Procurement Guidelines

Table of Contents

• 1. General Information
  • 1.1 Threshold
  • 1.2 MERX
• 2. Requirement Definition
  • 2.1 Statement of Work (SOW)
  • 2.2 Project Duration
  • 2.3 Intellectual Property Rights
  • 2.4 General Conditions Professional Services Medium Complexity
  • 2.5 Security
• 3. Sourcing
  • 3.1 PS Online Searches
  • 3.2 Search Results
• 4. Competitive versus Non-competitive Requirements
  • 4.1 Requirements not subject to Trade Agreements
  • 4.2 Requirements valued at less than $25,000
  • 4.3 Requirements valued at $25,000 or higher
• 5. Solicitation Preparation
  • 5.1 Technical or Project Authority
  • 5.2 Contracting Authority
  • 5.3 Bidding Period
  • 5.4 Deliverables
  • 5.5 Evaluation Criteria
  • 5.6 Evaluation Methodology
  • 5.7 Evaluation Team
  • 5.8 Method of Payment
• 6. Evaluation of Proposals
  • 6.1 Resource(s) Offered
  • 6.2 Alternate Resources
  • 6.3 Additional Resources
  • 6.4 Evaluation of Mandatory Criteria
  • 6.5 Evaluation of Point Rated Criteria
  • 6.6 Evaluation Report
  • 6.7 Review of Evaluation Conducted
• 7. Selection of Winning Proposal
  • 7.1 Ranking of Proposals
  • 7.2 Per Diem Rates Verification
• 8. Negotiations
  • 8.1 Proposals
  • 8.2 Additional Costs
• 9. Re-Tendering
  • 9.1 No Bids Received
  • 9.2 No Responsive Bids Received
  • 9.3 Re-tendering a Solicitation
  • 9.4 Canceling a solicitation
• 10. Contract Preparation
  • 10.1 Contract Value
  • 10.2 Contract Period
  • 10.3 Resource(s) Performing the Work
  • 10.4 Tasks and Activities
  • 10.5 Basis of Payment
  • 10.6 Method of Payment
  • 10.7 Security
• 11. Regret Notices
• 12. Debriefings
• 13. Contract Amendments
  • 13.1 General
  • 13.2 Date
  • 13.3 Changes to Contract Value
  • 13.4 Replacement or Additional Resource(s)
  • 13.5 Changes to the SOW
  • 13.6 Changes to the Duration of the Contract
  • 13.7 Changes to the Commencement Date of the Contract
  • 13.8 Supplier Name Change
  • 13.9 Assignment of Contract
  • 13.10 Amalgamating, Merging of Companies
  • 13.11 Changing the Method of Payment
• 14. Other
  • 14.1 Contract Splitting
  • 14.2 Follow-up Contracts
  • 14.3 Contracts for the same Work
• Recommended procurement training available to Public Servants

---

These guidelines establish the operational standard for procurement requirements completed using PS Online. The standard contains both requirements, as indicated by use of the word "must", and recommended safeguards, as indicated by use of the word "should."

1. General Information

1.1 Threshold

The Professional Services (PS) Online threshold is $78,500 (effective 2012-01-01) which includes Goods and Services Tax (GST), Harmonized Sales Tax (HST), Travel and Living Expenses (if applicable). This threshold applies to the value of the entire requirement related to the project and includes the total value of all contracts awarded (in relation to the project) and the aggregate value of all subsequent amendments.

Note: Whenever reference is made to the value of a contract, amendment or requirement, the value includes Goods and Services Tax (GST), Harmonized Sales Tax (HST) and Travel and Living Expenses (if applicable).

1.2 MERX

MERX is not applicable to PS Online. Therefore, the posting of a Notice of Proposed Procurement (NPP) or Advance Contract Award Notice (ACAN) on MERX is not required.

2. Requirement Definition

2.1 Statement of Work (SOW)

In accordance with Treasury Board Contracting Policy (section 16), the Statement of Work (SOW) or requirements description must clearly describe the work to be carried out, the objectives to be attained and the time frame. The SOW must identify the specific stages of the work, their sequence, and their relationship to the overall work in general and to each other in particular. The type, magnitude and complexity of the work will determine the degree of detail required.

A SOW or requirements definition is required for all procurements regardless of value. The SOW or requirements definition must be developed prior to conducting the PS Online search as it is used to determine the search criteria used (including skill and linguistic requirements, security considerations, etc.) to conduct the PS Online search. The SOW or requirements definition must clearly identify, as a minimum:

1. the work required;
2. specific tasks, where necessary;
3. deliverables;
4. milestone date associated with each deliverable, where necessary; and
5. the expected contract completion date.

A copy of the SOW or requirements definition must be placed on the contract file.

Note: Using the services of a supplier/resource to assist in developing a SOW or RFP and subsequently awarding a contract to that supplier/resource represents a conflict of interest and is a violation of the Code of Conduct for Procurement that contracting be fair, open and transparent.

For additional information on the Code of Conduct for Procurement visit the PWGSC website.

2.2 Project Duration

The "project period" or the "work schedule" for the requirement must be identified. Any deadlines by which deliverable items must be submitted or any phase of the work that must be completed by a given date must be stated.

