology on their project. Traditionally, PWGSC has accepted the D-B-B methodology as the standard delivery process for construction projects. Although it may be time consuming, D-B-B provides the project team with a better 'comfort level' concerning costs and quality. Since design is 100 percent complete before construction begins, changes should be minimal.
CM and D-B have been used extensively in the private sector, but used sometimes in PWGSC. A bid solicitation, in the form of a Request for Proposal, is used for both these methodologies in order to determine the successful supplier. Design-Build solicitations should also include an honorarium for at least three suppliers that continue to the phase two of the selection process to compensate them for work not normally required in the submission of a proposal.
RPC generally uses an invitation to tender for construction contracts, with a public opening shortly following the specified closing time. The tenders are generally evaluated on the basis of the lowest priced responsive tender. Suppliers must submit their tenders in accordance with the invitation to tender and associated specifications and drawings. Contracting officers should consult the Standard Acquisition Clauses and Conditions [SACC] Manual clause R2710T for information on the submission of bids.
Prequalification of suppliers is not normally done. If required, justification should be provided for prequalification and the criteria established to ensure that the industry can respond appropriately. Although a two-stage prequalification process may be necessary, a two-envelope process is the preferred method in construction. Suppliers are asked to submit two sealed envelopes, where envelope "A" will include the response to the prequalification requirements (almost always a pass/fail type of criteria). If the content of envelope "A" demonstrates that the supplier is qualified, the envelope "B", including the price and bid security, is normally opened publicly with other responsive bids.
For requirements over $100,000, contracting officers must use the construction terms and conditions imposed by Treasury Board Secretariat (see clauses in subsection 5-R of the Standard Acquisition Clauses and Conditions [SACC] Manual.). Bid security and contract security (clause R2890D) are also requirements above this threshold. Insurance requirements (clause R2910D) are included in subsection 5-R, but the client should identify if additional or specialized insurance is required.
The Federal Contractors Program and the review by the Procurement Review Committee do not apply to construction contracts.
The Minister of PWGSC has delegated to Real Property Branch (RPB) the ability to amend construction and maintenance contracts awarded by Acquisitions Branch (AB). This authority must be deducted from AB authorities to ensure that PWGSC does not exceed its overall authority from Treasury Board. The RPB Project Manager will submit, with the requisition, a risk management plan that will identify items that may result during the construction project. This plan will include a suggested dollar value called the "Risk Management Contingency". AB will review the plan and the suggested dollar value, and will establish an amount to seek approval for a Pre-approved Amount for Anticipated Amendments (PAAA).This amount will be used for subsequent amendments to the contract.

9.10.20 Elevator Maintenance Services

(2010-01-11)

For elevator maintenance services requirements, an invitation to tender must be used for PWGSC buildings. Only bids from suppliers whose names are on all the applicable Lists of Prequalified Elevator Maintenance Contractors for the province/territory and type of equipment to be maintained can be considered. The term of the contract is generally for a period of 25 years, and the basis of payment is for a fixed monthly rate, which is adjusted on a yearly basis. The total monthly amount is composed of an amount for material, labour and travel. The adjustment for labour will be made according to the hourly total compensation package regular rate, as published each year by the National Elevator and Escalator Association; the adjustment for materials will be according to the index of Electrical Equipment Manufacturing V3822755, as published by Statistics Canada, and the adjustment for travel expenses must be made in accordance with the Consumer Price Index for Canada (V1690973), as published by Statistics Canada.

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9.15 United States Foreign Military Sales

(2010-01-11)

This section provides details of the United States (U.S.) Foreign Military Sales (FMS) program and also describes the related responsibilities of Public Works and Government Services Canada (PWGSC) in relation to this program.

The Foreign Military Sales (FMS) is a Security Assistance Program which is administered by the U.S. Department of Defense (U.S. DoD) and which allows eligible foreign governments and international agencies to purchase defence-related articles, defence services and military training from the U.S. Government (USG). The U.S. DoD serves as an intermediary, handling procurement, logistics and delivery and often providing product support and training.
The FMS is a mutually beneficial government-to-government method for selling U.S defence equipment, services, and training. Responsible arms sales further U.S. national security and foreign policy objectives by strengthening bilateral defence relations, supporting coalition building, and enhancing interoperability between U.S. forces and militaries of friends and allies. These sales also contribute to U.S. prosperity by improving the U.S. balance of trade position, sustaining highly skilled jobs in the defence industrial base, and extending production lines and lowering unit costs for key weapon systems.
For more information regarding the FMS program, contracting officers may visit the following Defense Security Cooperation Agency Web sites: Foreign Military Sales www and the Security Assistance Management Material www.
The FMS will be considered as a method of procurement when the goods or services required relate to military equipment of U.S. origin and when, on the basis of the information available at the time, those goods and services are available or can be made available from the U.S. DoD.
When Public Works and Government Services Canada Headquarters (PWGSC [H]) determines that a requirement will be sole sourced to the U.S., the requisition must be reallocated to PWGSC Washington (PWGSC [W]). Decisions by PWGSC (H) to sole source requirements to the U.S. FMS program must be adequately documented.
As a minimum, the following information must be provided on form PWGSC-TPSGC 1062-1 (PDF Version 9KB), (Help on File Formats) or as an attachment to it, when allocating procurement to PWGSC (W):
1. the Goods and Services Identification Number (GSIN);
2. the trade agreement(s) applicable to the procurement;
3. if an Advance Contract Award Notice (ACAN) was published and its result;
4. the sole source justification for FMS and reference to the applicable rationale from Treasury Board regulations (see 3.15) or, if applicable, the trade agreements;
5. any other pertinent information leading to the decision to sole source to FMS such as Procurement Review Committee decisions for all requirements over $2M, client's justification, etc.
PWGSC (W), in its capacity as the sole accredited Canadian procurement agency to the U.S. DoD, will be the departmental agency responsible for dealing with the United States Government (USG) on all contractual matters directly related to FMS, and will coordinate all pertinent contract and administrative arrangements in the U.S. on behalf of PWGSC and its clients. Questions can be forwarded to the Director General, at phone number 202-682-7604.

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9.15.1 Planning

(2010-01-11)

Through its security assistance policy, the USG provides for various forms of security assistance to other nations. The FMS program is a large and complex program, which is administered by the U.S. DoD. In Canada, PWGSC, as well as the client, plays an important role in the implementation and maintenance of this program.
Transactions initiated within the FMS program are covered under basic categories of agreements (known as cases in the U.S. military organizations). The main categories are:
1. Defined Order Cases: Certain defence articles and services can be provided only on defined line cases, which may offer items at individually estimated prices and delivery dates. The USG, where necessary, in turn contracts for defence articles and services that are required to fulfill the Letter of Offer and Acceptance (LOA);
2. Blanket Order Cases (BOC) including Blanket Open End (BOE) arrangements through the U.S. Army, and Direct Requisitioning Procedures through the U.S. Navy: most repair parts and routine services can be offered under Blanket Order LOAs, which reduce the time needed for processing orders. These LOAs are perfectly suited for addressing subsequent needs, (i.e. where the client will require additional defence articles or services on a periodic basis). These agreements are similar to standing offers, allowing clients to submit requirements directly to the identified U.S. military organization. Support equipment including assemblies, components, special tools, test equipment, training aid devices, minor modifications performed at U.S. installations and repair and return services, training, etc., are usually the subject of BOC; and
3. Co-Operative Logistics Supply Support Arrangements, commonly referred to as COLOG in Canada and CLSSA in the U.S.: CLSSA is a unique arrangement whereby Canada is able to invest in the U.S. supply system and receive access to U.S. DoD stocks. This arrangement involves two separate FMS cases. The first FMS case covers Canada's investment in specific USG supply system items; the second FMS case is used to requisition these items.
PWGSC (H) will determine, before procurement through the FMS program is initiated, whether the provisions of the North American Free Trade Agreement or the World Trade Organization Agreement on Government Procurement apply and will take action accordingly. When these provisions do not apply, PWGSC will determine whether there is an existing or potential source of supply in Canada and after consultations with the Department of National Defence (DND), or any other client, and will establish whether in the circumstances, it would be more advantageous for the Government of Canada to procure in Canada or directly from the equipment manufacturer in the U.S. or from the U.S. DoD.
Quite often the weapon system can only be purchased through the FMS program. The Arms Export Control Act www gives the President discretion to designate which military end item must be sold through the FMS program exclusively. This discretion is delegated to the Secretary of Defence and is executed by the Defence Security Cooperation Agency in close coordination with the Defence Technology Security Administration and the Military Department (MILDEPT) or U.S. DoD component responsible for the end item. The Department of State approves or disapproves all sales, and is responsible for the continuous supervision and general direction of all sales. Four general criteria are used to determine if a sale is required to proceed through the FMS program: legislative/presidential restrictions; DoD/MILDEPT policy, directive or regulatory requirements, e.g., the National Disclosure Policy, government-to-government requirements and interoperability/safety requirements for U.S. Forces. The PWGSC (W) office will confirm with the client when the FMS program is the only solution.

9.15.5 Contracting Protocol

(2010-01-11)

Contracting with the U.S. DoD for the supply of material or for the provision of services on a government-to-government basis is affected through the exchange of a Letter of Request (LOR) prepared by PWGSC (W) and of a Letter of Offer and Acceptance (LOA) prepared by the U.S. LORs are sent to the applicable military department, the U.S. Department of State and Defence Security Cooperation Agency, a defence department agency that oversees security assistance programs.

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9.15.10 Time Frames

(2010-01-11)

The standard period of time for a response from the U.S. DoD to an LOR submitted by PWGSC (W) on behalf of Canada, is as follows:
1. 60 days from the date of receipt of the LOR for an official price and availability;
2. 120 days from the date of receipt of the LOR for an LOA not requiring notification to Congress;
3. 180 days from the date of receipt of the LOR for an LOA requiring notification to Congress, applicable to acquisitions of major defence equipment valued at $25M or more, or if the total case value exceeds $100M;
4. up to nine months in the case of technical data packages due to special inquiries or studies to be carried out.
It is not unusual to have LOAs and amendments exceed the projected targets based on the USG workloads and high priority cases required to support U.S. Foreign Policy.

9.15.15 Pricing and Payment

(2010-01-11)

An LOA is used to submit price estimates to the purchaser country, as well as include a projected payment schedule. FMS prices may include, but are not limited to, the cost of the item; non-recurring research and development (R&D) and production costs; packing and handling plus administrative surcharges. The item price is the same price that would be charged to any other purchaser, including the U.S. Armed Forces. PWGSC (W) ensures the actual payment schedules correlates to the actual work performed.
Once an LOA has been signed, the applicable MILDEPT buys the item or items from U.S. manufacturers. This purchase normally goes through U.S. DoD procurement channels, and may not happen quickly; the time lag between an LOA and a delivery can take a year or more, particularly for complex weapons systems. The price quoted in the LOA may not match the cost of the items upon delivery, though in fact most final prices fall below the original estimate. The final price is determined from actual contract costs and other surcharges, which must be charged in accordance with U.S. laws and regulations.

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9.15.20 Surcharges

(2010-01-11)

The Arms Export Control Act www states that the United States Government (USG) must manage the FMS program at no cost to the USG. The Act mandates collection of a percentage-based administrative surcharge on FMS cases to recover all applicable U.S. costs to execute, manage, and oversee the FMS program. This surcharge is assessed against the value of the FMS case. The work covered includes case writing, case management/execution (cost, schedule, performance), case closure and periodic reviews.
Small case management line: effective 1 August 2006, any case that would not collect at least $15,000 in administrative surcharges will include a small case management line to charge the difference in value between the administrative surcharge amount and $15,000.
FMS surcharges pay a significant amount of the salaries and operating costs of Security Assistance Organizations and other Defence Department personnel who carry out the FMS program.

9.15.25 Non-recurring Costs

(2010-01-11)

When requesting a proposal, PWGSC (W) sends a Letter of Request (LOR) to the U.S. DoD requesting them to identify if non-recurring costs (NRCs) are involved in the requirement. If the ensuing proposal/Letter of Offer and Acceptance (LOA) from the U.S. DoD includes NRCs, then PWGSC (W) pursues a waiver with Defence Security Cooperation Agency, before the signing of the LOA.

9.15.30 Release of Information

(2010-01-11)

The USG does not compete with U.S. industry for foreign sales and does not knowingly provide other governments with "comparison pricing information" especially when it is known that a commercial contract is being negotiated.

9.15.35 Processing of Documents

(2010-01-11)

When a decision is made to satisfy a requirement through FMS, the file is either wholly reallocated or extracted to PWGSC (W), after the initial requisition review is carried out by the receiving PWGSC organization (headquarters or region). PWGSC (W) will prepare the Procurement Plan/Contract Planning and Advance Approval (CPAA).
Material to be obtained through FMS must be identified by U.S. national stock numbers whenever possible. The second group of digits (country designator) must be 00 or 01. The designation 21, which indicates the presence of a Canadian number, is not acceptable and its use will cause the demand to be rejected.
PWGSC (W) will review each requisition to ensure the adequacy and appropriateness of the information. If satisfactory, PWGSC (W) will prepare and submit an LOR to the applicable U.S. DoD organization.
Upon receipt of the LOA, PWGSC (W) will carry out a verification to determine whether the LOA corresponds to the LOR and, if satisfactory, will request approval/concurrence as well as funding from the client department.
Following the acceptance of the LOA by PWGSC (W), funds are transferred from the Canadian client to the USG via a Canadian account at the Federal Reserve Bank in New York. The U.S. DoD will initiate no action until the transfer of funds has been completed.

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9.15.40 Contract Administration

(2010-01-11)

PWGSC (W) is responsible for contract administration including billing/payments and expediting delivery, except for COLOG.
PWGSC (W) may arrange program management reviews and/or status review meetings to allow clients to discuss related matters with representatives from the U.S. DoD.

9.15.45 Contract Amendments

(2010-01-11)

PWGSC (W) will negotiate contract amendments, when required.
When funds in certain contracts (cases) have not been fully expended, a case amendment extending the period of time to use up funding may be requested. This normally applies to arrangements where the scope of work is not affected.

9.15.50 Contract Closing

(2010-01-11)

When delivery is completed and final determination of cost is made, PWGSC (W) will initiate closing action and will seek finalization of accounts. PWGSC (W) will request a cheque payable to the Receiver General for Canada if funds are due to Canada. If funds are owed to the United States Government (USG), funds will be requested from the Canadian client.
Closure of FMS contracts involving procurement from commercial suppliers may take place years after delivery of material because of the need to audit and renegotiate certain requirements peculiar to the U.S. DoD procurement process. A minimum of two years is required to close out an FMS case after final delivery of the goods and/or services.
At the time of final closure, the estimated amounts in the LOA are changed to actual costs and a final statement of account is issued.

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9.20 Co-Operative Logistics and Blanket Order Cases with the U.S. DoD

(2010-01-11)

This section provides details of the Canada/United States (U.S.) of America Co-Operative Logistics (COLOG) Supply Support Arrangement (CLSSA) and describes specific responsibilities of Public Works and Government Services Canada (PWGSC) in relation to this supply support arrangement.
The COLOG/CLSSA was initially approved in 1965. PWGSC will make the necessary arrangements to establish with the USG the contractual instruments such as COLOG arrangements or blanket order cases (BOC), thus allowing the Canadian Department of National Defence (DND) to obtain directly from the U.S. Department of Defense (DoD), material and services, as required.

9.20.1 Requisition Receipt

(2010-01-11)

Contracting officers should refer to 9.15 or information concerning the requisition process of the U.S. FMS program.
The COLOG Operations Office in the Defence and Major Projects Sector (DMPS), Acquisitions Branch, will review requisitions for COLOG and BOC and provide support to these activities, as detailed under the Referral Program activities (see 9.20.20), on behalf of PWGSC.

9.20.5 Planning

(2010-01-11)

Under COLOG arrangements, a participating country is required to purchase an equity in the supply system of the appropriate service within the U.S. DoD through a Stock Level Case, which is adjusted as required, up or down, depending on usage. Canada has purchased an equity in each of the three U.S. Forces supply systems, U.S. Army, Air Force and Navy, on an as and when required basis, and pays for only those items it actually draws out of the systems.
Since U.S. law prohibits the U.S. DoD from expending its funds on speculative purchases for other than its own Forces, there is a requirement for deposits to be made usually monthly, in advance, by participating foreign nations. The amount of the deposit should correspond to the anticipated delivery value in the succeeding quarter.
A final accounting is carried out when all items have been delivered or cancelled and all discrepancies have been resolved. This accounting results in a contract amendment requiring either a final payment by Canada or a refund to Canada.

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9.20.10 Establishment and Renewal of a Stock Level Case (FMSO I)

(2010-01-11)

It is necessary to establish a Stock Level Case, also referred to as Foreign Military Sales Order (FMSO I), to obtain COLOG support from the U.S. DoD. When the U.S. Air Force, U.S. Army or U.S. Navy, as applicable, agrees to supply, through COLOG, spare parts to the Armed Forces of a foreign nation, the U.S. material managers involved will take action to augment the U.S. DoD supply systems to correspond to the client's anticipated requirement.
Stock Level Cases are negotiated as required.

9.20.15 Establishment of a Requisitioning Case (FMSO II)

(2010-01-11)

PWGSC establishes annually a Requisitioning Case, also known as a Foreign Military Sales Order (FMSO) II, before Department of National Defence (DND) is allowed to draw spare parts from the U.S. DoD supply systems.
PWGSC has delegated to DND the responsibility for placing orders directly with the U.S. Navy, the U.S. Army and the U.S. Air Force, as applicable, once the appropriate Stock Level Case (FMSO I) and Requisitioning Case (FMSO II) are in place. Requisitions for COLOG eligible items are transmitted directly by DND to U.S. DoD by means of a computer terminal linked to the U.S. Defense Automatic Addressing System Center, which provides direct access to the U.S. military supply systems.

