Context and purpose of the Code
On this page
- The Procurement process: Openness, fairness and transparency
- Safeguards and consequences
- Key legislation and policies
The Government of Canada spends billions of dollars a year on the procurement of goods and services. The government has a responsibility to maintain the confidence of the vendor community and the Canadian public in the procurement system, by conducting procurement in an accountable, ethical and transparent manner.
The Code of Conduct for Procurement provides all those involved in the procurement process – public servants and vendors alike – with a clear statement of mutual expectations to ensure a common basic understanding among all participants in procurement.
The Code reflects the policy of the Government of Canada and is framed by the principles set out in the Financial Administration Act and the Federal Accountability Act. It consolidates the federal government's measures on conflict of interest and anti-corruption as well as other legislative and policy requirements relating specifically to procurement. This Code is intended to summarize existing law; it does not change the law or its interpretation.
By providing a single point of reference to key responsibilities and obligations, the government is making the measures easier to find and understand in light of an overall commitment to the highest standards of ethical conduct. The Code will be reviewed as necessary to ensure it continues to meet this objective.
The government expects that all those involved in the procurement process will abide by the provisions of this Code.
The Procurement process: Openness, fairness and transparency
In Canada, fairness, openness and transparency are assured through compliance with the Financial Administration Act, the Government Contracts Regulations and Canada's international and national trade agreements, the World Trade Organization-Agreement on Government Procurement, the North American Free Trade Agreement, the Canada-Chile Free Trade Agreement, the Canada-Peru Free Trade Agreement, the Canada-Colombia Free Trade Agreement and the Agreement on Internal Trade. In addition, the government's procurement activities are also governed by land claims agreements with Canada's Aboriginal peoples.
In addition to the legal provisions, the tenets of fairness, openness and transparency are further assured by Treasury Board policies, Public Services and Procurement Canada (PSPC) procurement policies and the internal procedures adopted by individual government departments and agencies.
A list of key relevant legislation and policies is included at the end of this Code.
The Code of Conduct for Procurement applies to all transactions entered into by PSPC either for their own procurements or on behalf of a client department.
Public servants and vendors each have responsibilities in the contracting process.
Responsibilities of public servants
Public servants serve the Canadian public by acquiring goods and services, including construction services, required to achieve the objectives approved by the government. In performing these activities, including defining requirements and evaluating bids/offers/arrangements, they adhere to the laws, regulations and policies established by the government. As public servants, they commit to uphold the democratic, professional, ethical and people values of the Values and Ethics Code for the Public Sector. At the time of signing and accepting their offer of employment, public servants acknowledge that compliance with the Values and Ethics Code for the Public Sector is a condition of employment.
Public servants connected with the collection, management or disbursement of public money are required, under the Financial Administration Act, to report in writing to a superior officer any knowledge or information related to 1) the contravention of, or 2) fraud committed by any person against Her Majesty, under the Financial Administration Act or regulations or any revenue law.
Public servants must perform their duties and arrange their private affairs so that public confidence and trust in the integrity, objectivity and impartiality of government are conserved and enhanced. Public servants must comply with the requirements of the Values and Ethics Code for the Public Sector and the Policy on Conflict of Interest and Post-Employment and with any additional departmental guidelines. The following elements of the Values and Ethics Code for the Public Sector and the Policy on Conflict of Interest and Post-Employment are of particular relevance in procurement.
Conflict of interest measures
A public servant maintains public confidence in the objectivity of the public service by preventing and avoiding situations that could give the appearance of a conflict of interest, result in a potential conflict of interest or result in an actual conflict of interest.
- are required to evaluate their assets and liabilities, taking into consideration the nature of their official duties and the characteristics of their assets. If there is any real, apparent or potential conflict of interest between the carrying out of their official duties and their assets or liabilities, they are to report this matter to their deputy head in a timely manner
- may engage in employment outside the public service and take part in outside activities unless the employment or activities are likely to give rise to a real, apparent or potential conflict of interest or would undermine the impartiality of the public service or the objectivity of the public servant
- considering involvement in political activity should seek the advice of their manager, a designated departmental official, the Public Service Commission (PSC) or a human resources advisor before acting
- are not to accept any gifts, hospitality or other benefits that may have a real, apparent or potential influence on their objectivity in carrying out their official duties and responsibilities or that may place them under obligation to the donor. This includes activities such as free or discounted admission to sporting and cultural events, travel or conferences
- may not solicit gifts, hospitality, other benefits or transfers of economic value from a person, group or organization in the private sector who has dealings with the government (with the exception of fundraising for such officially supported activities as the Government of Canada Workplace Charitable Campaign [GCWCC]). When fundraising for such official activities, public servants should ensure that they have prior written authorization from their deputy head in order to solicit donations, prizes or contributions in kind from external organizations or individuals
- are responsible for demonstrating objectivity and impartiality in the exercise of their duties and in their decision-making, whether related to staffing, financial awards or penalties to external parties, transfer payments, program operations or any other exercise of responsibility
All public servants have a responsibility to minimize the possibility of real, apparent or potential conflict of interest between their most recent responsibilities within the federal public service and their subsequent employment outside the public service. Former public servants in executive positions or positions of risk for post-employment conflict of interest, for a period of one year after leaving office, shall not:
- accept appointment to a board of directors of, or employment with, private entities with which they had significant official dealings during the period of one year immediately prior to the termination of their service. The official dealings in question may either be directly on the part of the public servant or through their subordinates
- make representations on behalf of persons or entities outside of the public service to any government department or organization with which they had significant official dealings during the period of one year immediately prior to the termination of their service. The official dealings in question may either be directly on the part of the public servant or through their subordinates
- give advice to their clients or employer using information that is not publicly available concerning the programs or policies of the departments or organizations with which they were employed or with which they had a direct and substantial relationship
Responsibilities of vendors Footnote 1
Vendors must respond to the government's solicitations in an honest, fair and comprehensive manner, accurately reflect their capacity to satisfy the requirements stipulated in the bid/offer/arrangement or contract documents, and submit bids/offers/arrangements and enter into contracts only if they will fulfill all obligations of the contract.