Notwithstanding the specific approval requirements of the Department or Agency, approval of the project duration only (not the procurement) at the Director level or above is required for projects whose duration exceeds 100 working days. The requirement for approval at the Director level or above does not affect the signing authority level appropriate for the value of the contract in question.

Note: A project whose duration has an expected level of effort in excess of 100 working days for a single resource could create an employer/employee relationship. Therefore, senior management must be made aware of such projects.

For additional information on employer/employee relationships visit the Treasury Board website.

2.3 Intellectual Property Rights

The Contracting Authority shall ensure that, if applicable, the Treasury Board Policy on ownership of Intellectual Property is met. The following is an excerpt from the Treasury Board Policy on Intellectual Property:

"The primary objective of Crown Procurement Contracts is to receive the deliverables contracted for, and to be able to use those deliverables, and any Intellectual Property arising by the virtue of such Crown Procurement Contracts for Government of Canada activities."

Government Contracting Policy further states that officials are to achieve best value for money and to seek the optimal balance of benefits to the Crown and the Canadian people through its purchases. As part of this commitment, the Government of Canada has made specific provisions for social and economic development objectives to be pursued through procurement.

One of the socio-economic objectives pursued through Crown Procurement Contracts is the commercialization of Intellectual Property by the private sector to create jobs and generate economic growth. The revised policy on Title to Intellectual Property Arising Under Crown Procurement Contracts sets out a framework for the Intellectual Property arising by virtue of such Crown Procurement Contracts to be vested in the Contractor, while ensuring the Crown's ability to use the deliverables contracted for and the Intellectual Property for all Government of Canada activities, including future contracts and procurements, and to protect the broader public interest.

For additional information on the Intellectual Property visit the Treasury Board website.

2.4 General Conditions Professional Services Medium Complexity

The following clauses must be included in all solicitation and contract documents that result from using the PS Online tool:

The General Conditions Professional Services Medium Complexity, Supplemental General Conditions applicable to this requirement and Clauses of General application set-out in the Trading Partner Agreement shall form part of this [Request for Proposal/Contract] (select appropriate document).

Note: The use of the above clause is required regardless of whether the PS Online document template is used or departmental or agency specific document templates are used.

2.5 Security

As per the Treasury Board Personnel Security Standard, when a contract is awarded for a period of more than 6 months, individuals who will have regular access to government premises must, as a minimum, hold a Reliability screening. Additionally, for requirements where the resource will have access to sensitive information and/or assets, the resource must have the appropriate personnel screening/security clearance.

Should a specific level of security be required, the following information, in writing, must be obtained from the Contracting Authority's Departmental Unit Security Officer (USO), with the documentation placed on the contract file:

• company that sponsored the security clearance;
• security clearance level; and
• expiry date for the security clearance (this is preferred) or date that it the security clearance was issued.

The Contracting Authority will be required to provide their Departmental USO with the following information:

• name (first and last name) of the resource;
• date of birth; and
• security clearance number (if available).

Should the Contracting Authority not know who their Departmental USO is, this information can be obtained by contacting the Canadian Industrial Security Directorate (CISD) Hotline at 613-948-4176 or by email at ncr.cissd@pwgsc-tpsgc.gc.ca.

Note: CISD will only accept requests for security clearance information that originate from a Departmental USO.

For additional information on the operational standard and certain technical-level procedures for personnel security visit the Treasury Board website.

3. Sourcing

3.1 PS Online Searches

PS Online search criteria used (experience required, security requirement, language requirements, skills selected, etc.) must be pertinent to the type, magnitude and complexity of work to be performed (as described in the SOW) to the extent possible, based on the categories and skills available in the PS Online system.

PS Online searches criteria must not be selected so as to unduly limit competition. More specifically, including search criteria irrelevant to the requirement in order to return a single candidate is not allowed.

Note:

1. Conducting a competitive search using PS Online does not necessarily constitute a competitive procurement. For a procurement to be deemed competitive, a minimum of two or more suppliers must be returned in the search results and invited to bid. If more than two suppliers are returned, a minimum of the three suppliers offering resources with the lowest per diem rates must be invited to bid. For example, if your search results in eight different suppliers, each offering a resource at the same per diem rate, you cannot randomly choose which suppliers to invite, you must invite the first three suppliers sequentially, or in order of their appearance within the search results. If you wish to invite the fifth supplier, all four preceding suppliers must also be invited.

   The only exception to this rule is if one of the suppliers is offering several resources at the same per diem rate. If this is the case, you are obligated to invite only the first resource identified for that specific supplier and can then move to the next supplier in the search results.

2. Conducting a competitive search using PS Online that results in the return of only a single resource that meets the search criteria can be used as a basis for substantiating a non-competitive procurement (along with documented justification placed in the contract file). Specifically, a search returning only a single candidate meets the requirements of Government Contracts Regulations 6(d) (i.e. only one person or firm is capable of performing the work).
3. When performing a competitive search the Contracting Authority must use the highest number of years of experience deemed necessary for the requirement in their search criteria. For example, in order to perform the work described in a SOW, if the resource requires 3 years of experience in Project Management, 5 years of experience in Business Transformation and 10 years of experience in Risk Management, the search must be based on the resource having 10 years of experience.

Please be reminded that it is a violation of PS Online Operations Protocol for a Federal Government Departmental PS Online User to provide access to this database to non-government individuals working at Government sites.