9.20.20 Referral Program

(2010-01-11)

There are three aspects to the Referral Program:
1. referral of items with an extended price of US $20,000 at the time of requisitioning;
2. the Quarterly List of all items procured through COLOG;
3. the Annual List of items procured through COLOG.
This is not a part of the establishment of the contract but rather action that occurs after the contract is established and throughout the life of the contract as long as COLOG requisitions are submitted against the case.
The following summarizes the Referral Program:
1. When the extended price of an item is US $20,000 or more, the DND COLOG Office responsible for submitting requisitions through COLOG on the U.S. DoD systems, will provide information on demand to the PWGSC COLOG Operations Office (Defence and Major Projects Sector [DMPS]).
2. The purpose of this referral is to allow DMPS to review the procurement to determine whether procurement through Canadian and/or other sources is more advantageous to Canada.
3. The DMPS COLOG Operations Office coordinates the review with input from the PWGSC product managers as required.
4. If it is determined that the item is available from the Canadian industry, procurement action should be completed in Canada unless it is established that such action is not justifiable from a cost standpoint or that other conditions are unacceptable, particularly as they pertain to operational requirements. Similarly, if it is determined that the item is available at less cost from any other commercial source of supply, procurement action may be completed commercially unless it is established that such action is not justifiable from a total cost standpoint or that other conditions are acceptable, particularly as they pertain to operational requirement.
5. If the item cannot be procured through the Canadian or foreign-based companies, DND will be advised to demand it from the U.S. DoD through COLOG.
6. All referrals should be processed as expeditiously as possible. A full reply or at minimum, an interim reply will be provided to DND within 30 days of receipt of the referral.
7. The second portion of the demand Referral Program is that the DND COLOG Office, responsible for the COLOG program, will forward quarterly to DMPS a printout, which will list all procurement through COLOG over the last quarter, regardless of value or priority.
8. The third portion of the Referral Program is similar to the second portion except that it is based on an annual list being provided by DND of all procurement through COLOG for the last fiscal year. A similar review as the one performed for the quarterly reports may be conducted.
9. The purpose of these reviews is to provide an overview of procurement being done through COLOG over a period of time. This would not be visible with only a review of procurement of individual items with a value over US $20,000. This review will allow PWGSC to seek sources based on requirements demanded over time. Often supply of an individual item may not be attractive to a supplier; however, when procurement of individual items over a period of time is collectively viewed, the combined value may be very attractive to a supplier.

9.20.25 COLOG Termination

(2010-01-11)

If Canada decides to terminate COLOG arrangements, there is a process that varies with the U.S. DoD service involved, which will identify those items that Canada is liable to procure from the U.S. DoD.

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9.25 Use of the Defence Production Revolving Fund and Loan Account

(2010-01-11)

Under section 16 of the Defence Production Act, in particular, the Minister of Public Works and Government Services Canada (PWGSC) is authorized to acquire, utilize, store, maintain, transport, sell, exchange or otherwise dispose of defence supplies, services, projects, real or personal property. The Minister is also empowered to authorize loans or advances and loan guarantees. Expenditures incurred pursuant to the above authority are to be expended from the Consolidated Revenue Fund.

9.25.1 Program Description

(2010-01-11)

The Defence Production Loan Account (DPLA) provides PWGSC with an account to make loans or advances to aid in defence procurement such as working capital loans or advance payments on contracts and to make payment for such.
Although the Adjustment of Accounts Act of 1980 eliminated the term Defence Production Revolving Fund (DPRF) from the Defence Production Act, PWGSC was advised by Treasury Board that it will continue to designate and operate the DPRF for other than loan transactions. Thus the DPRF provides PWGSC with a budgetary account to purchase defence supplies, to make payment for such, and to get reimbursed out of an appropriation of a client (for example, Department of National Defence) or by an agent of Canada or by an associated government. The DPRF can be used for the following purposes:
1. finance the stockpiling of "essential" materiel or defence supplies;
2. advance production of defence supplies/materiel to permit workload smoothing of defence industrial facilities; and
3. temporarily fund the acquisition of defence supplies to meet urgent requirements, pending appropriation of funds to finance unplanned requirements.
As stated in the Defence Production Act, associated governments are the governments of the British Commonwealth and of the North Atlantic Treaty Organization, or the government of any other country designated by the Governor in Council, as being a country the defence of which is vital to Canada.
The DPRF was established for interim financing purposes, as it has to be reimbursed by a client or an associated government or whoever receives the finished product. As such, the DPRF can be used to make initial payments and subsequently recover such payments from the client. It is simply a temporary accommodation, and it would be illegal and improper to use it for a permanent commitment of any kind. Although the use of the DPRF requires that money expended will be reimbursed at the time delivery is made to the client, such use does not preclude the making of progress payments to suppliers and the interim recovery of these progress payments from the client.
Expenditures charged to the DPRF may be used for the following purposes:
1. Stockpiling of materials or substances, such as steel and oil, designated by the Governor in Council, as essential to the needs of the community. In such cases:
  1. an order-in-council is required;
  2. a client appropriation is not immediately required for stockpiling essential materials, but the cost of materials used must be recovered from the appropriation of the client.
2. Stockpiling of defence supplies, which Canada deems it advisable to maintain (certain defence supplies such as ammunition.) In such cases:
  1. an order-in-council is not required;
  2. although an appropriation is not immediately required for stockpiling defence supplies, Department of National Defence (DND) must reimburse the DPRF from an appropriation when the finished goods are delivered to DND.
  3. acquisition, storage or maintenance of defence supplies. In such cases:
    1. an order-in-council is not normally required;
    2. a client appropriation is required.
Loans or advances charged to the Defence Production Loan Account (DPLA) may be used for any purpose other than for capital assistance. When loans are involved:
1. an order-in-council is not required;
2. although an appropriation by the client is not immediately required, the liability for any loss must ultimately be covered from the appropriation of the client.
Losses sustained pursuant to a loan or an advance made against the DPLA can only be credited pursuant to an appropriation by Parliament.

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9.30 Purchases from CORCAN

(2010-01-11)

Correctional Service Canada (CSC) has sponsored a rehabilitation program within its institutions designed to train inmates so that after their release, they have a better chance of obtaining employment, based on the experience gained while in the program. This program is known as CORCAN. CORCAN is a key rehabilitation program of CSC. It is mandated to provide employment training and employability skills to offenders in federal correctional institutions in support of the social policy of the Government of Canada. For more information including contacts, contracting officers may refer to the Treasury Board Contracting Policy Notice 1999-2.
Goods and services acquired from CORCAN must be comparable in price, delivery, performance and quality to those that PWGSC would have received from private sector suppliers had they been awarded the same business.

9.30.1 Requisition Receipt

(2010-01-11)

In compliance with Cabinet Decision 320-74RD, dated May 16, 1974, Public Works and Government Services Canada (PWGSC), along with other federal government departments will, whenever possible, provide CORCAN with stable market outlets for its goods and services. This policy was reviewed and confirmed by Treasury Board on July 25, 1995.
Article 1018 2(d) of the North American Free Trade Agreement allows for the exemption of procurements relating to goods or services of prison labour. See article XXIII www of the World Trade Organization Agreement on Government Procurement and article 507(c) of the Agreement on Internal Trade for this exception.
When in receipt of a requisition for which the client has specified that CORCAN is the preferred source of supply, the contracting officer will support the award of the requirement to CORCAN and issue a Stores Transfer Order. The client needs not provide justification for purchasing CORCAN goods and services.
When CORCAN has not been specified as a source of supply but can meet the requirement, the contracting officer, wherever possible and in recognition of the potential benefits to be derived, will recommend to the client that CORCAN be considered as a source of supply.
There are a number of procurement methods available to access goods and services from CORCAN. Because CORCAN is part of the federal government, an order from CORCAN is not a purchase, it's a transfer of Canada assets between departments that is completed by making a request against CORCAN's unique supply arrangement/standing offer E60PQ-050000/001/PQ.

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9.30.5 Memorandum of Understanding

(2010-01-11)

Procurements from CORCAN must be carried out in accordance with the Memorandum of Understanding (MOU) ratified on 2 January 2001 by the Deputy Minister, PWGSC, and the Commissioner of Corrections, Correctional Services Canada. The MOU at Annex 9.1 outlines both PWGSC and CORCAN responsibilities.

9.30.10 Implementation

(2010-01-11)

Documentation of procurements from CORCAN will take the form of "Stores Transfer Orders", since these procurements are not contracts within the meaning of the Government Contracts Regulations (GCRs) and the Treasury Board (TB) Contracts Directive. Existing contract and amendment forms must be employed, and will be processed in the normal manner, with the following changes:
1. delete the word "CONTRACT" and substitute the words "STORES TRANSFER ORDER";
2. insert the following as the first item in the contract under "Description of Supplies and/or Services";
  "Stores Transfer Order. This is not a contract."
Although arrangements with CORCAN are not governed by the GCRs and the TB Contracts Directive, all existing departmental limits governing the approval of entry into and signing of contracts apply.
Authority limits established by the TB Contracts Directive apply to clients purchasing directly from CORCAN.

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9.35 Comprehensive Land Claims Agreements

9.35.1 General Information

(2010-01-11)

The federal government, represented by Indian and Northern Affairs Canada (INAC), has negotiated a number of Comprehensive Land Claims Agreements (CLCAs) with Aboriginal peoples. CLCAs are modern treaties that are based on the concept of continued Aboriginal rights and title to lands traditionally used and occupied by an Aboriginal group, which have not been dealt with by treaty or other legal means. No two agreements are exactly the same.
Comprehensive Land Claims Agreements (CLCAs) are law. The CLCA obligations are legally binding because they are contained in agreements signed by Canada and backed by legislation. They have also been granted quasi-constitutional status by virtue of section 35 of the Constitution Act (1982).
The procurement obligations of a specific CLCA apply to the portion of the procurement that involves deliveries of goods and/or services and/or construction to the settlement area of that CLCA. Most CLCAs include measures dealing with procurement, and although the procurement measures are not always identical in the various agreements, they are all aimed at increasing the opportunities of the aboriginal group signing the agreement to compete successfully for contracts in their settlement areas. Because the CLCAs are not identical, it is important to review each applicable agreement to determine the contracting obligations.
Procurement that is subject to CLCAs, and one or more of the trade agreements may involve special considerations (see 9.35.70 and 9.35.75). Furthermore, procurement that is subject to CLCAs, but not to any of the international trade agreements, must adhere to all procurement policies applicable to procurement not covered by international trade agreements, e.g. the Canadian Content Policy for requirements over $25,000.
For a procurement which has contracting activities that take place within Comprehensive Land Claims Settlement Areas (CLCSAs), contracting officers should consult the Acquisition Policy and Process Directorate (APPD), at telephone number 819-956-1025 or 819-956-5024, or forward enquiries to RCNAPPRERTGSAEA.NCRACQBCLCAPSAB@tpsgc-pwgsc.gc.ca for assistance with determining how a CLCA may affect the overall procurement strategy. APPD can assist contracting officers in identifying the CLCA contracting obligations and in developing methods of meeting them on a case-by-case basis. When requesting assistance from APPD, contracting officers should provide the following information about their procurements, to expedite their requests:
1. brief description of requirement;
2. final delivery location(s);
3. name of client department;
4. will the goods/services/construction be used by an aboriginal community?
5. will the procurement be set aside under the Procurement Strategy for Aboriginal Business (see 9.40.1)?;
6. applicable trade agreements, and/or reasons for exclusion from any trade agreements;
7. type of procurement instrument, e.g. contract, standing offer, supply arrangement;
8. solicitation method (competitive or sole source);
9. method of advertising e.g. MERX, source list;
10. estimated dollar value;
11. anticipated date of issuance of solicitation.
An online course on Aboriginal Considerations in Procurement (#C223E) is available by visiting the Canada School of Public Service's Campusdirect Website.

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9.35.5 Comprehensive Land Claims Agreements in Effect

(2010-01-11)

At present, there are 23 CLCAs (including 11, which fall under the Umbrella Final Agreement – Council for Yukon Indians) that have been given Royal Assent and are in effect. Most areas of Canada, north of the 60^th parallel are covered by a CLCA, i.e. Yukon, the Northwest Territories, and Nunavut. The only areas south of the 60^th parallel that are covered by CLCAs are the northern part of Quebec, the northern part of Labrador, and parts of British Columbia. There are currently no CLCAs for areas within Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia or Prince Edward Island.
The CLCAs that are in effect are listed below along with their approximate settlement areas. Where available, a link has been provided to the associated Treasury Board Contracting Policy Notice, which includes an excerpt of the CLCA contracting provisions. Otherwise, a link has been provided to the full text of the comprehensive land claims agreement on the Indian and Northern Affairs Canada Web site, along with references to the articles regarding contracting provisions.

9.35.5.1 Quebec

(2010-01-11)

James Bay and Northern Quebec Agreement (JBNQA) (1975), amended to include the Northeastern Quebec Agreement (1978): from the shores of James Bay and Hudson Bay to Labrador, covering approximately 50 percent of Quebec's land mass, mainly the northern portion of the province. The JBNQA has three aboriginal signatories, representing the Cree, Inuit and Naskapi of Quebec. The JBNQA contains conditions that apply to both the Cree and Inuit, as well as conditions that apply solely to the Cree, conditions that apply solely to Inuit, and conditions that apply solely to the Naskapi. The Nations map shows which communities are inhabited by Cree, Inuit and Naskapi, and therefore which conditions would apply. For communities not detailed on this map, contact Acquisition Policy and Process Directorate, at telephone number 819-956-1025 or 819-956-5024, or by e-mail at: RCNAPPRERTGSAEA.NCRACQBCLCAPSAB@tpsgc-pwgsc.gc.ca for more information on the applicable CLCAs contracting obligations.

Inuit Provisions:

James Bay and Northern Quebec Agreement (JBNQA), section 29.0 (Inuit Economic and Social Development);
Agreement Respecting the Implementation of the JBNQA (PDF Version 337KB), (Help on File Formats) Annex A, Part II (Inuit Employment and Contract Priority).

Cree Provisions: JBNQA, section 28.10 (Cree Participation in Employment and Contracts).

Naskapi Provisions: Northeastern Quebec Agreement, Section 18 and paragraph 20.20.

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9.35.5.5 Yukon, Northwest Territories, and Nunavut

(2010-01-11)

The Inuvialuit Final Agreement (1984): the islands and part of mainland along the Beaufort Sea (northwest portion of the Northwest Territories, including western portion of Victoria Island, all of Banks Island, Prince Patrick Island in the northern portion, and the western portion of Melville Island). Includes (but is not limited to) Holman, Inuvik, Mould Bay and Tuktoyaktuk. The Gwich'in Comprehensive Land Claims Agreement also covers Inuvik and Aklavik.
Gwich'in Comprehensive Land Claim Agreement (1992): parts of northeastern Yukon and northwest portion of the Northwest Territories. Includes (but is not limited to) Aklavik, Fort McPherson, Inuvik and Tsiigetchic. The Inuvialuit Final Agreement also covers Inuvik and Aklavik. A Yukon Transboundary Agreement, for the Tetlit Gwich'in claimant group, exists as Appendix "C" under this final agreement. Notification of procurement opportunities for both the Gwich'in CLCA and the Yukon Transboundary Agreement must be sent to the Gwich'in Tribal Council.
Nunavut Land Claims Agreement (1993): Northern Canada - includes districts of Franklin (central Nunavut), Keewatin (south-central Nunavut, northwest coast of Hudson's Bay area), Baffin Island (southeast portion of Nunavut) and Ellesmere Island (northern portion of Nunavut). Includes (but is not limited to) Arctic Bay, Arviat, Baker Lake, Bathurst Inlet, Cambridge Bay, Cape Dorest, Chesterfield Inlet, Clyde River, Eureka, Gjoa Haven, Grise Fiord, Hall Beach, Igloolik, Iqaluit, Kimmirut, Kugluktuk, Nanisivik, Pangnirtung, Pelly Bay, Pond Inlet, Povungnituk, Qikiqtarjuaq, Rankin Inlet, Repulse Bay, Resolute, Sanikiluaq, Taloyoak, Umingmaktok and Whale Cove.
Umbrella Final Agreement – Council for Yukon Indians (1993): The western portion of the Yukon Territory. The territory extends from the northern border of British Columbia to the southern border of the Inuvialuit land claims area, and includes eleven separate Comprehensive Land Claims Settlement Areas (CLCSAs).
1. First Nation of Nacho Nyak Dun Final Agreement (1995): Part of Yukon Territory covering Mayo and Stewart Crossing.
2. Champagne and Aishihik First Nations Final Agreement (1995): Part of Yukon Territory covering Haines Junction, Canyon Creek and Champagne.
3. Teslin Tlingit Council Final Agreement (1995): Part of Yukon Territory covering Teslin.
4. Vuntut Gwich'in First Nation Final Agreement (1995): Part of Yukon Territory covering Old Crow.
5. Selkirk First Nation Final Agreement (1997): Part of Yukon Territory covering Pelly crossing.
6. Little Salmon/Carmacks First Nation Final Agreement (1997): Part of Yukon Territory covering Carmacks.
7. Tr'ondëk Hwëch'in Final Agreement (1998): Part of Yukon Territory covering Dawson City.
8. Ta'an Kwach'an Council Final Agreement (2002) - see Chapter 22 of the CLCA: Part of Yukon Territory covering Lake Laberge.
9. Kluane First Nation Final Agreement (2004) - see Chapter 22 of the CLCA: Part of Yukon Territory covering Burwash Landing.
10. Kwanlin Dun First Nation Final Agreement (2005) - see Chapter 22 of the CLCA: Part of Yukon Territory covering Whitehorse.
11. Carcross/Tagish First Nation Final Agreement (2005) - see Chapter 22 of the CLCA: Part of Yukon Territory covering Carcross and Tagish.
Sahtu Dene and Metis Comprehensive Land Claim Agreement (1994): Northwestern part of the District of Mackenzie, including the communities of Colville Lake, Deline, Norman Wells, Fort Good Hope, and Tulit'a.
Tlicho Land Claims Agreement (2005) - Appendix B of TB CPN 2006-4: Part of the Northwest Territories and part of Western Nunavut. Includes, but is not limited to, Yellowknife, Rae-Edzo, Rae Lakes, Wha Ti and Wekweti.
Nunavik Inuit Land Claims Agreement www (2008) - see Chapter 13 of the CLCA: Part of the Nunavut Territory that is in the offshore area adjacent to, but not in, the James Bay and Northern Quebec settlement area.

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9.35.5.10 British Columbia

Nisga'a Final Agreement (2000) - does not include any contracting obligations: Part of the mid-western coast of British Columbia.
Tsawwassen Final Agreement www (2009) - does not include any contracting obligations: Part of the south-western coast of British Columbia.

9.35.5.15 Newfoundland and Labrador

Labrador Inuit Land Claims Agreement (2005) - Appendix A of TB CPN 2006-4: Part of Northeastern Quebec and part of Northern Labrador. Includes (but is not limited to) Hopedale, Makkovik, Nain, Postville and Rigolet.