3.2 Search Results

When determining a list of resources and suppliers to invite, the Contracting Authority must not bypass one or more suppliers who can offer a resource at the same or a lower per diem rate in order to invite a supplier at a higher per diem rate, as this is considered to be a restriction of competition.

For example, if a PS Online search results in ten (10) resources from ten (10) companies, and the Contracting Authority wishes to invite the eighth ranked resource, then the first through seventh ranked resources must also be invited.

In exceptional circumstances, the Contracting Authority may elect to not invite one or more lower cost suppliers that resulted from a PS Online search and invite one or more suppliers that have a higher per diem rate. As this is considered to be a restriction in competition and contravenes Treasury Board policy, a detailed justification must be documented and placed on the contract file.

The justification for bypassing a specific resource must be based on specific, documented cases of past performance that, should a contract be awarded to that specific resource there would exist significant risk of non-performance. Examples include:

1. termination of one or more contracts for default;
2. history of failing to meet deadlines in previous contracts;
3. history of producing unacceptable or marginally acceptable work.

In all cases, objective evidence to support any or all of the above examples must be documented and placed on the contract file.

For both competitive and non-competitive requirements, PS online search results utilized to complete a procurement process must be printed and placed on the contract file.

Note:

1. All resources performing work covered by any contract/amendment issued pursuant to PS Online must be confirmed as being registered with PS Online within the supplier's PS Online portfolio of resources prior to contract/amendment award, with a copy of the confirming search results printed and placed on the contract file.
2. Suppliers can change the per diem rates shown in the system at any time. Therefore, if your search was completed several days prior to the issuance of the solicitation document it is recommended that, on the date that the solicitation document is issued, you redo your search. If you redo the search, a copy of the search results must be printed and placed on the contract file.

For additional information relating to resource-specific PS Online search requirements please see section 7.2 Per Diem Rates Verification herein.

4. Competitive versus Non-competitive Requirements

4.1 Requirements not subject to Trade Agreements

For requirements that are not subject to any of the trade agreements (AIT, NAFTA, WTO, etc.), competitive bids must be sought unless one of the four exceptions as set out in the Government Contracts Regulations, outlined below apply.

1. The need is one of pressing emergency in which delay would be injurious to the public interest;
2. The estimated expenditure is less than $25,000;
3. The nature of the work is such that it would not be in the public interest to solicit bids; or
4. Only one person or firm is capable of performing the work.

In accordance with Contracting Policy Notice 2007-4 , dated 2007-09-20, the use of any of the four Government Contracts Regulations exceptions to competitive bidding (including the second one above) must be fully justified by the Contracting Authority, with the appropriate documentation placed on the contract file.

4.2 Requirements valued at less than $25,000

If the estimated value of the requirement is less than $25,000 and competitive bids are not being solicited, justification must not be based solely on the fact that the requirement is less than $25,000 (unless the PS Online search conducted resulted in the return of only one supplier). It must also include the rationale for selecting a specific supplier and resource. This is especially important when it is clear that a PS Online search could have been conducted utilizing the skills identified in the SOW that would return multiple potential resources and suppliers.

Notes:

1. For requirements where bids are not being solicited, the Contracting Authority must still require that the proposed supplier submit a written proposal. At a minimum, the proposal must state the name(s) of the resource or resources being offered, the per diem rate or rates applicable, dates for completion of the various tasks and any other information that is pertinent to the work required. The proposal from the proposed supplier must be placed on the contract file.
2. The rationale for selecting a specific supplier or resource must not be based solely on the fact that the supplier or resource has had previous contracts with your department or because a supplier or resource has had work experience in your department.

4.3 Requirements valued at $25,000 or higher

If the estimated value of the requirement is $25,000 or higher and competitive bids are not being solicited, the justification for not soliciting competitive bids must be adequately documented and placed on the contract file together with rationale for selecting a specific supplier and resource.

Please see the Government Contracting Regulations

Notes:

1. For requirements where bids are not being solicited, the Contracting Authority must still require that the proposed supplier submit a written proposal. At a minimum, the proposal must state the name(s) of the resource or resources being offered, the per diem rate or rates applicable, dates for completion of the various tasks and any other information that is pertinent to the work required. The proposal from the proposed supplier must be placed on the contract file.
2. The rationale for selecting a specific supplier or resource must not be based solely on the fact that the supplier or resource has had previous contracts with your department or because a supplier or resource has had work experience in your department.

5. Solicitation Preparation

5.1 Technical or Project Authority

The Technical or Project Authority is the person responsible for all matters concerning the technical content of the work required under the contract. Any changes to the scope of work are to be discussed with the Technical or Project Authority, but any resulting change can only be confirmed by the issuance of a written addendum to the solicitation document and provided to all bidders, or a contract amendment issued by the Contracting Authority, as the case may be.

5.2 Contracting Authority

The Contracting Authority is the person responsible for all matters related to the procurement and all contractual matters arising from any contracts issued.

5.3 Bidding Period

Solicitation documents sent to bidders electronically (by facsimile or by email) must have a minimum bidding period of five (5) working days. Solicitation documents sent to bidders by mail must have a minimum bidding period of ten (10) working days.

Note: Documentation must be on contract file that confirms who was sent the solicitation document, by which method and when it was sent.

5.4 Deliverables

All deliverable items must be listed, including the required format and delivery dates. Required meetings, status reports, data or documents to be provided and the time frames that apply to them should be identified, if applicable.

The identification of format and deadlines will facilitate inspection at a later date as to whether the supplier met the requirements within the predetermined time estimate(s).

5.5 Evaluation Criteria

The evaluation criteria and related scoring guide used to evaluate proposals must be clearly stated in the solicitation document. It must enable the evaluation team to measure the competence of the resources offered and the value of the bidder's proposal in a fair, unbiased manner.

All criteria must be relevant to the requirement (SOW and skills used in the PS Online search), and clearly described so as to avoid significantly different interpretation by each member of the evaluation team. All criteria used must ensure fair competition.

a) Mandatory Evaluation Criteria

Mandatory evaluation criteria identify the minimum requirements essential to the successful completion of the work. Each mandatory criterion should permit evaluator(s) to determine compliance on a simple pass/fail basis. Bidders will be required to meet each criterion in order for the proposal to be evaluated further. If mandatory criteria are used in the evaluation of the proposal, the Contracting Authority:

1. must ensure that the criteria specified are pertinent to the work described in the SOW and the skills used in the PS Online search;
2. must ensure that each criterion is, to the extent possible, objective and clearly described.

Should a bidder fail to meet one or more of these mandatory criteria, the Bidder must be declared non-responsive (regardless of whether or not they are the sole bidder) and the proposal submitted cannot be considered further.

Note: The reason(s) for the non-compliance must be documented and placed on the contract file.

b) Point Rated Evaluation Criteria

Point rated evaluation criteria assess various elements of the technical portion of the proposal in qualitative and/or quantitative terms so that the relative merits of each bid can be determined. If point rated criteria are used in the evaluation of technical portion of the proposal, the Contracting Authority:

1. must ensure that the criteria specified are pertinent to the work described in the SOW and the skills used in the PS Online search;
2. must ensure that each criterion is, to the extent possible, objective, clearly described and measurable by the evaluation team. When terms such as "significant" or "experience in", etc. are used, the criterion must clearly define what is meant by the term or how it will be arithmetically measured;
3. must ensure that the maximum score for each criterion is reasonable when compared to the other criteria and to the total maximum score;
4. must not contradict any mandatory criteria;
5. should exercise caution when stating a minimum score required for a specific criterion as a high minimum score can be viewed as being restrictive. Rationale for each minimum score per criterion should be documented and placed on the contract file;
6. must state a minimum total score required. However, caution needs to be exercised when setting the minimum total score required as a high minimum score can be viewed as being restrictive. Rationale for the minimum total score must be documented and placed on the contract file.

For more information on basic guidelines for the bid evaluation process and contractor selection methods please visit the PWGSC website.

5.6 Evaluation Methodology:

According to Treasury Board Contracting Policy - "The objective of government procurement contracting is to acquire goods and services and to carry out construction in a manner that enhances access, competition and fairness and results in best value or, if appropriate, the optimal balance of overall benefits to the Crown and the Canadian people."

The evaluation methodology specified in the solicitation document is used to determine which proposal represents best value to the Crown. The following are two examples of evaluation methodologies that meet TB policy:

a) Lowest Price Method

From the list of proposals that meet the mandatory requirements, the bidder offering the lowest price is awarded the contract.

b) Lowest Price per Point Method

From the list of proposals that meet the mandatory requirements, each evaluation team member assigns points for each of the point rated criterion specified in the proposal document. Typically, proposals must meet a minimum score in order to be considered further. Proposals that fail to achieve the minimum score required are not considered further. The price quoted in proposals that meet the minimum required score are then divided by the number of points assigned to determine the price per point. The bidder that offered the lowest price per point is awarded the contract.

The Contracting Authority must include in the solicitation document an example that demonstrates how the price per point is calculated, how the bids will be ranked and how the winning bid will be selected. If minimum points are required per criterion, or a minimum total score is required, or both, the Contracting Authority should consider providing an example or examples of how these requirements would be applied.

Note: If an evaluation methodology other than those described above is specified, the rationale for how the Treasury Board policy is being met must be fully documented and placed on the contract file.

For more information on basic guidelines for the bid evaluation process and contractor selection methods please visit the PWGSC website.

5.7 Evaluation Team

A team of at least three (3) individuals, preferably with qualifications and experience compatible with the nature of the requirement, should evaluate proposals. They are responsible for the application of the evaluation criteria specified in the solicitation document. In order to maintain impartiality, whenever possible, the Contracting Authority should not be part of the evaluation team.

5.8 Method of Payment

The solicitation document must stipulate the method of payment to be used. The preferred method is payment upon receipt of the deliverables specified in the solicitation document. Other methods of payment, namely progress payments or advance payments, can be considered. Contracting Authorities should consider specifying progress payments or advance payments only if all the conditions specified in Treasury Board Contracting Policy section 12.2.4 apply.

6. Evaluation of Proposals

6.1 Resource(s) Offered

All proposals received, regardless of whether or not the procurement is competitive or non-competitive, must clearly state the name and per diem rate of each resource offered.

Note: All resources offered must be confirmed as being registered with PS Online with the company that is proposing their services, prior to contract award.