9.35.10 National Park Agreements and DND Co-operation Agreements

(2010-01-11)

Contracting officers should also be aware that a number of National Park Agreements and DND Co-operation Agreements have been signed between individual departments and certain aboriginal groups. These agreements, which are listed below can be found in sections 7 to 10 of TBS Contracting Policy Notice 1997-8:
When advised by the client department, PWGSC will consider these co-operation agreements in the procurement process.

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9.35.15 Comprehensive Land Claims Agreements under Negotiation

(2010-01-11)

There are currently several Comprehensive Land Claims Agreements (CLCAs) under negotiation. Acquisition Policy and Process Directorate will advise contracting officers when new CLCAs come into effect.

9.35.20 Applicability of Comprehensive Land Claims Agreement Contracting Obligations

(2010-01-11)

If a procurement, or a portion thereof, includes the final delivery of goods, services, and/or construction, for any department, agency or Crown corporation of the federal government, to locations covered by CLCAs, then the contracting obligations of each applicable CLCA will apply to each associated portion of the procurement. The final delivery point(s), which are not necessarily the destination addresses detailed in the requisition, determine the applicability of a CLCA, not the origin of the requisition (i.e. ordering office).
Dollar Thresholds – A CLCA applies to any applicable procurement, regardless of dollar value.
Overlaps - Some CLCAs have settlement areas that overlap with the settlement areas of other CLCAs. In these cases, the obligations of both CLCAs will apply. For example, Inuvik, Northwest Territories (NWT) is situated within the settlement areas of both the Inuvialuit Final Agreement and the Gwich'in CLCA, and so the contracting obligations of both CLCAs will apply to the portion of the procurement with deliveries to Inuvik, NWT.
Urgent requirements must continue to be dealt with on a case-by-case basis, in a manner that is consistent with the provisions of the applicable CLCA.

9.35.25 Requirements Definition

(2010-01-11)

Under several CLCAs obligations, the requirements definition for a procurement must, whenever it is practical and consistent with sound procurement management:
1. avoid artificially inflated employment skills requirements (this is consistent with PWGSC's procurement principles);
2. give consideration to separating requirements into commodity or geographic groupings to permit smaller and more specialized firms to submit a bid/offer/arrangement.
For instance, the Nunavut Land Claims Agreement states the following:
"24.4.2 In inviting bids on government contracts in the Nunavut Settlement Area, the Government of Canada and the Territorial Government shall provide all reasonable opportunities to Inuit firms to submit competitive bids, and, in doing so, shall take, where practicable and consistent with sound procurement management, the following measures:
1. set the date, location, and terms and conditions for bidding so that Inuit firms may readily bid;
2. invite bids by commodity groupings to permit smaller and more specialised firms to bid;
3. permit bids for goods and services for a specified portion of a larger contract package to permit smaller and more specialised firms to bid;
4. design construction contracts in a way so as to increase the opportunity for smaller and more specialised firms to bid; and
5. avoid artificially inflated employment skills requirements not essential to the fulfilment of the contract."
The following CLCAs contain wording that is almost identical:
1. James Bay and Northern Quebec Agreement (Inuit portion);
2. Sahtu Dene and Metis Comprehensive Land Claim Agreement (Implementation Plan);
3. Labrador Inuit Land Claims Agreement; and
4. Nunavik Inuit Land Claims Agreement.

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9.35.30 Access to Aboriginally-owned Lands

(2010-01-11)

CLCAs make provisions for access to aboriginally-owned lands. Contracting officers should encourage clients to liaise with the appropriate directorate(s) within Indian and Northern Affairs Canada's Implementation Branch to determine whether the location of the contracting activity is subject to access provisions under the CLCA, and, if so, whether any access permits are required.

9.35.35 Notification of Procurement

(2010-01-11)

The most common obligation is the notification of the procurement that must be issued to the appropriate claimant group(s). For the procurement of goods, services and/or construction destined for locations covered by land claim agreements, a copy of a notice describing the procurement, e.g. the Notice of Proposed Procurement (NPP) or Advance Contract Award Notice (ACAN), must be faxed to all land claimant groups listed in Annex 9.2 for each of the applicable agreements, on the date of posting on the Government Electronic Tendering Service (GETS).
For procurements not posted on GETS, the contracting officer should send to the applicable land claimant groups a notice about the procurement, containing the same information that an NPP or ACAN would have contained. In such cases, contracting officers should allow the land claimant groups at least 15 calendar days to submit any enquiries before awarding a contract, although the CLCAs do not specify any waiting period.

9.35.40 Right of First Refusal

(2010-01-11)

Dependent upon the requirement, competition for a procurement may be restricted to businesses of the applicable CLCA.
For example, for the Inuit portion of the James Bay and Northern Quebec Agreement, the Agreement Respecting the Implementation of the JBNQA (PDF Version 337KB) (Help on File Formats), Annex A (Inuit Employment and Contract Priority), Part II states:
"8.1 Wherever practicable and consistent with sound procurement management, Canada will first solicit bids from within the Territory."

WHERE

"3.11 "Territory": means the area in the province of Quebec north of the 55^th parallel of latitude, as delineated in the JBNQA."
Furthermore, certain agreements contain a "right of first refusal" for the provision of certain commodities, i.e., business opportunities and ventures that are contracted out with respect to Parks and the right of first refusal to any new licenses to carry on economic activities related to wildlife and tourism.
Other agreements make provisions for giving CLCA beneficiaries "first consideration or first priority" in sourcing certain requirements, i.e., silviculture services, management of designated heritage sites, and first consideration in providing technical and support services for contracts related to surveying the land claims settlement area.
Contracting officers with CLCA procurements related to archaeology, forestry, heritage, parks, and/or surveying should consult the Acquisition Policy and Process Directorate, at telephone number 819-956-1025 or 819-956-5024, or by e-mail to: RCNAPPRERTGSAEA.NCRACQBCLCAPSAB@tpsgc-pwgsc.gc.ca for assistance.

9.35.45 Evaluation Criteria

(2010-01-11)

Several Comprehensive Land Claims Agreements (CLCAs) contain socio-economic evaluation criteria that, subject to Canada's international trade agreements (see 9.35.70), and whenever it is practical and consistent with sound procurement management, must be included in the solicitation document to provide CLCA beneficiaries with a fair opportunity for any spin-offs associated with socio-economic development. The document excerpts in Annex 9.3 specifically detail that consideration of socio-economic evaluation criteria is required for the following CLCAs:
1. James Bay and Northern Quebec Agreement - Inuit Portion
2. Inuvialuit Final Agreement
3. Nunavut Land Claims Agreement
4. Sahtu Dene and Métis Comprehensive Land Claims Agreement
5. Tlicho Land Claims Agreement
6. Nunavik Inuit Land Claims Agreement
7. Labrador Inuit Land Claims Agreement
In addition, solicitations subject to the Gwich'in Comprehensive Land Claims Agreement should include socio-economic evaluation criteria for the Gwich'in, whenever it is practical and consistent with sound procurement management, and subject to Canada's international trade agreements.
These evaluation criteria can be used as part of the assessment along with price, best value, delivery etc. Proof of efforts and/or commitments made by suppliers should include, but not be limited to, the names of persons or companies contacted and the nature of the undertakings at the time of the submission and as applicable.
Should the contracting officer decide that it is not practical and consistent with sound procurement management to include the CLCA evaluation criteria in a solicitation document, the contracting officer must document the supporting factors leading to this decision on the procurement file.
The CLCA evaluation criteria should also be considered in sole source negotiations in order to maximize socio-economic opportunities for CLCA beneficiaries.

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9.35.50 Methods of Solicitation

(2010-01-11)

Contracting officers must use the appropriate method of solicitation, i.e., the Government Electronic Tendering Service (GETS), telephone-buys, source lists, facsimile distribution, newspapers, or a combination of methods. Increased consideration should be given to advertising the procurement opportunity in local newspapers and/or other public venues due to the remoteness of some of the areas.

9.35.55 Solicitation Period

(2010-01-11)

A longer bidding period should be considered depending on the remoteness of some of the areas.

9.35.60 Business Directories/Lists

(2010-08-16)

Under several CLCAs, the land claimant groups have to prepare and maintain lists of CLCA beneficiary firms. The business directories/lists identify the types of the goods and services the firms can furnish.
For procurements posted on GETS, contracting officers should notify the CLCA beneficiary firms listed for the applicable commodities, in accordance with 4.75.35. For procurements not posted on GETS, contracting officers should use the firm lists to invite CLCA beneficiaries firms to submit a bid/offer/arrangement; this must not restrict the ability of any business, not on the list, to submit a bid/ offer/arrangement.
For a list of Inuit businesses for the James Bay and Northern Quebec Agreement and for the Nunavik Inuit Land Claims Agreement, consult the Nunavik Regional and Private Business Directory (PDF Version 603KB) (Help on File Formats) www.
For a list of Cree businesses for the James Bay and Northern Quebec Agreement, consult the Grand Council of the Crees telephone directory www.
For a list of Inuvialuit businesses in the Inuvialuit Settlement Region, consult the Inuvialuit Business List www.
For a list of Gwich'in businesses in the Gwich'in Settlement Area, consult the Gwich'in Business Directory www.
For a list of Inuit businesses in the Nunavut Settlement Area, consult the Inuit Firm Registry www.
For a list of Sahtu Dene and Metis businesses in the Sahtu Settlement Area, consult the Sahtu Business List www.
For more information on Tlicho businesses, visit the Tlicho Businesses www Web site.
For a list of Inuit businesses in the Labrador Inuit Settlement Area, consult the Nunatsiavut Government www website, click on "Departments", then click on "Education and Economic Development", then click on the appropriate business categories under "Inuit Business Directory."

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9.35.65 Application of CLCAs and the Procurement Strategy for Aboriginal Business

In certain cases, procurement subject to CLCA contracting obligations may also be subject to a set-aside under the Procurement Strategy for Aboriginal Business (PSAB). To the extent that the application of a PSAB set-aside does not interfere with CLCA contracting obligations, then both the CLCA and PSAB procedures may be applied, but when the two are in conflict, the CLCA contracting obligations take precedence.
If a procurement is subject to a CLCA, and that CLCA does not include a right of first refusal, the procurement can be restricted to aboriginal businesses under PSAB while still addressing the CLCA contracting obligations, including any CLCA evaluation criteria. A solicitation subject to a PSAB set-aside that addresses CLCA evaluation criteria must clearly define what constitutes a "CLCA beneficiary firm" to avoid confusion with the definition of "aboriginal business" under PSAB.
If, further to a right of first refusal under a CLCA, a procurement is reserved for CLCA beneficiaries, then the procurement cannot also be subject to a set-aside under PSAB.
For more information on PSAB, contracting officers should consult 9.40.

9.35.70 International Trade Agreements

(2010-01-11)

Contracting officers must determine whether a procurement subject to a CLCA is also covered by an international trade agreement (ITA), e.g., NAFTA and/or WTO-AGP. (See 1.25.5 and 1.25.10.)
All ITAs provide for set-asides for small and minority businesses, e.g. Article 1.(d) of Canada's General Notes (Word Version 34KB) (Help on File Formats) www of WTO-AGP and Article 1.(d) of Annex 1001.2b of NAFTA.
When a procurement is subject to an ITA, it can only be excluded from that ITA under the provision for "set-asides for small and minority businesses" if the procurement is completely restricted to aboriginal businesses. The procurement cannot be set-aside from the ITAs under this provision if the procurement is also open to non-aboriginal businesses. The sole fact that a procurement is subject to a CLCA does not exempt it from the ITAs.
The following are the options when a procurement is subject to both a CLCA and to an ITA:
1. If the CLCA provides the CLCA beneficiaries with a right of first refusal for the procurement, the procurement can be set-aside from the ITAs to be awarded to a CLCA beneficiary, since the right of first refusal will constitute a set-aside "for small and minority businesses" under the ITA;
  OR
2. If the CLCA does not provide the CLCA beneficiaries with a right of first refusal for the procurement, the procurement can be subject to PSAB, and this would constitute a set-aside for small and minority businesses under the ITAs .
  For option (i) or (ii), because the procurement will be set-aside from the ITAs for small and minority businesses, all CLCA contracting obligations can be addressed, including any CLCA evaluation criteria.
  
  OR
3. If no right of first refusal exists under the CLCA, and the procurement cannot be set-aside under the PSAB, the requirements of the ITAs will apply to the procurement. When a contracting officer is considering addressing CLCA evaluation criteria in a procurement that is subject to an ITA, the contracting officer must consult with Acquisition Policy and Process Directorate (APPD), at phone number 819-956-1025 or 819-956-5024, or by e-mail at: RCNAPPRERTGSAEA.NCRACQBCLCAPSAB@tpsgc-pwgsc.gc.ca, who will then consult with trade policy and legal counsel as appropriate.

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9.35.75 Agreement on Internal Trade

(2010-01-11)

Under Article 1802 of the Agreement on Internal Trade (AIT), the AIT does not apply to any measure adopted or maintained with respect to Aboriginal peoples. AIT does not apply to a procurement that is restricted to CLCA beneficiaries further to a right of first refusal under a CLCA.

9.35.80 Notice of Proposed Procurement

(2010-01-11)

For procurements subject to one or more CLCAs, contracting officers must insert a statement at the end of the text box in the Notice of Proposed Procurement (NPP), indicating the applicable CLCAs.
For example, for a procurement that is subject to the Inuvialuit Final Agreement would read as follows:

"This procurement is subject to the Inuvialuit Final Agreement."
Contracting officers must insert the following information at the beginning of the text box in the NPP for any procurement that is set-aside from an ITA for CLCA beneficiaries, further to a right of first refusal under the CLCA.
"This procurement is reserved for beneficiaries of the following Comprehensive Land Claims Agreement(s) (CLCAs): _____ (insert the applicable CLCA(s)) under _____ (insert the applicable CLCA chapter, article and paragraph numbers).

This procurement is set aside from the international trade agreements under the provision each has for set-asides for small and minority businesses. Further to Article 1802 of the Agreement on Internal Trade (AIT), AIT does not apply to this procurement.

9.35.85 Solicitations

(2010-01-11)

Standard Acquisition Clauses and Conditions (SACC) Manual clauses W0001T to W0004C, have been developed for solicitations, contracts and standing offers that involve unspecified final delivery locations within land claims settlement areas.
Contracting officers must insert clause W0005T at the beginning of a solicitation when a procurement is set-aside from the international trade agreements for CLCA beneficiaries, further to a right of first refusal under the CLCA.
Although additional CLCA clauses are available in subsection 5-W of the SACC Manual, contracting officers should contact Acquisition Policy and Process Directorate (APPD), at telephone number 819-956-1025 or 819-956-5024, or by e-mail at: RCNAPPRERTGSAEA.NCRACQBCLCAPSAB@tpsgc-pwgsc.gc.ca, for assistance with these clauses, and APPD will liaise with Legal Services, as appropriate.

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9.35.90 Standing Offers and Supply Arrangements

(2010-01-11)

Standing Offers (SOs) and supply arrangements (SAs) are also affected by CLCAs when any resulting contracts may involve deliveries to a location subject to a CLCA. Therefore, contracting officers must determine, in consultation with the client departments, if deliveries to CLCAs will be allowed under the SO/SA, in which case the applicable CLCA contracting obligations will have to be met.
Mandatory SOs/SAs - if a client's requirement is subject to CLCA contracting obligations, and no mandatory SO/SA addressing the contracting obligations of the applicable CLCA(s) exists, the client department is exempted from having to use the mandatory SO/SA.

9.35.95 Procurement Reporting

(2010-01-11)

As stated in 7.30, contracting officers must ensure that reporting on contracts subject to CLCAs is done accurately. All contracts subject to CLCAs must be coded as such; in the Automated Buyer Environment (ABE), this involves clicking the checkbox for CLCAs on the procurement summary. In addition, procurements restricted to CLCA beneficiaries under a right of first refusal must be coded as falling under the "Land Claims Set-aside Policy" and the "Set-asides for Small and Minority Businesses" derogation.

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9.40 Procurement Strategy for Aboriginal Business

(2010-01-11)

In accordance with the Procurement Strategy for Aboriginal Business (PSAB) announced on March 27, 1996, requirements designated by client departments as set aside under PSAB will be restricted to qualified Aboriginal businesses.

9.40.1 Decision to Set Aside a Procurement under PSAB

(2010-01-11)

The decision to set aside a procurement under PSAB is the responsibility of the client department. There are two types of PSAB set-asides: mandatory and voluntary.
Mandatory Set-Asides: Client departments must designate all procurements valued in excess of $5,000, and destined primarily for Aboriginal populations, as being restricted exclusively to qualified Aboriginal suppliers where operational requirements, best value, prudence and probity, and sound contracting management can be assured. Under TBS Contracting Policy Notice 1996-2,
"Aboriginal Population" means
1. an area, or community in which Aboriginal people make up at least 80 percent of the population;
2. a group of people for whom the procurement is aimed in which Aboriginal people make up at least 80 percent of the group."
Voluntary Set-Asides: Client departments may designate any procurement as being restricted exclusively to qualified Aboriginal suppliers. Contracting officers should assist client departments in meeting their performance objectives under the program, by drawing their attention to opportunities for voluntary PSAB set-asides, when qualified Aboriginal suppliers are known to exist in the marketplace.
PWGSC will not unilaterally declare a procurement set-aside under PSAB. However, following receipt of a requisition above $5,000, destined primarily for Aboriginal populations, but not designated as a PSAB set-aside, the contracting officer should contact the client department and draw their attention to the potential omission. If the client indicates that the procurement is not to be set aside under PSAB, the file should be annotated accordingly, and the procurement may then proceed.

9.40.5 Application of PSAB and CLCAs

(2010-01-11)

A procurement set-aside under the Procurement Strategy for Aboriginal Business (PSAB) may also be subject to contracting obligations of Comprehensive Land Claims Agreements (CLCAs). To the extent that the application of a PSAB set-aside does not interfere with CLCA contracting obligations, then both the CLCA and PSAB set-aside procedures may be applied, but where the two are in conflict, the CLCA contracting obligations take precedence. In some instances, the CLCA contracting obligations are limited to providing notification to the claimant groups of the upcoming procurement. In other instances, they are more extensive.
If a procurement is subject to a CLCA and that CLCA does not include a right of first refusal, the procurement can be set aside for aboriginal businesses under PSAB while still addressing the CLCA contracting obligations, including any CLCA evaluation criteria. A solicitation subject to a PSAB set-aside that addresses CLCA evaluation criteria must clearly define what constitutes a CLCA beneficiary to avoid confusion with the definition of "aboriginal business" under PSAB.
If, further to a right of first refusal under a CLCA, the procurement is reserved for CLCA beneficiaries, the procurement cannot also be subject to a PSAB set-aside.
Contracting officers should consult with Acquisition Policy and Process Directorate, at phone number 819-956-1025 or 819-956-5024, or by e-mail at: RCNAPPRERTGSAEA.NCRACQBCLCAPSAB@tpsgc-pwgsc.gc.ca, regarding CLCA contracting obligations. (See 9.35.15.)