6.2 Alternate Resources

An alternate resource is defined as a resource offered in a proposal from a supplier who is not the same resource identified in the original PS Online search. If a supplier offers an alternate resource, the alternate resource may be considered provided that:

• The resource is registered with PS Online within the supplier's PS Online portfolio of resources;
• The per diem rate offered for the alternate resource must be:
  • equal to or lower than the per diem rate shown for the alternate resource in the PS online system; and
  • equal to or lower than the per diem rate for original resource specified in the solicitation document.

Notes:

1. All resources offered must be evaluated in accordance with the requirements of the solicitation document.
2. For non-competitive requirements, an alternate resource may not be considered if:
   • a competitive type PS Online search was conducted using search criteria consistent with the SOW that resulted in only one resource being returned; or
   • the procurement strategy was based on the Contracting Authority citing the fourth exception for setting aside the requirement for competition (i.e. only one person or firm is capable of performing the contract) outlined in Part 1, Section 6(d) of the Government Contracts Regulations.
3. The requirement that the resource named in the solicitation document sent to a company be considered first before an alternate resource can be considered is no longer required. For example, previously, if the solicitation document states that the resource required is John Smith from ABC Company, and ABC Company offers Jane Jones, then Jane Jones could not be considered unless:
   • all other bids submitted, which offered the resource named in the solicitation document, were deemed to be no responsive; or
   • no other bids were submitted; or
   • all other bids submitted also offered alternate resources (as defined above).

   All proposals may now be considered regardless of whether or not the resource named in the original solicitation document or an alternate resource (as described above) is offered. The Contracting Authority is reminded that the rules governing the offering of alternate resources (as stated above) apply.

6.3 Additional Resources

The tasks described in the SOW may be such that more than one resource would be required to perform the work. Similarly, potential suppliers may determine that the most effective way to complete the work described in the solicitation document would be to offer more than one resource.

Contracting Authorities may consider proposals that offer multiple resources provided that:

• at least one of the resources offered was part of the original PS Online search conducted;
• each additional resource is registered with PS Online within the supplier's PS Online portfolio of resources;
• the per diem rate offered for each additional resource must be:
  • equal to or lower than the per diem rate shown for that additional resource in the PS online system; and
  • equal to or lower than the per diem rate for original resource specified in the solicitation document.

6.4 Evaluation of Mandatory Criteria

The first step in the evaluation is to determine which proposals meet the mandatory criteria stated in the solicitation document. If a proposal offers resources in addition to the resource specifically named in the solicitation document, all resources offered must be evaluated to determine compliance with the mandatory criteria. Proposals that do not meet all the mandatory criteria must be deemed non-responsive and are not to be evaluated further, with the reasons documented and placed on the contract file.

Note: In the event that only one proposal is received as a result of a competitive bid solicitation, the proposal must still be evaluated to determine compliance with all the mandatory requirements. Should not all the mandatory requirements be met, the proposal must be deemed non-responsive and the requirement will need to be re-tendered.

6.5 Evaluation of Point Rated Criteria

All proposals meeting the mandatory requirements must be evaluated and assigned points according to the point rated criteria specified in the solicitation document. If a proposal offers resources in addition to the resource specifically named in the solicitation document, all resources offered must be evaluated in accordance with the point rated requirements.

Note: In the event that only one proposal is received as a result of a competitive bid solicitation, the proposal must still be evaluated and assigned points if there is a minimum score required, in order for a proposal to be considered responsive. If the proposal fails to meet the minimum score required, the proposal must be deemed non-responsive and the requirement will need to be re-tendered.

6.6 Evaluation Report

Upon completion of the evaluation, a signed and dated report for each proposal submitted (and for each resource where applicable) must be provided to the Contracting Authority indicating the results of the evaluation of the mandatory criteria, specific points assigned to each criterion, the rationale for the points assigned to each criterion and any other pertinent comments. All reports, including any summary report prepared by the Contracting Authority must be placed on the contract file.

Note: It is recommended that if an individual evaluation report is modified as a result of an error being discovered either by the evaluator or the Contracting Authority, the evaluation report be corrected and initialed by the evaluator.

6.7 Review of Evaluation Conducted

The Contracting Authority must review each evaluation report and resolve any issues (such as mathematical errors, major discrepancies between points assigned for specific criterion between evaluation team members, etc.).

7. Selection of Winning Proposal

7.1 Ranking of Proposals

Once the technical evaluation is completed, all technically compliant bids are ranked from lowest to highest, based on the selection criteria specified in the request for proposal document.

7.2 Per Diem Rates Verification

The per diem rate for ALL resources offered by the proposed supplier must be verified as being the equal to or lower than the per diem rate shown in the PS Online system for that resource, as reflected in the PS Online search on the contract file.

The per diem rate for the resource offered that was part of the original PS Online search must be equal to or less than that shown in the original PS Online search. If the per diem rate offered is higher than that found in the original PS Online search, then the Contracting Authority must determine when the per diem rate changed. If the per diem rate increased between the time of the original PS Online search but prior to the issuance of the solicitation document, then the higher rate is in effect. If the per diem rate increased after the solicitation document was issued, the bidder must revise their offer to reflect the lower per diem rate. In a competitive bidding situation, such negotiations can only be held with the lowest responsive bidder. Negotiations of per diem rates that would affect the bid ranking are not to take place.