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9.40.10 PSAB and Trade Agreements

(2010-01-11)

All international trade agreements provide for set-asides for small and minority businesses, e.g. Article 1.(d) of Canada's General Notes (Word Version 34KB) (Help on File Formats) www of the World Trade Organization Agreement on Government Procurement (WTO-AGP) and Article 1.(d) of Annex 1001.2b of the North American Free Trade Agreement (NAFTA). Therefore, a procurement set-aside under PSAB is excluded from coverage under the international trade agreements.
Pursuant to Article 1802 of the Agreement on Internal Trade (AIT), the AIT does not apply to any measure adopted or maintained with respect to Aboriginal peoples. AIT does not apply to a procurement that is restricted to Aboriginal businesses under PSAB.
Contracting officers must insert SACC Manual clause A3002T in bid solicitations for procurements that have been set aside under PSAB, when the procurement would have been otherwise subject to one or more trade agreements.
When a procurement is set-aside under PSAB and no aboriginal business submitted a responsive bid/offer/arrangement, then the solicitation must be reissued, either as a set-aside once again (after the necessary adjustments to the solicitation have been made), or under the procedures for the applicable trade agreement(s), taking into account the relevant thresholds, etc., which apply to the requirement, in the absence of a set-aside. This will also apply when the contract will not be awarded to an Aboriginal business because the contract award would conflict with sound contracting principles - best value, prudence and probity, etc. (See 9.40.25.)

9.40.15 PSAB and Canadian Content

(2010-01-11)

PSAB and the Canadian Content Policy may be applied simultaneously.
In applying the Canadian Content Policy under a set aside procurement, it must be recognized that there are two levels of certification. The first level of certification will be to qualify the supplier(s) as eligible for consideration, i.e., a supplier must provide certification that it is an Aboriginal business.
Having established that the procurement will be conducted as a PSAB set-aside, contracting officers must then apply the Canadian Content Policy in the same manner as any other procurement but in the context of the Aboriginal business supplier community. Contracting officers must determine whether there are sufficient eligible firms to carry out the procurement as solely limited (i.e., three or more Aboriginal businesses are able to provide Canadian goods or services), conditionally limited (i.e., there may be three or more Aboriginal suppliers of Canadian goods or services), or open (i.e., there is an insufficient number of Aboriginal businesses able to provide Canadian goods or services; the procurement is open to all Aboriginal businesses regardless of the origin of the goods and services supplied). (See 3.130.)
A bid/offer/arrangement for a set aside procurement, which includes the Canadian content provision, must be reviewed initially to determine whether the supplier has provided the necessary certificate that it is an Aboriginal business. Bids/offers/arrangements meeting this basic certification are then assessed according to the stated Canadian content criteria.

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9.40.20 Subcontracting Plans

(2010-01-11)

In support of PSAB, client departments may designate that a proportion of subcontracts on projects be reserved for Aboriginal business, or that suppliers are to be encouraged through the use of incentives - e.g., additional evaluation points to hire Aboriginal businesses as subcontractors. The inclusion of Aboriginal businesses as subcontractors must be clearly identified in the solicitation as an evaluation criterion. This is not permitted for procurements subject to the international trade agreements, e.g. NAFTA (Article 1006) or WTO-AGP (Article XVI www).

9.40.25 Sound Contracting Principles

(2010-01-11)

Fundamental to all PSAB procurements is the need to adhere to sound contracting principles. Contracting officers must always be cognizant of the principles of best value, prudence, probity, and operational requirements, in planning their procurement strategy for PSAB set-aside requirements.

9.40.30 Notification to Indian Northern Affairs Canada

(2010-01-11)

Upon receipt and acceptance of a requisition for a PSAB set-aside procurement, contracting officers must inform Business Partnerships Directorate, Indian and Northern Affairs Canada (INAC).
Notification to INAC must be sent, by fax or e-mail, before the release of the solicitation, to:
Indian and Northern Affairs Canada
Business Partnerships Directorate
Telephone: 819-956-9836 or 1-800-400-7677
Fax: 819-956-9837
E-mail: saea-psab@ainc-inac.gc.ca

The notification must include the following information:
1. estimated dollar value;
2. description of goods/services/construction;
3. solicitation number;
4. solicitation closing date; and
5. buyer (name, and phone/fax numbers).
In instances of sole source procurements, the notice to INAC must also include the name and address of the potential contractor.
Within 15 working days after contract award, the contracting officer must advise the Business Partnerships Directorate of the name of the contractor, the contract number, and the total estimated value of the contract.

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9.40.35 Sourcing of Requirements under PSAB Set-asides

(2010-01-11)

Procurements set aside under PSAB may be competitive or non-competitive according to current established government sourcing policies (see details on competitive and non-competitive at 3.10 and 3.15.) Aboriginal businesses may be invited to submit a bid/offer/arrangement in accordance with Public Works and Government Services Canada (PWGSC) policies and procedures.
Vendor Information Management (VIM) of PWGSC and "SELECT" systems allow for the identification of suppliers that have self-declared as being Aboriginal. The information in VIM and "SELECT" collected from supplier registrations and contract awards is useful to identify potential Aboriginal businesses for sourcing purposes, and establish source lists, regardless of commodity (goods, services, or construction), which would be subject to rotation regimes such as Automated Vendor Rotation System or "SELECT".
Businesses placed on "Aboriginal" source lists must also be placed on non-Aboriginal source lists.
Contracting officers may also access other sources, such as Industry Canada's Aboriginal Business Directory for more information on Aboriginal suppliers and to identify potential Aboriginal businesses which may be invited to submit a bid/offer /arrangement. Contracting officers may also contact Business Partnerships Directorate, INAC, directly by telephone at 819-956-9836 or 1-800-400-7677, or by e-mail at: saea-psab@ainc-inac.gc.ca.
When bids/offers/arrangements are solicited via the Government Electronic Tendering Service, notices (Notice of Proposed Procurement [NPP] or Advanced Contract Award Notice [ACAN]) must contain one of the following statement, prominently positioned, i.e., one of the first statements in the notice:
"This procurement has been set aside under the federal government's Procurement Strategy for Aboriginal Business (PSAB). In order to be considered, a supplier must certify that it qualifies as an Aboriginal business as defined under PSAB and that it will comply with all requirements of PSAB." (NPP);

OR

"This procurement has been set-aside under the federal government's Procurement Strategy for Aboriginal Business (PSAB). Only Aboriginal businesses as defined under PSAB are eligible to challenge the proposed procurement strategy to award the contract to the named Aboriginal business." (ACAN)
Contracting officers must ensure that for notices on GETS, the appropriate "Agreement Type" is selected for PSAB set-asides. For example, ABE users must indicate "Set-Aside Program for Aboriginal Business (SPAB)" in the "Trade Agreement" box of the Notice of Proposed Procurement.

9.40.40 Legal Entity

(2010-01-11)

The description of a business as an Aboriginal business does not affect the fact that in order to create an enforceable contract with Canada, the contract must be signed between Canada and a legal entity, which has the capacity to contract. In the event any uncertainty exists concerning the legal status of an Aboriginal business, contracting officers must consult with legal counsel to ensure that the proposed contractor is capable of signing an enforceable agreement.

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9.40.45 Certification by Suppliers

(2010-01-11)

For each procurement under the PSAB, suppliers will be required to provide, with their bid/offer/arrangement, a certification stating that they meet the definition of an Aboriginal business, according to the definition provided, on the date that the bid/offer/arrangement was submitted, and an undertaking that the business will continue to meet this definition throughout the life of the contract.
For a procurement subject to a PSAB set-aside, the contracting officer must insert in the solicitation, the Standard Acquisition Clauses and Conditions (SACC) Manual clauses A3000T, M9030T or S3035T, and A3001T, M3030T or S3036T, as appropriate. These clauses reference Annex 9.4, which sets out the definitions of an "Aboriginal business" and an "Aboriginal person".
SACC Manual clauses A3000T, M9030T and S3035T contain a certification that suppliers must complete and submit with their bid/offer/arrangement. Failure by suppliers to submit this completed certification form with their bids/offers/arrangements will render the bid/offer/arrangement non-responsive.
If a bidder/offeror/supplier has indicated in its bid/offer/arrangement that the Aboriginal business has six or more full-time employees, the contracting officer may request, during the evaluation or after, that a bidder/offeror/supplier submit an Owner/Employee Certification (detailed within SACC Manual clause A3001T or M3030T or S3036T), for each owner and/or full-time employee who is Aboriginal.
It is not the responsibility of the contracting officer to verify the supplier's certifications. In instances where the contracting officer questions the validity of a certification, the particulars must be referred to Business Partnerships Directorate, INAC, for audit by Audit Services Canada (ASC). (See 9.40.50(e).
Any resulting contract awarded on the basis of the supplier being Aboriginal must include SACC Manual clause A3000C.

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9.40.50 Audits of the Bidder/Offeror/Supplier Certification

(2010-01-11)

A bidder/offeror/supplier is required to certify in its bid/offer/arrangement that it is an Aboriginal business, as defined under PSAB (see Annex 9.4.) The certification includes an undertaking that the business will continue to meet the criteria, which define it as Aboriginal throughout the performance of the contract. A bidder/offeror/supplier's certification that it is Aboriginal is subject to audit, both before and after contract award.
Audit Services Canada (ASC) is the auditing authority under Memorandum of Understanding with Indians and Northern Affairs Canada (INAC) and will receive its instructions from INAC. ASC will contact the contracting officer for further information when an audit is required.
A pre-award audit is mandatory for requirements valued at $2M or more. To ensure that the mandatory requirement for pre-auditing is met, it is essential that the contracting officer properly notify INAC of such requirements, as per 9.40.30(b) above, and that the two best-assessed bids/offers/arrangements be submitted to INAC as per 9.40.50(f). The contracting officer must not award contracts of $2M or more until INAC has confirmed eligibility of the proposed contractor.
Pre-award audits of suppliers' certifications will be conducted on a random basis for requirements under $2M. INAC will advise the contracting officer whether a requirement is subject to pre-award audit no later than the date of solicitation closing (see 9.40.30(a)). Audits of suppliers' certifications are expected to require approximately 10 working days to be completed. When timing of contract award is an issue, this should be indicated in the notification to INAC, so that it may determine whether the auditing process can be expedited or the procurement excluded from the random selection.
Pre-award audits may be requested either by the requisitioning authority, the contracting officer, or INAC, whenever there is a doubt regarding the validity of bidders/offerors/suppliers' certifications, regardless of the total estimated expenditure of the procurement.
When INAC has advised that the requirement will be subject to a pre-award audit, the evaluation of bids/offers/arrangements will continue up to the point that the two "best assessed" bids/offers/arrangements have been identified. This information must be provided to INAC, minus any pricing information that will request ASC to undertake the pre-award audit of the bidders/offerors/suppliers' certification. Upon receipt of the results of the audit, INAC will advise the contracting officer. If the audit confirms the validity of the bidders/offerors/suppliers' certifications, award of the contract may proceed. If the audit determines that one or more of the certificates are invalid, the subject bidders/offerors/supplier(s) whose certifications have been declared invalid must be declared non-responsive, and the next-ranked bidder/offeror/supplier becomes the "recommended bidder/offeror/supplier". If the audit reveals that both certifications are invalid, the next-ranked supplier's certification must be referred to INAC for audit until either a bid/offer/arrangement with a valid certificate is obtained, or no bidders/offerors/suppliers remain. In the event that all bidders/offerors/suppliers are eliminated on the basis of invalid certifications, the solicitation must be reissued, either as a set-aside once again, or not set aside, after consultation with the client department. Whether the contract should be awarded to the next-ranked bidder/offeror/supplier, or the solicitation reissued, is a decision that must be made on a case-by-case basis, in keeping with sound contracting principles.
After contract award, the contractor's certification is subject to audit to confirm its status as an Aboriginal business during the life of the contract. Audits following contract award will normally be done on a random basis, however where contracting officers believe it to be necessary, audit of the contractor's continued status as an Aboriginal business may be requested of INAC.
If the Aboriginal business certificate is declared invalid, or if the contractor has not completed its undertaking to continue to qualify as an Aboriginal business, it may be necessary to implement civil or contractual remedies. Contracting officers should consult with Legal Services and Business Partnerships Directorate, INAC, in determining the appropriate action to be taken.

9.40.55 Bid Challenge

(2010-01-11)

Bid challenges should be dealt with according to established internal supplier complaint response procedures for procurements not subject to trade agreements.

9.40.60 Procurement Reporting

(2010-01-11)

As stated in 7.30, contracting officers must ensure that reporting on procurements subject to a PSAB set-aside is done accurately. All procurements subject to PSAB must be coded as such; in the Automated Buyer Environment (ABE), this involves clicking on "Trade Agreement" and selecting "Set-Aside Program for Aboriginal Business (SPAB)".

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9.45 Industrial and Regional Benefits Program

(2010-01-11)

Competition remains the cornerstone of the Canadian government procurement process. It is the most efficient way of achieving both the primary and secondary goals of procurement. It gives suppliers the incentive to bring forward their best solution to the operational problem, at a competitive price, as well as to respond more effectively to requirements in support of other national objectives. Moreover, competition ensures that all qualified suppliers are afforded access to government contracts. To this end, procurement initiatives in support of regional industrial development must, to the greatest extent possible, focus on assisting Canadian firms in becoming competitive in domestic and world marketplaces.
The Procurement Review Committee (PRC), in accordance with the Treasury Board (TB) Procurement Review Policy, reviews procurement strategies for goods and services over $2,000,000. For more information on the PRC and TB Procurement Review Policy, see 3.70.
Collectively, Industry Canada and the regional agencies/departments are responsible for the management of industrial and regional benefits.
The contracting officer is responsible for the contract in all aspects, including the contractor's commitments to regional and industrial benefits that form part of the contract. Industry Canada Industrial and Regional Benefits (IRB) managers are responsible for the day-to-day requirements of the program, while the contracting officer is responsible for the management of the contract. Should there be any failure to complete the work contracted under the IRB Program, it would fall to the remedies section of the contract to resolve any problems. It is through this process, even though an aspect of the contract may be managed separately, that the contracting officer must remain cognizant of the IRB requirement working with IRB managers early in the program and throughout the delivery of the contract.

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9.50 Communication Procurement

(2010-01-11)

Acquisitions Branch, Public Works and Government Services Canada (PWGSC), provides all optional and mandatory procurement services related to communications to federal departments and agencies.
Unlike other mainstream PWGSC procurement divisions, the Communication Procurement Directorate operates on cost recovery, charging a 3 percent fee for its procurement services in the areas of printing, communications, audio-visual, media monitoring, event management and expositions. The fee is based on the value of the contract award, including the Goods and Services Tax or the Harmonized Sales Tax, as applicable, and any amendments that increase the value of the contract. The fee does not apply to procurement services for advertising and public opinion research.
For more information, visit the Communication Procurement Web site.

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9.55 Canadian Commercial Corporation

(2010-01-11)

This section provides information on the roles and responsibilities of Canadian Commercial Corporation (CCC) and PWGSC and the Memorandum of Understanding between PWGSC and CCC.

9.55.1 General Information on CCC Contracts

(2010-01-11)

The CCC is a Crown corporation of the Government of Canada and acts as Canada's international contracting and procurement agency. As a parent of the Crown corporation under Schedule III, Part I of the Financial Administration Act, CCC reports to Parliament through the Minister of International Trade.
The CCC work mandate is to assist in the development of trade between Canada and other countries in areas where there is a clear role for the federal government. CCC helps foreign government buyers benefit from Canada's export capabilities through the negotiation and execution of government-to-government contracts. CCC accomplishes this by building unique relationships and maintaining international contracting and procurement expertise. For more information about CCC, contracting officers may visit the CCC www Web site.
CCC focuses on sectors where there is a clear role for government: operating in sectors that are sensitive or are outside of the World Trade Organizations' disciplines, such as defence, and where foreign governments require additional capacity to undertake complex and timely procurements, namely in emerging and developing country markets.
CCC offers two contracting options: by selling to foreign governments, taking on the role of prime contractor with a Canadian-based supplier; and by buying for foreign governments, taking on the role of a procurement agent and sourcing Canadian goods and services.
By agreement, the CCC is the prime contractor on all direct United States (U.S.) government contracts (over $25,000) with Canadian-based suppliers. CCC, in turn, subcontracts with the appropriate supplier. CCC guarantees to the U.S. government all commitments, obligations and covenants of CCC in connection with any contract or order issued to them.
Acquisitions Branch, PWGSC, provides contracting, contract management and other services related to CCC requirements. The PWGSC guidelines are provided in 9.55.15 and information regarding certification and signing authorities is provided in Chapter 6.

9.55.5 Subcontracting

(2010-01-11)

United States (U.S.) contracting officers usually rely on the prime contractor to select capable subcontractors, Canadian or otherwise.
There is no agreement between Canada and the U.S. regarding placement of subcontracts in Canada by U.S. prime contractors for the benefit of the U.S. government. Therefore, Defence Contract Management Agency Americas (Canada) (DCMAA), Ottawa, has no authority to request a Pre-Award Survey (PAS) in the subcontract situation. However, CCC and PWGSC have agreed to evaluate a Canadian subcontractor's capability to produce upon request from DCMAA (Canada).
In support of a request from a Canadian-based supplier, CCC will also procure stores or services from the U.S. government, when such stores or services are not available in Canada or at a reasonable cost from a commercial source outside Canada.
Moreover, CCC also responds to other federal government departments needs for supply arrangements in order to meet the Government of Canada's global development assistance commitments.

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9.55.10 Memorandum of Understanding

(2010-01-11)

CCC requirements must be carried out in accordance with the Memorandum of Understanding (MOU) of January 10, 2005, signed by PWGSC and CCC. The MOU at Annex 9.6 outlines both the responsibilities of PWGSC and CCC in relation to CCC requirements.

9.55.15 Certification and Signing Authorities

(2010-01-11)

Specific certification and signing authorities apply to CCC contracting documents. For more information, contracting officers should refer Annex 6.4.3 for these authorities.

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Annex 9.1: Memorandum of Understanding Between Public Works and Government Services Canada and CORCAN

(2010-01-11)

Appendix A
(2002-05-24)

Memorandum of Understanding Between
Public Works and Government Services Canada and CORCAN
(SOA of the Correctional Service of Canada)

This Memorandum of Understanding (MOU) supersedes the PWGSC/CSC agreement ratified on June 14, 1988.

1. Purpose

The purpose of this memorandum is to record agreement between the Department of Public Works and Government Services (PWGSC) and CORCAN (SOA of Correctional Service of Canada (CSC) with respect to orders placed by PWGSC for goods and/or services from CORCAN.

2. Basis for Preferential Access

In May 1974, in recognition of the social value of the training and employment of federally incarcerated offenders, Cabinet directed that, whenever possible, DSS (now part of PWGSC) and other government departments should provide correctional industries with adequate, stable and continuing market outlets for their manufactured goods.
By buying manufactured goods (office furniture, workstations, filing cabinet, dormitory furniture and furnishings) from CORCAN, the Government is lowering the cost of incarceration, and providing offenders with work related training which is essential for becoming self sufficient, law abiding citizens upon their release. For departments and agencies procuring CORCAN products, they are indeed buying truly Canadian materials and services that are backed by a sister agency, and saving a significant amount of time and energy because of a much simpler procurement process.

3. Requisites for PWGSC Business with CORCAN

PWGSC must maintain good customer and supplier relations. Therefore, in allocating business to CORCAN, PWGSC will consider the impact on customer departments and on Canadian suppliers likely to be affected, particularly small business.
PWGSC recognizes that CORCAN has the mandate to provide employment and training to federal offenders in order to give offenders the skills and attitudes they will need when they return to society and become productive employees. CORCAN does this by marketing the products and services produced by federal offenders.
PWGSC recognizes that the department should assist CORCAN with the promotion of CORCAN products.
CORCAN recognizes that it is the one primarily responsible for marketing its products.
Once business has been accepted, CORCAN must undertake to fulfill its obligations to PWGSC.
For all business allocated by PWGSC to CORCAN, the quality standards and delivery performance must be comparable to those which PWGSC would have demanded and received from private sector suppliers.

4. Pricing Policy

CORCAN product prices are to be comparable to the most recent prices contracted for with private sector suppliers for like products, quality and quantity.

5. Determination of Allocation

On receipt of a requisition for which the client has specified that CORCAN is the preferred source of supply, the contracting officer will support the award of all or part of a requirement to CORCAN.
When CORCAN has not been specified as a source of supply but can meet the requirement, the contracting officer, wherever possible and in recognition of the potential benefits to be derived, will recommend to the client that CORCAN be considered as a source of supply.
Except where a PWGSC analysis can demonstrate a prohibitive impact on a given Canadian industry, the share assigned to CORCAN will normally be limited only by the volume, which CORCAN is willing and able to provide.

6. Review Process

At the request of either party, PWGSC and CORCAN agree to conduct a review of this PWGSC/CSC Memorandum of Understanding.

7. Implementation

The CEO of CORCAN and the Director General, Supply Program Management Sector, PWGSC, are responsible for the review and implementation of this memorandum.

8. Term of Agreement

This Agreement is effective from date of signatures and will remain in effect until terminated by mutual agreement of both parties (see paragraph REVIEW PROCESS).

9. Signatures

Signed this ___2___ day of ____January___2001__, at_ Ottawa__.

______________________
Ranald A. Quail
Deputy Minister, PWGSC

______________________
Lucie McClung
Commissioner of the Correctional Service of Canada

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Annex 9.2: Notification of Procurement to CLCA Claimant Groups

(2010-01-11)

(See 9.35.35)

James Bay and Northern Quebec Agreement

Makivik Corporation
1111 Dr. Frederik-Philips Blvd., 3^rd Floor
St-Laurent, QC H4M 2X6
Telephone: 514-745-8880
Facsimile: 514-745-3700

Makivik Corporation
P.O. Box 179
Kuujjuaq, QC J0M 1C0
Telephone: 819-964-2935
Facsimile: 819-964-2613

Crees of Oujé-Bougoumou
203 Opemiska Meskino, Box 1166
Oujé-Bougoumou, QC G0W 3C0
Telephone: 418-745-3931
Facsimile: 418-745-3844

Grand Council of the Crees (of Québec)
81 Metcalfe Street, suite 900
Ottawa, ON K1P 6K7
Telephone: 613-761-1655
Facsimile: 613-761-1388

Naskapi Development Corporation
120-1000 St-Jean-Baptiste Avenue
P.O. Box 5023
Kawawachikamach, QC G2E 5G5
Telephone: 418-871-5100
Facsimile: 418-871-5254

Naskapi Nation of Kawawachikamach
P.O. Box 5111
Kawawachikamach, QC G0G 2Z0
Telephone: 418-585-2686
Facsimile: 418-585-3130

Inuvialuit Final Agreement

Inuvialuit Development Corporation
P.O. Bag # 7
Inuvik, NT X0E 0T0
Telephone: 867-777-2419
Facsimile: 867-777-3256

Inuvialuit Regional Corporation
P.O. Box 2120
Inuvik, NT X0E 0T0
Telephone: 867-777-2737
Facsimile: 867-777-2135

Gwich'in Comprehensive Land Claim Agreement

Gwich'in Tribal Council
P.O. Box 1509
Inuvik, NT X0E 0T0
Telephone: 867-777-7900
Facsimile: 867-777-7919

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Nunavut Land Claims Agreement

Nunavut Tunngavik Incorporated
Economic and Business Development Department
P.O. Box 638
Iqaluit, NU X0A 0H0
Telephone: 1-888-646-0006
Facsimile: 867-975-4949

Qikiqtani Inuit Association
P.O. Box 1340
Iqaluit, NU X0A 0H0
Telephone: 867-975-8400 or 1-800-667-2742
Facsimile: 867-979-3238

Qikiqtaaluk Corporation
P.O. Box 1228
Iqaluit, NU X0A 0H0
Telephone: 867-979-8400
Facsimile: 867-979-8433

Kakivak Association
P.O. Box 1419
Iqaluit, NU X0A 0H0
Telephone: 867-979-0911 or 1-800-561-0911
Facsimile: 867-979-3707

Kivalliq Inuit Association
P.O. Box 340
Rankin Inlet, NU X0C 0G0
Telephone: 867-645-2800 or 1-800-220-6581
Facsimile: 867-645-2348

Sakku Investments Corporation
P.O. Box 188
Rankin Inlet, NU X0C 0G0
Telephone: 867-645-2805
Facsimile: 867-645-2063

Kitikmeot Economic Development Commission
P.O. Box 1330
Cambridge Bay, NU X0B 0C0
Telephone: 867-983-2095
Facsimile: 867-983-2075

Nunasi Corporation
Corporate Controller
5107 48^th Street
Yellowknife, NT X1A 1N5
Telephone: 867-920-4587
Facsimile: 867-920-4592

Kitikmeot Inuit Association
Lands Division
P.O. Box 360
Kugluktuk, NU X0B 0E0
Telephone: 867-982-3310
Facsimile: 867-982-3311

Umbrella Final Agreement of the Council for Yukon Indians

Council of Yukon First Nations
2166 – 2^nd Avenue
Whitehorse, YT Y1A 4P1
Telephone: 867-393-9200
Facsimile: 867-668-6577

Champagne and Aishihik First Nations Final Agreement

Champagne and Aishihik First Nations
Box 5310
Haines Junction, YT Y0B 1L0
Telephone: 867-634-4200
Facsimile: 867-634-2108

Little Salmon/Carmacks First Nation Final Agreement

Little Salmon/Carmacks First Nation
P.O. Box 135
Carmacks, YT Y0B 1C0
Telephone: 867-863-5576
Facsimile: 867-863-5710

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First Nation of Nacho Nyak Dun Final Agreement

Nacho Nyak Dun First Nation
P.O. Box 220
Mayo, YT Y0B 1M0
Telephone: 867-996-2265
Facsimile: 867-996-2107

Selkirk First Nation Final Agreement

Selkirk First Nation
P.O. Box 40
Pelly Crossing, YT Y0B 1P0
Telephone: 867-537-3331
Facsimile: 867-537-3902

Teslin Tlingit Council Final Agreement

Teslin Tlingit Council
Box 133
Teslin, YT Y0A 1B0
Telephone: 867-390-2532
Facsimile: 867-390-2204

Vuntut Gwichin First Nation Final Agreement

Vuntut Gwichin
P.O. Box 94
Old Crow, YT Y0B 1N0
Telephone: 867-966-3213
Facsimile: 867-966-3800

Tr'ondëk Hwëch'in Final Agreement

Tr'ondëk Hwëch'in
P.O. Box 599
Dawson City, YT Y0B 1G0
Telephone: 867-993-5385
Facsimile: 867-993-6553

Ta'an Kwach'an Council Final Agreement

Mundessa Development Corporation
117 Industrial Road
Whitehorse, YT Y1A 2T8
Telephone: 867-668-3613
Facsimile: 867-667-4295

Kluane First Nation Final Agreement

Kluane First Nation
P.O. Box 20
Burwash Landing, YT Y0B 1H0
Telephone: 867-841-4274
Facsimile: 867-841-5900

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Kwanlin Dun First Nation Final Agreement

Kwanlin Dun First Nation
35 McIntyre Drive
Whitehorse, YT Y1A 5A5
Telephone: 867-633-7800
Facsimile: 867-668-5057

Carcross/Tagish First Nation Final Agreement

Carcross/Tagish First Nation
P.O. Box 130
Carcross, YT Y0B 1B0
Telephone: 867-821-4251
Facsimile: 867-821-4802

Sahtu Dene and Metis Comprehensive Land Claim Agreement

Fort Good Hope Metis Nation
Land Corporation, Local No. 54
Box 11
Fort Good Hope, NT X0E 0H0
Telephone: 867-598-2105
Facsimile: 867-598-2160
Attention: Economic/Business/Employment Officers

Ayoni Keh Land Corporation
c/o Colville Lake First Nation Band
Box 43, Colville Lake, NT X0E 1L0
Telephone: 867-709-2700
Facsimile: 867-709-2202
Attention: Economic/Business/Employment Officers

Déline Land Corporation
c/o Déline Dene Band Council
P.O. Box 156
Déline, NT X0E 0G0
Telephone: 867-589-8100
Facsimile: 867-589-8101
Attention: Economic/Business/Employment Officers

Tulita Land Corporation
c/o Fort Norman Dene Band
P.O. Box 36
Tulita, NT X0E 0K0
Telephone: 867-588-4984
Facsimile: 867-588-3997
Attention: Economic/Business/Employment Officers

Fort Norman Metis Land Corporation
c/o Fort Norman Metis Nation, Local No. 60
General Delivery
Tulita, NT X0E 0K0
Telephone: 867-588-3201
Facsimile: 867-588-3806/4908
Attention: Economic/Business/Employment Officers

Yamoga Lands Corporation
c/o Fort Good Hope Dene Band
P.O. Box 18
Fort Good Hope, NT X0E 0H0
Telephone: 867-598-2519
Facsimile: 867-598-2437
Attention: Economic/Business/Employment Officers

Ernie McDonald Land Corporation
c/o Norman Wells Metis Nation, Local No. 59
P.O. Box 69
Norman Wells, NT X0E 0V0
Telephone: 867-587-2455
Facsimile: 867-587-2545
Attention: Economic/Business/Employment Officers

The Sahtu Secretariat Incorporated
P.O. Box 155
Déline, NT X0E 0G0
Telephone: 867-589-4719
Facsimile: 867-589-4908
Attention: Economic/Business/Employment Officers

Sahtu Business Development Centre
P.O. Box 307
Norman Wells, NT X0E 0V0
Telephone: 867-587-2016
Facsimile: 867-587-2407
Attn: Economic/Business/Employment Officer

Tulita Yamoria Community Secretariat
P.O. Box 144
Tulita, NT X0E 0K0
Telephone: 867-588-3116
Facsimile: 867-588-3119
Attn: Economic/Business/Employment Officer

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Labrador Inuit Land Claims Agreement

Nunatsiavut Government
12 Sandbanks Road
P.O. Box 70
Nain, NL A0P 1L0
Telephone: 709-922-2942
Facsimile: 709-922-2931

Tlicho Land Claims Agreement

Tlicho Government
P.O. Box 412
Rae-Edzo, NT X0E 0Y0
Telephone : 867-392-6381
Facsimile : 867-392-6389

Nunavik Inuit Land Claims Agreement

Makivik Corporation
1111 Dr. Frederik-Philips Blvd., 3^rd Floor
St-Laurent, QC H4M 2X6
Telephone: 514-745-8880
Facsimile: 514-745-3700

Makivik Corporation
P.O. Box 179
Kuujjuaq, QC J0M 1C0
Telephone: 819-964-2935
Facsimile: 819-964-2613

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Annex 9.3: Comprehensive Land Claims Agreements Evaluation Criteria

(2010-01-11)

(See 9.35.45)

1. James Bay and Northern Quebec Agreement (JBNQA)- Inuit Portion

The Agreement Respecting the Implementation of the JBNQA (PDF Version 337KB) (Help on File Formats), Annex A (Inuit Employment and Contract Priority), Part II, Article 7.0 states,

"Whenever practicable and consistent with sound procurement management, all of the following criteria, or as many as may be appropriate with respect to any particular government contract, shall be included in the bid evaluation criteria established by Canada for the awarding of government contracts in the Territory:

the contribution by Inuit in carrying out the contract, which will include, but shall not be limited to, the employment of Inuit labour, the engagement of Inuit professional services or the use of Inuit suppliers;
the existence or creation of permanent head offices, administrative offices or other facilities in the Territory; and,
the undertaking of commitments, under the contract, with respect to on-the-job training or skills development for the Inuit."

2. Inuvialuit Final Agreement

Treasury Board Contracting Policy Notice 1997-8, Section 2, paragraph 6.00 states:

"When establishing bid evaluation criteria for the awarding of government contracts, and whenever practicable and consistent with sound procurement management, contracting authorities should consider the potential contribution of the Inuvialuit in carrying out the contract. This may include, as appropriate:

the employment of Inuvialuit, the engagement of Inuvialuit professional services and the use of Inuvialuit suppliers,
the creation of administrative offices or other facilities in the Inuvialuit Settlement Region,
the undertaking of commitments, under the contract, with respect to related on-the-job training or skills development for Inuvialuit."

3. Nunavut Land Claims Agreement

Article 24.6.1 of the Nunavut Land Claims Agreement states,

"Whenever practicable, and consistent with sound procurement management, and subject to Canada's international obligations, all of the following criteria, or as many as may be appropriate with respect to any particular contract, shall be included in the bid criteria established by the Government of Canada for the awarding of its government contracts in the Nunavut Settlement Area:

the existence of head offices, administrative offices or Other facilities in the Nunavut Settlement Area;
the employment of Inuit labour, engagement of Inuit professional services, or use of suppliers that are Inuit or Inuit firms in carrying out the contracts; or
the undertaking of commitments, under the contract, with respect to on-the-job training or skills development for Inuit."

4. Sahtu Dene and Métis Comprehensive Land Claims Agreement

The Implementation Plan for the Sahtu Dene and Metis Comprehensive Land Claim Agreement, Annex A, Project 12-3 states:

"Whenever practicable and consistent with sound procurement management, and subject to Canada's international obligations, all of the following criteria, or as many as may be appropriate with respect to any particular contract, shall be included in the bid criteria for the awarding of government contracts in the Sahtu settlement area:

the existence or creation of head offices, administrative offices or other facilities in the Sahtu settlement area;
the employment of participants labour, engagement of participants professional services, or use of suppliers that are participants or Sahtu Dene and Metis firms in carrying out the contract; or
the undertaking of commitments, under the contract, with respect to on-the-job training or skills development for the participants."

5. Tlicho Land Claims Agreement

The Tlicho Agreement Implementation Plan, Annex A, Sheet 26-3, Article 2, Planning Assumptions, states:

"In order to stimulate socio-economic benefits through the procurement process, and whenever practicable and consistent with sound procurement practices, and subject to Canada's international obligations, all of the following criteria, or as many as may be appropriate with respect to any particular contract, shall be included in the bid evaluation criteria for the awarding of government contracts which are wholly or partly in Môwhì Gogha Dè Nîîtåèè (NWT):

the inclusion of an Aboriginal Benefits Plan which will assist with socio-economic development projects which are wholly or partly in Môwhì Gogha Dè Nîîtåèè (NWT); or
the employment of Tlicho First Nation labour, engagement of Tlicho First Nation professional services, or use of suppliers that are Tlicho which can act as sub-contractors in assisting with the carrying out of the contract; or
the undertaking of commitments, under the contract, with respect to on-the-job training or skills development for Tlicho Citizens."

6. Nunavik Inuit Land Claims Agreement

Article 13.3.4 of the Nunavik Inuit Land Claims Agreement www states,

"Whenever practicable and consistent with sound procurement management, and subject to Canada's international obligations, all of the following criteria, or as many as may be appropriate with respect to any particular contract, shall be included in the bid criteria established by the Government of Canada for the awarding of its government contracts for the procurement of goods and services in the Nunavik Marine Region (NMR):

the existence of head offices, administrative offices or other facilities in the NMR;
the employment of Nunavik Inuit labour, engagement of Nunavik Inuit professional services, or use of suppliers that are Nunavik Inuit or Nunavik Inuit enterprises in carrying out the contracts; and
the undertaking of commitments, under the contract, with respect to on-the-job training or skills development for Nunavik Inuit."

7. Labrador Inuit Land Claims Agreement

Article 7.10.4 of the Labrador Inuit Land Claims Agreement states,

"Whenever practicable and consistent with sound procurement practices, and subject to Canada's international obligations, the following criteria, or as many as may be appropriate with respect to any particular contract, shall be included in the bid criteria established by the Government of Canada for the awarding of Government of Canada contracts for the procurement of goods and services in the Labrador Inuit Settlement Area:

the existence of the head office, administrative offices or other facilities in the Labrador Inuit Settlement Area;
the employment of Inuit labour, engagement of Inuit professional services or use of suppliers that are Inuit Businesses in carrying out the contracts; and
the undertaking of commitments, under the contract, with respect to on the job training or skills development for Inuit."