8. Negotiations

8.1 Proposals

After completion of the technical evaluation and selection of the winning proposal, negotiations are permitted. When only one responsive proposal is received in response to a Request for Proposal, the Contracting Authority may, if it considers that it is obtaining fair value, award the contract to the single responsive bidder without conducting negotiations. Should the Contracting Authority consider that the single responsive proposal does not provide fair value, it should either negotiate with the potential supplier to obtain fair value or re-solicit bids for the requirement. If negotiations fail to result in fair value being obtained, then the requirement must be re-solicited.

8.2 Additional Costs

Proposals may include, as part of the pricing offered, provisions for additional costs. Additional costs may include items such as travel and living expenses, translation costs, etc. The Contracting Authority must determine whether or not each individual cost provision is pertinent to the work required. Provisions for costs that are not pertinent to the work required or that should already be built into the per diem rate charged must be excluded from the contract. Examples of additional cost provisions may include:

a) Travel and Living Expenses

If the work requires that the resource attend meetings or conferences in another city, conduct interviews or perform research in another city, etc. then inclusion of an estimated value for travel and living expenses is appropriate, in accordance with Treasury Board Guidelines on Travel and Living Expenses.

Including a provision for expenses related to the supplier traveling back and forth to where the work is being conducted, where the supplier and the work site are both local, is NOT appropriate. Such expenses are part of overhead costs that are built into the per diem rate. Negotiations must be held to remove such a provision.

For additional information on travel and living expenses visit the Treasury Board website.

b) Administrative Expenses

Including a provision for administrative expenses (including but not limited to long distance phone charges, costs to send documents by facsimile, courier costs, photocopying, etc.) is NOT appropriate. Such expenses are part of overhead costs that are built into the per diem rate.

c) Translation Costs

Where the work clearly requires that documents developed be translated into another language (typically English to French), including a provision for this type of expense is appropriate.

9. Re-Tendering

9.1 No Bids Received

In the event that no bids are received as a result of a competitive solicitation, the Contracting Authority must contact each firm invited to bid to establish why a bid was not submitted. Based on the feedback received, the Contracting Authority must consider revising any or all of the following:

1. Specific elements of the SOW such as the contract period, dates for deliverables, etc;
2. The evaluation criteria (both mandatory and point rated requirements);
3. The selection criteria;
4. Any other aspect of the solicitation document.

9.2 No Responsive Bids Received

In the event that the evaluation of all bids received as a result of a competitive solicitation results in all bids received being declared non-responsive, the Contracting Authority must establish why each bid submitted was declared non-responsive. In addition, the Contracting Authority must contact each firm invited to bid and who did not submit a proposal, to establish why a bid was not submitted.

Based on the above results, the Contracting Authority must consider revising any or all of the following:

1. Specific elements of the SOW such as the contract period, dates for deliverables, etc;
2. The evaluation criteria (both mandatory and point rated requirements);
3. The selection criteria;
4. Any other aspect of the solicitation document.

9.3 Re-tendering a Solicitation

If the decision is made to re-tender the requirement and substantial changes are made to the SOW, then a new PS Online search should be conducted and placed on the contract file. Should a new PS Online search not be conducted, the rationale in support thereof must be documented and placed on the contract file.

Changes made to a solicitation document or SOW or both shall be done so as to NOT restrict competition or favor one potential bidder over another.

9.4 Canceling a solicitation

If during the bidding period or at any time prior to contract award the Contracting Authority decides to cancel a solicitation, the rationale for the cancellation must be documented and placed on the contract file.

10. Contract Preparation

10.1 Contract Value

The contract must stipulate the total contract price, including GST or HST (as applicable) and all travel and living expenses (if applicable).

Note: The total value of all contracts issued against a requirement, inclusive of amendments and all applicable taxes must not exceed the PS Online threshold as specified in section 1.1 Threshold of this document.

10.2 Contract Period

The contract must specify, as a minimum, the completion date of the work or the end date for the project.

Note: The date a contract comes into effect is the date the Contracting Authority signs the contract (unless otherwise specified in the contract or pursuant to a go-ahead letter). The contract period specified cannot commence before the date the contract is signed by the Contracting Authority (or as otherwise specified).

10.3 Resource(s) Performing the Work

The contract must name each of the resources that will be performing the work covered by the contract. Failure to do so could allow the supplier to legally substitute a lower cost resource or resources other than that specified in its proposal without prior approval.

For example, the supplier's original proposal offered Paul Smith at $1,000 per day. If the contract issued does not specifically name Paul Smith, then the Contract may be able to substitute Peter Jones who is paid a per diem rate of $300 per day. Since the contract does not specify who is obligated to perform the work (typically the contract will only state that the supplier, ABC Company, will perform the work at a cost of $1,000 per day), the Contracting Authority would still be obligated to pay the supplier $1,000 per day.

Note: The per diem rate for each resource must be indicated in the contract and must match the proposal submitted by the supplier.

10.4 Tasks and Activities

Any modifications to or additions to the tasks or activities as described in the SOW proposed by the supplier must be incorporated into the contract unless there is evidence on file that the proposed modifications have been negotiated out of the offer.

Milestone or target dates offered by the proposed supplier must be incorporated into the contract.