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Annex 9.4: Requirements for the Set-aside Program for Aboriginal Business

(2010-01-11)

(See 9.40.45)

1. Who is eligible?

An Aboriginal business, which can be:
1. a band as defined by the Indian Act
2. a sole proprietorship
3. a limited company
4. a co-operative
5. a partnership
6. a not-for-profit organization
in which Aboriginal persons have at least 51 percent ownership and control,

OR
A joint venture consisting of two or more Aboriginal businesses or an Aboriginal business and a non-Aboriginal business(es), provided that the Aboriginal business(es) has at least 51 percent ownership and control of the joint venture.

When an Aboriginal business has six or more full-time employees at the date of submitting the bid, at least thirty-three percent of them must be Aboriginal persons, and this ratio must be maintained throughout the duration of the contract.

The supplier must certify in its submitted bid that it is an Aboriginal business or a joint venture constituted as described above.

2. Are there any other requirements attached to suppliers in the Set-Aside Program for Aboriginal Business?

Yes

In respect of a contract, (goods, service or construction), on which a supplier is making a proposal which involves subcontracting, the supplier must certify in its bid that at least thirty-three percent of the value of the work performed under the contract will be performed by an Aboriginal business. Value of the work performed is considered to be the total value of the contract less any materials directly purchased by the contractor for the performance of the contract. Therefore, the supplier must notify and, where applicable, bind the subcontractor in writing with respect to the requirements that the Aboriginal Set-Aside Program (the Program) may impose on the subcontractor or subcontractors.
The supplier's contract with a subcontractor must also, where applicable, include a provision in which the subcontractor agrees to provide the supplier with information, substantiating its compliance with the Program, and authorize the supplier to have an audit performed by Canada to examine the subcontractor's records to verify the information provided. Failure by the supplier to exact or enforce such a provision will be deemed to be a breach of contract and subject to the civil consequences referred to in this document.
As part of its bid, the supplier must complete the Certification of Requirements for the Set-Aside Program for Aboriginal Business (certification) stating that it:
1. meets the requirements for the Program and will continue to do so throughout the duration of the contract;
2. will, upon request, provide evidence that it meets the eligibility criteria;
3. is willing to be audited regarding the certification; and
4. acknowledges that if it is found NOT to meet the eligibility criteria, the supplier shall be subject to one or more of the civil consequences set out in the certification and the contract.
See Standard Acquisition Clauses and Conditions (SACC) Manual clauses A3000T, M9030T or S3035T, as appropriate.

3. How must the business prove that it meets the requirements?

It is not necessary to provide evidence of eligibility at the time the bid is submitted. However, the business should have evidence of eligibility ready in case it is audited.
The civil consequences of making an untrue statement in the bid documents, or of not complying with the requirements of the Program or failing to produce satisfactory evidence to Canada regarding the requirements of the Program, may include: forfeiture of the bid deposit; retention of the holdback; disqualification of the business from participating in future contracts under the program; and/or termination of the contract. In the event that the contract is terminated because of an untrue statement or non-compliance with the requirements of the Program, Canada may engage another contractor to complete the performance of the contract and any additional costs incurred by Canada shall, upon the request of Canada, be borne by the business.

4. What evidence may be required from the business?

Ownership and control
1. Evidence of ownership and control of an Aboriginal business or joint venture may include incorporation documents, shareholders' or members' register; partnership agreements; joint venture agreements; business name registration; banking arrangements; governance documents; minutes of meetings of Board of Directors and Management Committees; or other legal documents.
2. Ownership of an Aboriginal business refers to "beneficial ownership" i.e., who is the real owner of the business. Canada may consider a variety of factors to satisfy whether Aboriginal persons have true and effective control of an Aboriginal business. (See Appendix A for a list of the factors, which may be considered by Canada.)
Employment and employees
1. Where an Aboriginal business has six or more full-time employees at the date of submitting the certification and is required by Canada to substantiate that at least 33 percent of the full-time employees are Aboriginal, the business must, upon request by Canada, immediately provide a completed Owner/Employee Certification form for each full-time employee who is Aboriginal. See SACC Manualclauses A3001T, M3030T or S3036T, as appropriate.
2. Evidence as to whether an employee is or is not full-time and evidence as to the number of full-time employees may include payroll records, written offers for employment, and remittance and payroll information maintained for Canada Revenue Agency purposes as well as information related to pension and other benefit plans.
3. A full-time employee, for the purpose of this program, is one who is on the payroll, is entitled to all benefits that other full-time employees of the business receive, such as pension plan, vacation pay and sick leave allowance, and works at least 30 hours a week. It is the number of full-time employees on the payroll of the business at the date of bid submission that determines the ratio of Aboriginal to total employees of the business for the purpose of establishing eligibility under the Program.
4. Owners who are Aboriginal and full-time employees who are Aboriginal must be ready to provide evidence in support of such status. The Owner/Employee Certification to be completed by each owner and full-time employee who is Aboriginal shall state that the person meets the eligibility criteria and that the information supplied is true and complete. This certification shall provide the person's consent to the verification of the information submitted.

5. Subcontracts

Evidence of the proportion of work done by subcontractors may include contracts between the contractor and subcontractors, invoices, and paid cheques.
Evidence that a subcontractor is an Aboriginal business (where this is required to meet the minimum Aboriginal content of the contract) is the same as evidence that a prime contractor is an Aboriginal business.

6. Who is an Aboriginal Person for Purposes of the Set-Aside Program for Aboriginal Business?

An Aboriginal person is an Indian, Metis or Inuit who is ordinarily resident in Canada.
Evidence of being an Aboriginal person will consist of such proof as:
1. Indian registration in Canada;
2. membership in an affiliate of the Metis National Council or the Congress of Aboriginal Peoples, or other recognized Aboriginal organizations in Canada;
3. acceptance as an Aboriginal person by an established Aboriginal community in Canada;
4. enrolment or entitlement to be enrolled pursuant to a comprehensive land claim agreement;
5. membership or entitlement to membership in a group with an accepted comprehensive claim;
6. evidence of being resident in Canada includes a provincial or territorial driver's licence, a lease or other appropriate document.

Appendix A Set-aside Program for Aboriginal Business

(Excerpt from Treasury Board Contracting Policy Notice 1996-6, Annex A.)

Factors that may be considered in determining whether Aboriginal persons have at least 51% ownership and control of an Aboriginal business include:

capital stock and equity accounts, i.e., preferred stock, convertible securities, classes of common stock, warrants, options;
dividend policy and payments;
existence of stock options to employees;
different treatment of equity transactions for corporations, partnerships, joint ventures, community organizations, cooperatives, etc.;
examination of charter documents, i.e., corporate charter, partnership agreement, financial structure;
concentration of ownership or managerial control in partners, stockholders, officers trustees and directors-based definition of duties;
principal occupations and employer of the officers and directors to determine who they represent, i.e., banker, vested ownerships;
minutes of directors meetings and stockholders meetings for significant decisions that affect operations and direction;
executive and employee compensation records for indication of level of efforts associated with position;
nature of the business in comparison with the type of contract being negotiated;
cash management practices, i.e., payment of dividends - preferred dividends in arrears;
tax returns to identify ownership and business history;
goodwill contribution/contributed asset valuation to examine and ascertain the fair market value of non-cash capital contributions;
contracts with owners, officers and employees to be fair and reasonable;
stockholder authority, i.e., appointments of officers, directors, auditors;
trust agreements made between parties to influence ownership and control decisions;
partnership - allocation and distribution of net income, i.e., provision for salaries, interest on capital and distribution share ratios;
litigation proceedings over ownership;
transfer pricing from non-Aboriginal joint venture;
payment of management or administrative fees;
guarantees made by the Aboriginal business;
collateral agreements.

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Annex 9.5: Procurement Strategy for Aboriginal Business Set-aside Checklist

(2010-01-11)

Has the client indicated that the requirement has been set aside? (See 9.40.1)
1. If no, and:
  1. The procurement is destined primarily for Aboriginal populations, and over $5,000, the contracting officer should draw the client's attention to the potential omission;
  2. Known qualified Aboriginal suppliers exist, the contracting officer should draw the client's attention to the potential for a voluntary Procurement Strategy for Aboriginal Business (PSAB) set-aside; or
  3. Neither (i) or (ii) above apply, or the client confirms that the procurement is not to be set-aside under PSAB, process the requirement according to standard procurement policies and procedures.
2. If yes, see below:
If the procurement is subject to Comprehensive Land Claims Agreements (CLCAs), determine the extent to which CLCAs and the PSAB set-aside conflict. In cases of conflict, CLCAs take precedence. (See 9.40.5.)
Has the client indicated a requirement for subcontracting to Aboriginal business? (See 9.40.20.)
Notify Business Partnership Directorate, Indian and Northern Affairs Canada (INAC), of receipt of set aside requirement. (See 9.40.30(a).)
Solicitation includes the document Requirements for the Set-aside Program for Aboriginal Business (Annex 9.4) and Standard Acquisition Clauses and Conditions Manual (SACC) clauses:
1. A3002T, if applicable;
2. A3000T, M9030T or S3035T, as appropriate; and
3. A3001T, M3030T or S3036T, as appropriate. (See 9.40.10 and 9.40.45(c).)
Source requirement according to established policies and procedures, source list, Government Electronic Tendering Service, etc. (See 9.40.35(b).)
Notice of Proposed Procurement (NPP)/Advanced Contract Award Notice (ACAN): Include a clear statement that the procurement has been set aside and that only Aboriginal businesses will be eligible. (See 9.40.35(e).)
Has INAC advised that the procurement is/is not subject to pre-award audit of certifications before solicitation closing? (See 9.40.50(f).)
Have all bidders/offerors/suppliers provided signed certificates of eligibility with their bids/offers/arrangements? (See 9.40.45(d).)
Evaluation of bids/offers/arrangements according to established criteria.
Advice to INAC of two "best-assessed" responsive bidders/offerors/suppliers (without financial information) if procurement subject to pre-award audit. (See 9.40.50(f).)
Has INAC advised regarding results of pre-award audit of certificates of eligibility? (See 9.40.50(f).)
Award contract in accordance with established evaluation criteria and result of pre-award audit, if applicable. Any resulting contract issued on the basis of the supplier being Aboriginal must include SACC Manual clause A3000C.
Advise INAC of contract award within 15 working days. (See 9.40.30(c).)
Contract management including advice to INAC regarding changes in contractor's status as an Aboriginal business, or requests to INAC to verify continued status (post-award audit). (See 9.40.50(h).)
The procurement reporting of the set aside under PSAB has been done accurately. (See 9.40.60.)

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Annex 9.6: Memorandum of Understanding - Canadian Commercial Corporation / Public Works and Government Services Canada

(2010-01-11)

The following is a copy of the Memorandum of Understanding between Canadian Commercial Corporation and Department of Public Works Government Services.

THIS MEMORANDUM OF UNDERSTANDING made in duplicate as of the 10th day of January 2005.

BETWEEN: Canadian Commercial Corporation ("CCC") as represented by the President

AND: Department of Public Works Government Services ("PWGSC") as represented by the Assistant Deputy Minister, Acquisitions Branch

WHEREAS the primary objective of CCC, as legislated by the Government of Canada, is to facilitate increased trade between Canada and other nations, which has principally been done through export contract arrangements for a broad range of goods and services at a minimum risk to both CCC and the Canadian taxpayer;

WHEREAS CCC wishes to employ PWGSC to carry out services in relation to CCC's export activities enabling CCC to fulfill CCC's mandate and to identify, evaluate and manage CCC's risks;

WHEREAS PWGSC is willing to provide value added contracting, contract management and related services on the terms and conditions hereinafter set out.

NOW THEREFORE the Parties agree as follow:

1. DEFINITIONS

1.1 Assets Management Services means the provision of property management services relating to United States (U.S) Government property located at various plants of Canadian suppliers.

1.2 Assist Audit Services means, at the request of the U.S. Government, the conduct of a proposal review, the carrying out a facility evaluation or the performance of an audit related to an export transaction with a Canadian supplier.

1.3 Core Business Activity means:

A CCC export transaction in the defence and aerospace market sectors with:
- The U.S. Department of Defense, pursuant to the U.S.-Canada Defence Production Sharing Arrangements and the U.S.-Canada Defence Development Sharing Agreement
- The National Aeronautics and Space Administration
- The U.S. Coast Guard
A CCC export transaction in any sector and with any Customers where PWGSC possesses the required experience and constitutes the type of transaction in which PWGSC is typically engaged.

1.4 Cost Audit Services means the auditing of the Canadian supplier's costs to be performed by that division of PWGSC commonly known as "Consulting and Audit Canada" (hereafter Consulting and Audit Canada).

1.5 Customer means CCC's international buyer.

1.6 Legal Services means the provision of professional services regarding the application of the law, including legal advice and opinions.

1.7 Major Project means a Core Business Activity that is of significant potential value, duration or complexity and for which CCC expressly requests to have a dedicated PWGSC team perform all or a subset of the PWGSC Services.

1.8 MOU means this Memorandum of Understanding.

1.9 NASA means the National Aeronautics and Space Administration.

1.10 PWGSC Services means the services described in Annex A, Part I that are to be performed by PWGSC.

1.11 U.S. Department of Defence means the U.S. Department of Defence, pursuant to the U.S.-Canada Defence Production Sharing Arrangements and the U.S.-Canada Defence Development Sharing Agreement.

2. TERM

2.1 This MOU becomes effective on the date it is signed and will automatically renew on a yearly basis unless either party sends a six (6) month written notice to the other party terminating the MOU.

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3. NATURE OF THE SERVICES

3.1 PWGSC Services for a Core Business Activity

Upon receipt of a written request from CCC, PWGSC shall provide CCC with the specified subset of PWGSC Services that are requested for the Core Business Activity identified.

3.2 PWGSC Services for a Major Project

Upon receipt of a written request from CCC and upon agreement on nature of work and price, PWGSC shall dedicate, at PWGSC's discretion, a PWGSC team who will provide the specified subset of PWGSC Services that are requested for the Major Project identified.

3.3 Assist Audit Services

Upon receipt of a written request to that effect from CCC and upon agreement on a price if applicable, PWGSC shall perform Assist Audit Services.

3.4 Cost Audit Services

3.4.1. For export transactions of a cost reimbursable nature where the Customer is the U.S. Department of Defence, the NASA, the Ministry of Defence of the Federal Republic of Germany or the Ministry of Defence of the United Kingdom, PWGSC shall perform or arrange for the performance of the Cost Audit Services, including discretionary audits at CCC's discretion.

3.4.2. For any other export transactions, upon reception of a written request to that effect from CCC and upon agreement on a price, PWGSC shall perform or arrange for the performance of the Cost Audit Services.

3.5 Assets Management Services

Upon reception of a written request to that effect from CCC together with a list of U.S. Government property located at Canadian suppliers' facilities, PWGSC shall manage the listed U.S. Government property in accordance with the Administration of United States Government Furnished Property Policy contained in Volume 7 of the Supply Policy Manual.

3.6 Legal Services

3.6.1 The services herein described include the provision of Legal Services in a similar manner as provided to PWGSC in relation to the procurement requirements of other Government departments (SPM Section 6E), tailored for the needs of CCC's prime contract and back-to-back contracting arrangements as described in Volume 7 of the Supply Policy Manual.

3.6.1.1 For further clarity, PWGSC and CCC personnel shall have access to PWGSC Legal for Legal Services in relation to the services to be provided by PWGSC under this MOU. Said requests by CCC for Legal Services shall be made by CCC to PWGSC personnel who shall transmit such request to PWGSC Legal.

3.6.2 If PWGSC is of the opinion that a claim by or against CCC may result in litigation or arbitration, upon confirmation of such risk by PWGSC Legal, PWGSC shall notify CCC in writing. PWGSC legal shall continue providing Legal Services. CCC Legal may consult with PWGSC Legal and any differences in points of view or uncertainties will be referred to the Heads of the respective units.

3.6.3 When legal proceedings are actually commenced, either by or against CCC in connection with any contract for which PWGSC has been providing PWGSC Services, PWGSC Legal will turn over the file to CCC Legal who will be the instructing solicitor. PWGSC Legal shall assist CCC in preparing the statement of fact and law and shall render reasonable assistance to CCC and the Civil Litigation Branch of Justice or outside counsel, upon request.

3.6.3.1 For greater clarity, "legal proceedings" does not include conservatory measures or other measures or procedures destined to protect the assets/interests of CCC such as, without limiting the generality of the foregoing, registering liens, chattel mortgage or mortgages, asserting the rights of ownership of CCC and CCC's Customer over work in process or goods, or proof of claim in case of receivership or bankruptcy of the Canadian supplier.

3.6.4 Expenses incurred by PWGSC Legal who travel for the purpose of assisting PWGSC in the provision of PWGSC Services outside of the Ottawa/Gatineau area are deemed included in the firm price negotiated for the PWGSC Services for Core Business Activities. CCC expects that PWGSC Legal will have full opportunity to advise PWGSC personnel outside of the Ottawa/Gatineau area.

3.6.5 The Heads of the two Legal Units shall deal, on a case-by-case basis, with situations that do not fall within the general principles outlined herein.

3.7 Other Services

3.7.1 Upon receipt of a written request from CCC, PWGSC may perform other services for CCC upon agreement on a price.

3.7.2 However, where CCC requests the services of a PWGSC lawyer with respect to such other services being performed by PWGSC pursuant to the preceding subsection, such arrangements, including the managerial and financial aspects, will be by written agreement between the Heads of the two Legal Units.

4. BASIS OF PAYMENT

4.1 PWGSC Services for Core Business Activities

4.1.1 PWGSC shall be paid the firm price negotiated between the parties for a specific fiscal year for all PWGSC Services rendered during the said fiscal year with regards to Core Business Activities, excluding Major Projects.

4.1.2 Three (3) months prior to the commencement of each fiscal year, PWGSC and CCC shall endeavour to negotiate an agreement on (a) the anticipated volume of Core Business Activities for the following fiscal year, (b) the corresponding total level of effort required of PWGSC to carry out the PWGSC Services and (c) the firm price to be paid by CCC regarding PWGSC Services for Core Business Activities of the following fiscal year.

4.2 PWGSC Services for Major Projects

4.2.1 PWGSC shall be paid the firm price negotiated between the parties for the applicable fiscal year for all PWGSC Services rendered during the said fiscal year with regards to Major Projects.

4.2.2 If no agreement has been reached between the parties with regards to a firm price for PWGSC Services for Major Projects for the applicable fiscal year then, upon receipt of a written request from CCC requesting PWGSC Services for a Major Project, PWGSC will submit a quotation to CCC for the PWGSC Services related to such Major Project, based upon the estimated scope, duration and complexity of the Major Project.