10.5 Basis of Payment

The Basis of Payment defines what the supplier will be paid for the services provided and must be included in the contract for it to be considered legally enforceable. There are three different types of bases of payment that can be used for PS Online contracts:

1. The Contractor shall be paid a firm all-inclusive per diem rate of *(specify the rate)*, for the services provided in accordance to the Statement of Work contained herein, GST/HST extra.
2. The Contractor shall be paid a firm all inclusive per diem rate of *(specify the rate)*, on an as and when requested basis, for the services provided in accordance to the Statement of Work contained herein, GST/HST extra.
3. In consideration of the Contractor satisfactorily completing all of its obligations under this contract, the Contractor shall be paid the firm lot price of $ ___________, GST/HST extra.

10.6 Method of Payment

The contract document must stipulate the method of payment to be used. Contracts may not be amended to change the method of payment once they have been awarded.

a) Single Payment

A Single Payment is defined as payment in full upon completion of all work and deliveries under the terms of a contract.

b) Progress Payments

A Progress Payment is defined as a payment under the terms of a contract after the performance of the part of the contract in respect of which the payment is made but before the performance of the whole contract. Progress Payments should be based on pre-determined milestones.

c) Advance Payments

Advance Payments are defined as a payment made by or on behalf of Her Majesty under the terms of a contract before the performance of that part of the contract in respect of which the payment is made.

Treasury Board policy, section 12.2.3 requires that:

"Advance payments should be considered only in extraordinary circumstances, that is, when they are considered essential to program objectives. Contractors are expected to finance their work from their reserves or through commercial financing based on the anticipated payments from the contracting authority for full or partial completion of the work. Contracting authorities should consider the financing and interest costs to the Crown, as well as the method of recovery, when negotiating advance payments and should evaluate these costs when comparing other alternatives."

10.7 Security

Where a contract will require that each resource have a specific security level, the following information for each resource must be verified and placed on the contract file:

1. Current security clearance level;
2. Expiry date of security clearance level.

The contract file must contain objective evidence, such as an email or facsimile from either PWGSC or the Contracting Authority's departmental or agency security branch that provides the above information. Such confirmation must be obtained PRIOR to award of the contract.

Note: For additional information on this subject see section 2.5 Security herein.

11. Regret Notices

The Contracting Authority must notify unsuccessful bidders/suppliers as soon as possible after the issuance of a contract.

Regret notices must provide the following information:

1. Name of successful supplier
2. Total value of the contract
3. Total score (technical and financial) for the winning proposal
4. Total score (technical and financial) assigned to the unsuccessful proposal
5. Reason(s) for not accepting the proposal submitted.

The notice shall also offer a debriefing at the unsuccessful bidder's request. Regret notices shall not be sent out until after the contract has been awarded.

12. Debriefings

Debriefings must be made available to unsuccessful bidders on request, but only after contract award. A debriefing should include an outline of the reasons the bid was not successful, making reference to the evaluation criteria. In addition, unsuccessful bidders must be informed of the recourse mechanisms available to them if, despite the information provided during the debriefing, they are still dissatisfied with the handling of a particular procurement.

Note: Care must be taken to protect the confidentiality of information relating to other bids.

Debriefings are NOT to be held until the contract has been issued and accepted by the successful bidder.

14. Contract Amendments

13.1 General

The rationale for amending a contract must be documented and placed on the contract file.

Note: The generation of numerous amendments to a contract may be interpreted as poor requirement planning and as such, contravene Treasury Board Contracting Policy (section 12.9).

13.2 Date

The date that an amendment goes into effect must be prior to the expiry date of the contract. The date that a contract is legally amended is the date upon which both parties (the Contracting Authority and authorized representative of the supplier) have signed and dated the amendment. Contract amendments that have not been signed and dated by both parties BEFORE the contract has expired are NOT valid.

13.3 Changes to Contract Value

1. For non-competitive contracts whose original value is below $25,000, the aggregate value of all amendments must not exceed 50% of the original contract value and must not increase the contract value above $25,000.
2. For non-competitive contracts whose original value is above $25,000, the aggregate value of all amendments must not exceed 50% of the original contract value and must not increase the contract value above $78,500.
3. For competitive contracts, the aggregate value of all amendments shall not exceed 50% of the original contract value and shall not increase the contract value above $78,500.

For example, if the original requirement was competed and the contract awarded was valued at $20,000. The value of this contract may be amended by up to $10,000 for a revised value of $30,000.

The $25,000 limitation is only applicable to sole source contracts.

In all cases, the rationale for increasing the value of the contract must be documented and placed on the contract file.

Note: The total value of all contracts issued against a requirement, inclusive of amendments and all applicable taxes must not exceed the PS Online threshold as specified in section 1.1 Threshold herein.

13.4 Replacement or Additional Resource(s)

If, after contract award, the supplier offers a resource other than or in addition to the resource(s) covered in the contract, the supplier must provide the following information, in writing, to be placed on the contract file for each proposed, replacement or additional resource:

• Reason(s) for offering the replacement or additional resource;
• For competitive requirements, objective evidence must be submitted to the Contracting Authority demonstrating that each proposed replacement or additional resource meets the mandatory and point rated requirements specified in the original solicitation document;
• Ensure that the proposed replacement resource has equal or better qualifications than the original resource(s) covered in the contract.

  For each replacement or additional resource, the Contracting Authority must ensure that:

• The resource has the same or better qualifications as the resource specified in the original contract;
• The resource meets all the mandatory and point rated requirements specified in the original solicitation document;
• The resource is registered with PS Online within the supplier's PS Online portfolio of resources;
• The per diem rate offered for the replacement or additional resource must be:
  • equal to or lower than the per diem rate shown for the replacement or additional resource in the PS online system; and
  • equal to or lower than the per diem rate for original resource specified in the contract.

Care must be taken when accepting a replacement resource especially if one or more potential bidders declined to bid based on not having the required resource available.

Documentation noted above shall be placed on the contract file.

Note: For non-competitive requirements, a replacement resource may not be considered if:

1. a competitive type PS Online search was conducted using search criteria consistent with the SOW that resulted in only one resource being returned; or
2. the procurement strategy was based on the Contracting Authority citing the fourth exception for setting aside the requirement for competition (i.e. only one person or firm is capable of performing the contract) outlined in Part 1, Section 6(d) of the Government Contracts Regulations.

13.5 Changes to the SOW

Contract amendments that result in significant revisions to the original SOW must be justified, documented and placed on the contract file. Included in the justification shall be a rationale for not re-tendering the original solicitation.

13.6 Changes to the Duration of the Contract

The rationale for extending the duration of the contract, regardless of the number of days, must be documented and placed on the contract file. The Contracting Authority should consider negotiating compensation from the supplier in cases where the supplier is at fault.

Extending the duration of a contract such that the 100 working day threshold is exceeded requires approval at the Director level or above. Approval, in writing, must be placed on the contract file. The requirement for approval at the Director level or above does not affect the signing authority level appropriate for the value of the contract in question.

Note: A project whose duration has an expected level of effort, from a single resource, in excess of 100 working days can possibly create an employer/employee relationship. Therefore, senior management must be made aware of such projects.

For additional information on employer/employee relationships visit the Treasury Board website.

13.7 Changes to the Commencement Date of the Contract

The Contracting Authority should carefully assess the potential ramifications of delaying the start of a project, especially where the procurement was competitive. The Contracting Authority must determine whether or not potential bidders failed to submit a proposal because the requested resource was not available to start on the original date specified. If there is a reasonable chance that this occurred, then consideration should be given to re-tendering the requirement.

The rationale for changing the commencement date of the contract must be documented and placed on the contract file.

13.8 Supplier Name Change

If a supplier advises that the name of its organization has changed, the supplier must confirm the new name in writing and also confirm the reason for the name change. If the name change is the result of the creation of a new legal entity, the Contracting Authority must consult with its legal advisors to determine the steps necessary to effect such a change.

Should the name change not be a result of the creation of a new legal entity, an amendment to the contract may be sufficient. The Contracting Authority must consult with its legal advisors to confirm the steps necessary to effect such a change.

All steps taken to resolve this situation must be documented and placed on the contract file.

13.9 Assignment of Contract

If a supplier wishes to transfer a contract or contracts to another legal entity, an Assignment is required. The Contracting Authority must consult with its legal department to determine the steps necessary to effect such an assignment.

All steps taken to resolve this situation must be documented and placed on the contract file.

14.10 Amalgamating, Merging of Companies

An amalgamation or a merger usually results in a new legal entity. In such instances an assignment of the contract may be required from the original supplier to the new legal entity. The Contracting Authority must consult with its legal department to determine the steps necessary to effect such an assignment.

All steps taken to resolve this situation must be documented and placed on the contract file.

14.11 Changing the Method of Payment

Amendments to change the method of payment are NOT allowed.

14. Other

14.1 Contract Splitting

Contract splitting is defined as a subdivision of a project or task into multiple phases/contracts to avoid exceeding the applicable limits of PS Online. Contract splitting is a breach of the Government Contract Regulations.

Examples of practices that could be considered contract splitting would include, but are not limited to:

1. Awarding multiple contracts to the same supplier/resource either simultaneously or at regular intervals that each contain a SOW that represent or could be interpreted as being individual phases of a larger project.
2. Awarding contracts to different suppliers for the same work.

   Contracting authorities must not split contracts or contract amendments in order to avoid obtaining either the approval required by statute, the Treasury Board (TB) Contracts Directive or appropriate management approval within the department/agency. Furthermore, contracts must not be split to avoid obligations under international trade agreements, or the application of the Federal Government procurement policies.

3. Awarding contract for the same resource with another supplier for the same work.

14.2 Follow-up Contracts

Follow-up contracts is defined as the practice of awarding a new contract for the services of a specific resource shortly after the expiry of another contract, to the same resource, that includes a SOW that is identical to or very similar to that contained in the first contract.

14.3 Contracts for the same Work

The Contracting Authority should consider the issuance of a single multi year contract in cases where it becomes clear that the same need exists periodically during a single or several fiscal years.

Recommended procurement training available to Public Servants

Classroom Courses:

• Canada School of Public Service - Fundamentals 1: Introduction to Procurement (M718)
• Canada School of Public Service - Developing a Statement of Work and Selection Criteria (M711)

Online Courses:

• Canada School of Public Service - Fundamentals 1: Overview of Procurement (C235)