4.2.3 PWGSC shall be paid the firm price negotiated in accordance with the quotation accepted by CCC, unless agreed otherwise due to the specificity of a Major Project.

4.2.4 In the event that the scope, duration, or complexity of the Major Project were to be significantly increased or decreased, PWGSC shall notify CCC and shall submit for consideration by CCC a revised quotation. No increase in the price resulting from any modifications in the PWGSC Services to be performed will be authorized or paid to PWGSC unless CCC has approved such modifications in writing prior to their performance.

4.3 Assist Audit Services

4.3.1 Upon receipt of a written request for Assist Audit Services from CCC and copy of a document indicating that the Assist Audit Services are requested by the U.S. Department of Defence or the NASA, the price of such Assist Audit Services will be deemed included in the firm price negotiated for the PWGSC Services for Core Business Activities.

4.3.2 With respect to any other Assist Audit Services requested by CCC, PWGSC will submit, for CCC's consideration and acceptance, a price quotation based upon the specific scope of Assist Audit Services being requested. PWGSC shall be paid the firm price negotiated in accordance with the quotation accepted by CCC.

4.4 Cost Audit Services

4.4.1 Exclusively for export transactions of a cost reimbursable nature, where the Customer is the U.S. Department of Defence, the NASA, the Ministry of Defence of the Federal Republic of Germany or the Ministry of Defence of the United Kingdom, the price of the Cost Audit Services will be deemed included in the firm price negotiated for the PWGSC Services for Core Business Activities.

4.4.2 With respect to any other Cost Audit Services requested by CCC, PWGSC will submit, for CCC's consideration and acceptance, a price quotation based upon the specific scope of Cost Audit Services being requested. PWGSC shall be paid the firm price negotiated in accordance with the quotation accepted by CCC.

4.5 Assets Management Services

4.5.1 The price of Assets Management Services is included in the firm price negotiated for PWGSC Services for Core Business Activities.

4.6 Legal Services

4.6.1 The price for Legal Services is included in the firm price negotiated for PWGSC Services for Core Business Activities.

4.7 Other Services

4.7.1 The price of other services will be negotiated on a case-by-case basis.

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5. METHOD OF PAYMENT

5.1 CCC and PWGSC shall budget and endeavour to maintain adequate funding and resource levels to discharge the commitments contemplated under this MOU.

5.2 All payments by CCC to PWGSC shall be made in semi-annual instalments upon receipt of an invoice from PWGSC, unless agreed otherwise in the case of a specific Assist Audit Services or Cost Audit Services.

6. SERVICE LEVELS

6.1 PWGSC undertakes to use the best possible means in order to act with prudence and diligence in performing the services described in this MOU and in order to achieve the performance time indicated in Article 6.1.3.

6.1.1 More specifically with regards to certifications:

6.1.1.1 PWGSC shall give CCC priority treatment with regards to certifications when, given specific circumstances where there is a need to respond on an urgent and timely basis to tender calls, requests for proposals and other forms of bid solicitation, CCC express in writing to PWGSC such a need for an urgent treatment.

6.1.1.2 PWGSC agrees to employ the appropriate level of expertise required in each case to properly assess the capabilities of the Canadian supplier and to determine whether there are abnormal risks associated with CCC's endorsement of such Canadian supplier's offer, keeping in mind that CCC must rely solely on that Canadian supplier to discharge all of the obligations of any resultant contract.

6.1.1.3 PWGSC recognizes that CCC's endorsement of an offer to a prospective Customer will be based on PWGSC's certification. CCC's endorsement of the Canadian supplier's offer constitutes CCC's offer to the Customer and CCC's commitment that the CCC will satisfy the solicitation requirements in accordance with the Canadian supplier's offer. Submission of the endorsement is binding upon CCC. PWGSC further recognizes that an accepted offer will obligate CCC to perform any resultant contract.

6.1.1.4 PWGSC shall provide certification of a Canadian supplier's offer when PWGSC considers that both:

the offer is within such Canadian supplier's financial, technical and delivery capability. This documented assessment will require an analysis of that Canadian supplier's financial and technical ability to perform any contract which may result from that Canadian supplier's offer, keeping in mind that CCC must rely solely on that Canadian supplier to discharge all of the obligations of any resultant contract; and,
with regards to the contract cost:
1. in the case of a request for proposal (RFP) or a request for quotation (RFQ), the cost breakdown of the Canadian supplier's proposed price(s) is/are fair and reasonable, in accordance with CCC Pricing Policy contained in Volume 7 of the Supply Policy Manual, and
2. in the case of a bid, the Canadian supplier is capable of performing the contract at the price quoted.

6.1.2 With respect to contract administration:

6.1.2.1 In exceptional cases, such as supplier bankruptcy or receivership, Show Cause Notices, Termination Notices, Stop Work Notices or other significant default or anticipatory default situations, PWGSC and CCC shall immediately take jointly the necessary actions, including the assignment of appropriate personnel from each others organizations, to ensure that the interests of CCC are fully protected.

6.1.2.2 CCC or PWGSC may identify contracts, which require special monitoring respecting the timely fulfillment of their contract obligations. PWGSC shall suggest a list of possible monitoring actions to ensure that such Canadian supplier(s) remedy deficiencies and take corrective actions as required. Upon receipt of a written confirmation by CCC, PWGSC shall, as agent for CCC, implement the approved special monitoring actions. PWGSC agrees to provide status reports to CCC on such special monitoring concerning deliveries and the implementation of the remedy to rectify the deficiencies or of the corrective actions required.

6.1.3 And, more specifically with regards to contract award and administration:

6.1.3.1 Canadian supplier contract award notice: Shall be issued by PWGSC, as agent for CCC, to Canadian suppliers within two (2) business days following receipt of such a notice from CCC. CCC shall be sent, by facsimile or other electronic means, an information copy of these notices.

6.1.3.2 Preparation/Execution of contracts with Canadian supplier(s) and amendments thereto: Shall be issued by PWGSC, as agent for CCC, within twenty-one (21) calendar days following receipt of an executed Financial Authority form CCC 747 and relevant documentation from CCC.

6.1.3.3. Approval of claims for progress payments: Shall be verified for accuracy and then sent to CCC within five (5) working days following their receipt by PWGSC.

7. PROCEDURE

7.1 In performing the services identified under Article 3 of the present MOU, PWGSC will follow the procedures contained in Volume 7 of the Supply Policy Manual.

7.2 CCC and PWGSC hereby agree and undertake to jointly review Volume 7 during fiscal year 2005-2006 to reflect changes, which are mutually agreed by both parties. The goal of this joint review is to deploy a renewed CCC Desk Manual encompassing the current agreed to working arrangements between the parties to replace those in Volume 7.

7.3 PWGSC also agrees to incorporate CCC's standard contract clauses and forms in the PWGSC Standard Acquisition Clauses and Conditions (SACC) Manual.

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8. AUTHORITY

8.1 CCC hereby delegates to PWGSC the necessary contractual and financial authorities to carry out the requested PWGSC Services on behalf of and as agent for CCC, and it is understood that the Deputy Minister of Public Works and Government Services Canada shall further delegate authority to his/her officials as he/she considers appropriate to perform said PWGSC Services as agents of CCC in a efficient and effective manner.

9. ACCESS TO INFORMATION

9.1 PWGSC shall make available to CCC all past and present CCC files that are still available to PWGSC and that are related to PWGSC Services, Assist Audit Services, Cost Audit Services and Asset Management Services provided under this MOU.

9.2 PWGSC shall provide the same access to CCC as to other PWGSC's client departments, to any of its information systems. CCC agrees to pay PWGSC any standard charges related to this access.

9.3 Where a request is made to CCC under the Access to Information Act or the Privacy Act that relates, in whole or in part, to a matter in respect of which PWGSC is providing PWGSC Services, Assist Audit Services, Cost Audit Services, Asset Management Services or other services on CCC activities to CCC, PWGSC agrees to comply with the Access to Information Act or the Privacy Act in a timely manner.

9.4 Where a request is made to PWGSC under the Access to Information Act or the Privacy Act that relates, in whole or in part, to a matter in respect of which CCC is receiving PWGSC Services, Assist Audit Services, Cost Audit Services, Asset Management Services or other services on CCC activities, CCC agrees to comply with the Access to Information Act or the Privacy Act in a timely manner.

10. CONFIDENTIALITY OF THIRD PARTY INFORMATION AND CLASSIFIED INFORMATION

10.1 To ensure the integrity of the PWGSC Services delivered under this MOU, to protect the interests of Canadian suppliers and Customers, and to protect Canada from legal action, PWGSC and CCC agree to treat all confidential information, such as financial, commercial, scientific or technical information, supplied to PWGSC by a third party in a secure and confidential manner. Subject to the Access to Information Act, neither party shall not release or disclose outside the Government of Canada any information delivered to either party that is confidential information or information that is proprietary to the Canadian supplier of its subcontractors.

10.2 When in receipt of protected/classified information, the respective parties shall handle such information on a need to know basis and provide security for the information to the level of classification designated in accordance with government procedures for protected/classified information.

11. AUDIT

11.1 PWGSC acknowledges that the Auditor General of Canada or his designated representative has full authority to audit the accounts, books, records, files and all documentation maintained and kept by PWGSC with regard to the PWGSC Services, Assist Audit Services, Cost Audit Services, Asset Management Services or other services on CCC activities.

12. TRAINING

12.1 The parties agree to conduct joint and individual training sessions on the roles and responsibilities of PWGSC and CCC to ensure that CCC and PWGSC personnel are conversant with and knowledgeable on appropriate policies and procedures. The parties will strive to sustain and improve the quality of services through appropriate training.

12.2 External training identified as being beneficial to both parties such as the U.S. Government Contract Law, Pre-Award Contracting and Post-Award Contracting courses which are sponsored, from time to time by CCC in Canada, will be offered to PWGSC personnel without charge as part of the parties' mutual commitment to the training and development of personnel.

12.3 The parties have agreed to make use of alternate methods of maintaining an enriched capacity to work together at delivering quality services by establishing mutual exchanges of staff with agreed learning objectives for growth, development and diversity.

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13. COMMUNICATION LINKS

13.1 The parties agree to distribute this MOU to all operating levels within each other's organization within fifteen (15) calendar days of the execution of this MOU or any amendment thereto, and copy respective parties on communications relating to these actions.

13.2 The parties agree to adopt and maintain between them compatible e-mail connectivity in order to achieve effective communications concerning the U.S. Department of Defence and especially with the Defence Contract Management Command Americas. It is further agreed that PWGSC and CCC will share electronically contract information that has been identified to be mutually beneficial to both parties.

13.3 The parties agree to keep each other appraised of internal changes that may have an impact upon the relationship and services contemplated under this MOU through the offices of those identified in Article 17.1.

14. REVIEWS

14.1 MOU Reviews

14.1.1 The signatories to this MOU, or their representatives agree to meet as required to discuss issues concerning the current or future operational matters governed by this MOU.

14.2 Service Level Reviews

14.2.1 The parties agree to meet quarterly, commencing on April 1^st, 2005, to review PWGSC's performance against the service levels described in Article 6.1.3 as well as against the turn around time of certifications, Assist Audit Services and Cost Audit Services.

14.2.2 Following the analysis of PWGSC's performance, the parties undertake to identify and implement those changes in the policies, practices, procedures and other work flow arrangements between the organizations proven to be cost effective and having a demonstrated net benefit to CCC's Customers and Canadian suppliers.

15. AMENDMENTS

15.1 This MOU may be amended by written agreement between PWGSC and CCC.

16. ENTIRE AGREEMENT

16.1 This MOU constitutes the entire and sole agreement between the parties with respect to the subject matter of the MOU and supersedes all previous negotiations, communications and other understandings, whether written or oral, relating to it. There are no terms, covenants, representations, statements or conditions binding on the parties other than those contained in the present MOU.

17. PRIORITY OF DOCUMENTS

17.1 The documents specified below form part of and are incorporated into the MOU. If there is a discrepancy in the wording between any documents that appear on the list, the wording of the document that first appears shall prevail over the wording of any document that subsequently appears on the list.

This agreement
Annex A – Responsibility Matrix
Annex B – U.S.- Canada Defence Production Sharing Agreements
Annex C – U.S.- Canada Defence Development Sharing Agreement

18. INTERPRETATION

18.1 Issues regarding interpretation of or compliance with the terms and conditions of this MOU by either party, shall be brought to the attention of the Vice President, Operations, CCC or the Director General, Land Aerospace and Marine Systems & Major Projects Sector, PWGSC or the person assuming these functions, for immediate resolution.

CANADIAN COMMERCIAL CORPORATION

J. Hugh O'Donnell
President

DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES

Jane S. Billings
Assistant Deputy Minister
Acquisitions Branch

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Annex A to MOU: Responsibility Matrix

PART I PWGSC Services Responsibilities:

	Primary	Secondary
1. PROJECT IDENTIFICATION PHASE
Identification of: - Export market opportunities - Sourcing possibilities	CCC	PWGSC
Liaison policy requirements with other department/agencies regarding CCC activities	CCC	PWGSC
Evaluation of project potential (feasibility, bid time, supply availability, export permit)	CCC	PWGSC
Availability of support services (training, product support, repair, overhaul)	PWGSC	CCC
Assessment of Customer's risk (political/social/economic factors/financing)	CCC	-----
Agents/representatives, boycott, considerations	CCC	PWGSC
Project funding	CCC	PWGSC
Insurance and sureties	CCC	PWGSC
2. REQUIREMENT DEFINITION PHASE
Clarification of Customer's requirements	CCC	PWGSC
Review and assessment of specifications and technical requirements	PWGSC	CCC
3. BID SOLICITATION PHASE
Solicitation of Canadian suppliers for bids	CCC	PWGSC
Definition of bid instructions (special terms, foreign laws/conditions, use of representatives, inspection, bid opening, etc.)	CCC	PWGSC
Preparation and issue of tenders or bid sets	CCC	PWGSC
Compliance review of bids from Canadian suppliers (i.e., with delivery, shipping, forms, etc.)	CCC	PWGSC
Security clearance (facility & personnel)	PWGSC	----
Facility surveys, including pre-award surveys	PWGSC	CCC
Liaison (proposal of pre-award) with: - Canadian supplier - Customer	PWGSC CCC	CCC PWGSC
Certification of bid	PWGSC	CCC
Project funding Export Development Corporation, banks, multilateral aid, financing agencies	CCC	-----
Arrangement of Bid/performance bonds, or guarantees to Customers	CCC	-----
Examination/endorsement	CCC	-----
Bid submissions to Customers	CCC	------
4. NEGOTIATION/AWARD PHASE
Negotiation of contract - Canadian supplier - Customer	PWGSC CCC	CCC PWGSC
Preparation of the Financial Authority 747 forms	CCC	PWGSC
Canadian supplier contract award notice	PWGSC	CCC
Preparation and arrangement of documents regarding Canadian supplier's guarantees, parental guarantees, security deposits, etc.	PWGSC	CCC
Execution of bid bonds, performance bonds, other forms of surety/guarantee as required	CCC	------
Acceptance/acknowledgement/signing of Customer contract (award) and amendment	PWGSC	CCC
Preparation and signing of contract with Canadian supplier(s) and amendments	PWGSC	CCC
5. CONTRACT MANAGEMENT/ADMINISTRATIVE PHASE
5.1 Monitoring Delivery, Technical & Cost Performance
Contract quality control in accordance with PWGSC procedure	PWGSC	CCC
Monitoring production and delivery - Obtaining progress reports from Canadian suppliers (as per contract deliverables) - Delivery status - Review/approve design change requests/waivers/deviations - Conduct design/technical/progress reviews meetings - Manage contract performance issues	PWGSC	CCC
Monitoring Cost Performance - Cash flow and final cost monitoring - Verification of adequacy of the Canadian supplier/subcontractors accounts - Verification of special financial considerations (i.e., economic price adjustment, foreign exchange, etc.) - Management of contract financial securities	PWGSC	------
Special Monitoring (as define in Article 6.1.2.2)	PWGSC	CCC
5.2 Payment Authorization
Approval of progress claims & invoices - Invoices and progress claim verification - Milestone/progress/final payment authorization - Financial/time audit management (if required)	PWGSC	CCC
Processing invoices, progress claims, etc. for payment to the Canadian supplier and collection from the Customer after approval where required	CCC	------
5.3 Procurement Progress
Submitting special progress reports to the Customer	CCC	PWGSC
Contract liaison with the Customer: - U.S. - International	PWGSC CCC	CCC PWGSC
Technical liaison with the Customer	PWGSC	CCC
Management of contract funding	CCC	PWGSC
Inspection and acceptance arrangements	PWGSC	CCC
Shipping and insurance arrangements	PWGSC	CCC
Major disputes (contractual)	CCC	PWGSC
Decision regarding anticipatory default or for termination of contracts or part thereof for convenience of default	CCC	PWGSC
Termination notice to the Canadian supplier	PWGSC	CCC
Administration of terminations	PWGSC	CCC
5.4 Contract Close-out Action
Close-out of contract files: - Negotiation of final price - Disposition of surplus assets - Resolve audit enquiries - Resolution of warranty claims and contract disputes	PWGSC	CCC
6. OTHER PROCUREMENT SERVICES
Action on contract losses	CCC	PWGSC
Special facility surveys	PWGSC	CCC
Price analysis/verification	PWGSC	CCC
Annual rate negotiations with major Canadian firms	PWGSC	------
7. OTHER
Media relations regarding activities of CCC	CCC	-------

PART II OTHER RESPONSIBILITIES

	Primary	Secondary
Cost audits	PWGSC	CCC
Assist audits	PWGSC	CCC
Management of U.S. Government assets, GSM/GFE/special tooling test equipment/other	PWGSC	CCC

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Annex B to MOU: Canada-U.S. Defence
Production Sharing Agreements

DEFENCE PRODUCTION SHARING AGREEMENT BETWEEN
CANADA AND THE UNITED STATES OF AMERICA

Reproduced for presentational purposes. Not original documents.

AMENDMENT TO CANADIAN LETTER OF AGREEMENT
Dated 27 July 1956

Change Paragraph 2. (a) of the Letter of Agreement as it appears in the Defence Acquisition Regulation (DAR) Section M Part 1406.1 (a) and substitute the following language:

2.(a) The Corporation agrees that it will cause all first-tier subcontracts, under contracts covered by this agreement to be placed in accordance with the practices, policies and procedures of the Government of Canada covering procurement for defence purposes; and agrees that if the aggregate profit realized under such subcontracts by any first-tier subcontractor exceeds that which is allowed by the Government of Canada under the above mentioned practices, policies, and procedures, the amount of such excess will be refunded by the Corporation to the Military Departments. There shall also be refunded profits on any subcontract in excess of amounts which the Minister of Defence Production (Canada) in the exercise of said practices, policies, and procedures considers to be fair and reasonable, recovered by the Minister pursuant to Section 21 of the Defence Production Act (Canada) from any individual subcontractor of any tier. It is recognized that the practices, policies, and procedures of the Government of Canada referred to above permit various rates of profit in accordance with the terms of the said practices, policies, and procedures as from time-to-time amended; however, in no case will the rate of profit be allowed to exceed any limit prescribed by statute of the Government of the United States. For the purpose of this paragraph, the Corporation will cause to be conducted such audits in accordance with the Costing Memorandum (DDP-31) of the Department of Defence Production (Canada) and such verifications of cost as are in accordance with the said practices, policies, and procedures. The Corporation will render to the Military Departments its certificate that the provisions of this paragraph have been observed.

For the Government of the United States of America

(signed)

___________________
Caspar Weinberger
Secretary of Defence

For the Government of Canada

(signed)

___________________
Herb Gray
Ministry of Industry, Trade and Commerce

DEPUTY MINISTER OF DEFENCE PRODUCTION
SOUS-MINISTRE DE LA PRODUCTION DE DÉFENSE
CANADA

Text of Agreement dated 27 July 1956, as amended 17 December 1956, 31 May 1957, 6 January 1961, and 15 October 1962, between the Department of Defence Production (Canada) and the U.S. Departments of the Army, the Navy, the Air Force, and the Defence Supply Agency, sets forth policies and provides procedures with respect to all contracts for supplies and services placed with the Canadian Commercial Corporation on or after 1 October 1956.

Letter of Agreement

1. This agreement applies to all contracts placed, on or after October 1, 1956, by any of the Military Departments with the Corporation. It shall remain in force from year to year until terminated by mutual consent; however, it can be terminated on the 31^st day of December or the 30^th day of June in any year by either party provided that six months' notice of termination has been given in writing. In addition, this agreement provides for certain reciprocal arrangements facilitating procurement by each of the parties in the country of the other.

2. (a) The Corporation agrees that it will cause all first-tier subcontracts under contracts covered by this agreement to be placed in accordance with the practices, policies and procedures of the Government of Canada covering procurement for defence purposes; and agrees that if the aggregate profit realized under such subcontracts by any first-tier subcontractor exceeds that which is allowed by the Government of Canada under the above-mentioned practices, policies, and procedures, the amount of such excess will be refunded by the Corporation to the Military Departments. There shall also be refunded profits on any subcontract in excess of amounts which the Minister of Defence Production (Canada) in the exercise of said practices, policies and procedures considers to be fair and reasonable, recovered by the Minister pursuant to Section 21 of the Defence Production Act (Canada) from any individual subcontractor of any tier. It is recognized that the practices, policies and procedures of the Government of Canada referred to above permit varying rates of profit not exceeding in the case of cost reimbursement type contracts 7 ½ percent of estimated cost plus, in certain cases, a bonus where cost savings have been demonstrated, and not exceeding in the case of negotiated fixed price contracts 10 percent of estimated cost. For the purpose of this paragraph, the Corporation will cause to be conducted such audits (in accordance with the Costing Memorandum DDP-31 of the Department of Defence Production (Canada)) and such verifications of cost as are in accordance with the said practices, policies and procedures. The Corporation will render to the Military Departments its certificate that the provisions of this paragraph have been observed.

(b) Contracts for communication and transportation services, and the supply of power, water, gas and other utilities shall be excepted from the provisions of sub-paragraph (a) above, provided the rates of charges for such services or utilities are fixed by public regulatory bodies; and provided further the Military Departments are accorded any special rates that may be available to the Canadian Government with respect to such Contracts.

(c) The Canadian Government, its Departments and Agencies, including but not limited to the Corporation, and Canadian Arsenals Limited, a Crown Company wholly owned by the Canadian Government, shall not be entitled to any profit on any contract or contracts covered by this agreement. Any profits, which may be realized shall be returned to the Military Departments except as hereinafter provided:

Before refunding profits realized from the following sources:

net profits of the Canadian Government, b Departments and Agencies as defined above, with respect to contracts and subcontracts covered by this agreement;
excess profits referred to in paragraph (a) above; and
renegotiation recoveries from subcontracts of any tier under contracts covered by this agreement, which recoveries the Military Departments would otherwise be entitled to receive in accordance with the provisions of subparagraph (a) above; the Corporation shall be entitled to deduct any losses it may sustain with respect to contracts covered by this agreement.

(d) Interim adjustments and refunds under this paragraph 2 shall be made at such time or times as may be mutually agreed upon but at least once a year as of June 30^th. Such interim adjustments shall apply only to completed contracts. The final adjustment and refund shall be made as soon as practicable after the expiration of this agreement.

(e) The profit and loss provisions of this paragraph 2 shall not apply to contracts awarded to the Corporation as the result of formal competitive bidding (initiated by Invitation for Bids).

3. (a) All contracts placed by the Military Departments with the Corporation, except those placed as the result of formal competitive bidding, shall provide for prices or cost reimbursement, as the case may be, in terms of Canadian currency, and for payment to be made in such currency. Therefore, quotations and invoices shall be submitted by the Corporation to the Military Departments in terms of Canadian currency, and such cost data, vouchers, etc., as the contracts require shall also be submitted in terms of Canadian currency. However, the Corporation may elect in respect of any such contracts to quote, submit the said cost data, vouchers, etc., and receive payment in United States currency, in which event such contracts shall provide for payment in United States currency and shall not be subject to adjustment for losses or gains resulting from fluctuations in exchange rates.

(b) All formal competitive bids shall be submitted by the Corporation in terms of United States currency and contracts placed as a result of such formal competitive bidding shall not be subject to adjustment for losses or gains resulting from fluctuation in exchange rates.

4 & 5. The Military Departments and the Corporation shall avoid, to the extent consistent with the declared policies of the Military Departments and the Canadian Government, the making of any surcharges covering administration costs with respect to contracts placed with the Corporation by any of the Military Departments and contracts placed by the Military Departments in the United States for the Canadian Government. To the extent that contracts placed with the Corporation by the Military Departments provide for the audit of costs and profits, such audit shaII be made without charge to the Military Departments by the Cost Inspection and Audit Division of the Treasury of Canada in accordance with Costing Memorandum Form DDP-31 of the Department of Defence Production (Canada).

6. The Canadian Government shall arrange for inspection personnel of the Department of National Defence (Canada) to -act on behalf of the Military Departments with respect to contracts placed by the Military Departments with the Corporation and with respect to subcontracts placed in Canada by United States contractors which are performing contracts for the Military Departments and for the use of inspection facilities of the Departments of National Defence (Canada) for such purposes, such personnel and facilities to be provided without cost to the Military Departments. The Military Departments shall provide and make no charge for inspection services and inspection facilities in connection with contracts placed in the United States by the Military Departments for the Canadian Government and with respect to subcontracts placed in the United States by Canadian contractors, which are performing contracts for the Department of Defence Production (Canada). The Department of National Defence (.Canada) or any Military Department may provide liaison with the other's inspection personnel in connection with the foregoing. It is understood that either the Department of National Defence (Canada) or any Military Department may in appropriate cases arrange for inspection by its own inspection organization in the other's country.

7. Because of the varying arrangements made by the Canadian- Government and the Military Departments in furnishing Government-owned facilities (including buildings and machine tools) to contractors, it is recognized that the matter of inclusion in contract prices of charges, through amortization or otherwise, for use of such facilities will be determined in the negotiation of individual contracts. However, there shall be avoided, to the extent consistent with the policies of the Canadian Government and Military Departments, any such charges for use of Government-furnished facilities.

8. (a) The Corporation agrees that the prices set out in fixed-price type contracts covered by this agreement will not include any taxes with respect to first-tier subcontracts; nor shall prices include customs duties to the extent refundable in accordance with Canadian law, paid upon the import of any materials, parts, or components incorporated or to be incorporated in the supplies, with respect to first-tier subcontracts.

(b) The Corporation agrees that under cost-reimbursement type contracts the Corporation shall, to the extent practicable with respect to first-tier subcontracts, exclude from its claims all taxes and to the extent refundable in accordance with Canadian law, customs duties, paid upon the import of any materials, parts of components, incorporated or to be incorporated in the supplies and that any amounts included in such claims representing such taxes and duties shall be refunded or credited to the Military Departments.

(c) The Corporation agrees that, to the extent that such taxes and duties can be reasonably and economically identified, it will use best endeavors to cause such taxes and duties to be excluded from all subcontracts below the first-tier and, if found to be included, to be recovered and credited to the Military Departments.

9. The Corporation recognizes that existing law of the United, States prohibits the use of the cost-plus-a percentage-of-cost system of contracting.

10. Each contract covered by this agreement shall be deemed to include the provisions required by:

Section 719 of Public Law 458, 83^rd Congress of the United States (68 Stat. 353) or similar provisions that may be required by subsequent legislation.

The Assistant Secretary of the Army (Logistics)
The Assistant Secretary of the Navy (Material)
The Assistant Secretary of the Air Force (Material)
The Pentagon,
Washington 25, D.C.
U.S.A.

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Annex C to MOU: Canada-U.S. Defence Development Sharing Agreement

Defence Development Sharing Agreement

This Memorandum of Understanding complements the U.S.-Canadian Defence Production Sharing Program by establishing a cooperative agreement in defence research and development between the United States Department of Defence (DoD) and the Canadian Department of Defence Production (CDDP), called the Defence Development Sharing Program.

1. Objectives:

The principal objectives of the Defence Development Sharing Program are:

To assist in maintaining the Defence Production Sharing Program at a high level by making it possible for Canadian firms to perform research and development work undertaking to meet the requirements of U.S. armed forces.
To utilize better the industrial, scientific and technical resources of the United States and Canada in the interest of mutual defence.
To make possible the standardization and interchangeability of a large amount of the equipments necessary for the defence of United States and Canada.

2. Description of the Program:

The Defence Development Sharing Program will consist of research and development projects (such program being here and after referred to as "projects"):
1. which are performed by Canadian prime contractors;
2. which are designed to meet specific DoD research and development requirements;
3. in which the Military Department of DoD which is the United States party to the project agreement acts as the design authority; and
4. which are jointly funded by DoD and CDDP, (where DoD undertakes the research and development of a weapons system composed of several components, work funded by CDDP on one or more of such components will be considered to be jointly funded).
The Defence Development Sharing Program will not include efforts referred to in paragraph 13.

3. Funding

The financial contribution of DoD in each project will not be less than 25 percent of the costs incurred subsequent to the date of the project agreement provided that in the case of work referred to in the parenthetical sentence of paragraph 2.a (iv), the financial arrangements shall be as agreed to by DoD and CDDP in the project agreement.

4. Selection of Projects

A proposal to initiate a project may be made by CDDP to any of the Military Departments of DoD or by any of the Military Departments of DoD to CDDP. Each proposal will contain a complete and detailed description of the scope of the project and work to be performed and of the suggested cost sharing arrangement. Projects will be selected by mutual agreement of CDDP in the Military Department of DoD concerned.

5. Project Agreements:

The specific terms and conditions of each project will be governed by a project agreement between the Military Department of DoD and CDDP. The project agreement will inter alia set forth the scope of the projects, the work to be performed, types of reports to be submitted, the time and funding schedules, and the cost of sharing arrangements.

6. Selection of Prime Contractors:

The selection of prime contractors for work to be performed under a project shall be subject to mutual agreement.

7. Contract Clauses for Projects:

The Canadian Government agencies responsible for placing and administering research and development contracts with Canadian firms, will insert suitable provisions in such contracts obtaining for DoD the same production rights, data, and information that DoD would obtain for itself if DoD were solely funding and placing the contract under its Armed Services Procurement Regulation.

8. Competitive Research and Development:

DoD will not engage in research and development, which duplicate the work being carried out under any project unless DoD considers such research and development to be in the United States national interest. The appropriate DoD agency will notify CDDP before undertaking such duplicative research and development and will, if requested by CDDP, promptly enter into consultations with CDDP.

9. DoD Procurement of Researched Developed items:

Procurement by DoD from Canadian firms of items developed in a project will be made under the Defence Production Sharing Program and in accordance with the DoD Armed Services Procurement Regulation. Pursuant to that Regulation, procurement of item developed by Canadian firms under the Defence Development Sharing Program will not be "set aside" for small business or for labor surplus areas.

10. Security:

Information and materials developed within projects will be considered to be jointly developed, and classification and declassification thereof will be determined jointly.
Classified information and materials exchanged in connection with or developed within projects will be safeguarded in accordance with the United States-Canadian Security Agreement of January 30, 1962, in the United States Canadian Industry Security Agreement effected by an exchange of letters dated February 6 and March 31, 1952, as amended.

11. Disclosure of Classified Information:

Classified information and materials received by either Government under the Defence Development Sharing Program but not developed within a project will not be disclosed or transferred to third countries, or nationals of third countries, without the consent of the originating Government.
Jointly developed classified information materials will not be transferred or disclosed to any third party by either Government or nationals thereof without the consent of the other Government.

12. Sales:

Sales or transfer to any third party of items developed in a project containing classified information or materials will be subject to the provisions of paragraph 11.
Sales or transfers to NATO, Commonwealth, and SEATO countries, or nationals thereof, of jointly developed unclassified items may be made in accordance with any applicable arrangements between Canada and the United States regarding munitions control. Sales or transfers to any other third party of jointly developed unclassified items will not be made without the consent of both parties to this agreement.
Sales or transfers to any third party of jointly developed unclassified rights information, or data necessary for the production of an item developed in a project will not be made without the consent of both parties to this agreement.

13. Other Research and Development Efforts not in the Defence Development Sharing Program:

Consistent with normal DoD source selection procedures, Canadian firms may bid for DoD research and development contracts which are to be funded solely by the United States. DoD will evaluate proposals from qualified Canadian firms on a parity with proposals received from United States firms. CDDP undertakes to ensure that Canadian firms comply with DoD procurement procedures.
CDDP may award and solely fund research and development contracts to Canadian firms for the purpose of satisfying existing or anticipated DoD requirements. DoD and its Military Departments will not act as Design Authority for such contracts. In the event that the results of any such contract become of sufficient interest to DoD to warrant joint funding, the contract work may, upon mutual agreement, be made the subject of the Defence Development Sharing Program project.

14. Canadian Access to United States Information:

Subject to United States legislation and national policy, the Government of Canada will have access to information on the future requirements of DoD research and development programs and Canadian firms will have the same access to DoD research and development program information as United States firms.

15. Supersession of Prior Arrangements:

This Memorandum of Understanding supercedes the memoranda between CDDP and the United States Departments of the Army, and Air Force, respectively, dated July 26, 1960 and December 22, 1961, except with respect to projects already entered into thereunder.

16. Effect and Duration:

This Memorandum of Understanding will remain in force indefinitely, subject to modification or termination at any time by mutual agreement or to termination six months after receipt by either party of written notice of the intention of the other party to terminate it.

Robert S. McNamara
Secretary of Defence
Date: 16 November 1963

Charles M. Drury
Minister of Defence Production
Date: 21 November 1963

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Chapter 9 - Special Procurements

Table of Contents

9.1 Introduction

9.5 Major Crown Projects

9.5.1 General

9.5.5 Responsibilities of PWGSC in Major Crown Projects

9.5.10 Early Involvement

9.5.15 Memorandum of Understanding with Client Department

9.5.20 Procurement Review

9.5.20.1 Procurement Strategy Development

9.5.20.5 Senior Project Advisory Committee

9.5.20.10 Membership of the Senior Project Advisory Committee

9.10 Real Property Contracting

9.10.1 Real Property Contracting Procedures

9.10.5 SELECT

9.10.10 Architectural and Engineering Services

9.10.15 Construction Services

9.10.20 Elevator Maintenance Services

9.15 United States Foreign Military Sales

9.15.1 Planning

9.15.5 Contracting Protocol

9.15.10 Time Frames

9.15.15 Pricing and Payment

9.15.20 Surcharges

9.15.25 Non-recurring Costs

9.15.30 Release of Information

9.15.35 Processing of Documents

9.15.40 Contract Administration

9.15.45 Contract Amendments

9.15.50 Contract Closing

9.20 Co-Operative Logistics and Blanket Order Cases with the U.S. DoD

9.20.1 Requisition Receipt

9.20.5 Planning

9.20.10 Establishment and Renewal of a Stock Level Case (FMSO I)

9.20.15 Establishment of a Requisitioning Case (FMSO II)

9.20.20 Referral Program

9.20.25 COLOG Termination

9.25 Use of the Defence Production Revolving Fund and Loan Account

9.25.1 Program Description

9.30 Purchases from CORCAN

9.30.1 Requisition Receipt

9.30.5 Memorandum of Understanding

9.30.10 Implementation

9.35 Comprehensive Land Claims Agreements

9.35.1 General Information

9.35.5 Comprehensive Land Claims Agreements in Effect

9.35.5.1 Quebec

9.35.5.5 Yukon, Northwest Territories, and Nunavut

9.35.5.10 British Columbia

9.35.5.15 Newfoundland and Labrador

9.35.10 National Park Agreements and DND Co-operation Agreements

9.35.15 Comprehensive Land Claims Agreements under Negotiation

9.35.20 Applicability of Comprehensive Land Claims Agreement Contracting Obligations

9.35.25 Requirements Definition

9.35.30 Access to Aboriginally-owned Lands

9.35.35 Notification of Procurement

9.35.40 Right of First Refusal

9.35.45 Evaluation Criteria

9.35.50 Methods of Solicitation

9.35.55 Solicitation Period

9.35.60 Business Directories/Lists

9.35.65 Application of CLCAs and the Procurement Strategy for Aboriginal Business

9.35.70 International Trade Agreements

9.35.75 Agreement on Internal Trade

9.35.80 Notice of Proposed Procurement

9.35.85 Solicitations

9.35.90 Standing Offers and Supply Arrangements

9.35.95 Procurement Reporting

9.40 Procurement Strategy for Aboriginal Business

9.40.1 Decision to Set Aside a Procurement under PSAB

9.40.5 Application of PSAB and CLCAs

9.40.10 PSAB and Trade Agreements

Appendix A
(2002-05-24)

Memorandum of Understanding Between
Public Works and Government Services Canada and CORCAN
(SOA of the Correctional Service of Canada)