Vendors are obliged to alert the contracting authority to any factual errors that they discover in bid solicitations.
Solicitation and contract provisions
All contracts subject to the requirements of this Code, and all solicitation and other documents relating to the formation of those contracts will incorporate clauses:
- Prohibiting payment of a contingency fee by any party to the contract to a person to whom the Lobbying Act applies
- Prohibiting corruption, collusion, bid-rigging or any other anti-competitive activity in the procurement process
- Requiring that a bidder on a contract for the performance of work, the supply of goods or the rendering of services make a declaration that the bidder has not committed an offence other than an offence for which a criminal pardon has been granted under section 121 ("Frauds on the government" and "Contractor subscribing to election fund"), section 124 (Selling or Purchasing Office), section 380 (Fraud committed against Her Majesty) or section 418 (Selling defective stores to Her Majesty) of the Criminal Code of Canada, or under paragraph 80(1)(d) (False entry, certificate or return) subsection 80(2) (Fraud against Her Majesty) or section 154.01 (Fraud against Her Majesty) of the Financial Administration Act
- Requiring the Contractor's consent to publicly disclose basic information about a procurement contract, and
- Requiring a contractor to return any advance payments and provide the Contractor's consent that the government may cancel the Contract in the event of non-compliance with a deemed term
A vendor bidding on a competitive solicitation or awarded a non-competitive contract must certify that it meets the requirements of the above provisions. After contract award, these solicitation conditions are carried forward as a contractual obligation.
Respect for responsibilities of public servants
To help ensure that the entire procurement process conforms to the highest standards of ethical conduct, vendors should avoid any action that would jeopardize current or former public servants' ability to respect their obligations under the Values and Ethics Code for the Public Sector and the Policy on Conflict of Interest and Post-Employment.
Vendors will not offer or give public servants gifts, hospitality or other benefits that may have a real or apparent influence on their objectivity in carrying out their official duties or that may place them under obligation to the donor. This includes free or discounted admission to sporting and cultural events arising out of an actual or potential business relationship directly related to the public servants' official duties.
Vendors will not employ public servants in activities that might subject public servants to demands incompatible with their official duties or cast doubt on their ability to perform their duties objectively.
Vendors will not hire directly, or through a third party, former public servants during their one-year cooling-off period where this would constitute a violation of post-employment measures under the the Policy on Conflict of Interest and Post-Employment that complements the Values and Ethics Code for the Public Sector.
It will be a condition of all contracts that the vendor has read and agrees to be bound by the terms of this Code of Conduct for Procurement.
Safeguards and consequences
Vendor complaints and procedural safeguards
The Canadian International Trade Tribunal (CITT) has jurisdiction to conduct inquiries into complaints by potential vendors concerning procurement by the federal government that is covered by the Trade Agreements. Vendors may challenge federal government procurement decisions that they believe have not been made in accordance with the requirements of the Trade Agreements. Any potential vendors who believe they may have been unfairly treated during the solicitation or evaluation of bids/offers/arrangements, or in the awarding of contracts subject to the Trade Agreements, may lodge a formal complaint with the CITT. The CITT, which has the powers of a Court of Record, may review all aspects of a procurement action up to and including contract award.
The Office of the Procurement Ombudsman (OPO) is an independent organization included in the portfolio of the Minister of Public Services and Procurement Canada, but operates at an arms length from the department. The Office's overall objective is to strengthen the fairness, openness and transparency of federal procurement. It reviews complaints from suppliers with the objective of solving them quickly and efficiently and possibly resulting in immediate relief to the supplier. More specifically, the Procurement Ombudsman's mandate is to:
- Review the practices of departments for acquiring materiel and services to assess their fairness, openness and transparency and make any appropriate recommendations to the relevant department for the improvement of those practices
- Review any complaint respecting the award of a contract for the acquisition of goods below the value of $25,000 and services below the value of $100,000, where the Agreement on Internal Trade would normally apply if the value was higher than these thresholds
- Review any complaint respecting the administration of a contract for the acquisition of materiel or services by a department, regardless of dollar value
- Ensure that an alternative dispute resolution process is provided, if both parties agree to participate
At present, Public Works and Government Services Canada provides for resolution of contract disputes through PSPC's Business Dispute Management Program, such as Conflict Coaching, Facilitated Discussion and Mediation. For many complex procurements, the government engages independent fairness monitors to provide assurance that the process is conducted in a fair, open transparent and compliant manner.
Under the Public Servants Disclosure Protection Act, any public servant who witnesses or has knowledge of wrongdoing in the public sector workplace may refer the matter for review, investigation and for recommendation of corrective action to the Public Sector Integrity Commissioner. Public servants may also report the matter in confidence and without fear of reprisal to the Senior Officer in their organization designated for this purpose. A member of the public may also bring a public sector wrongdoing to the attention of the Public Sector Integrity Commissioner who would then decide whether to investigate. Public servants are prohibited from retaliating against contractors because they reported government wrongdoing to the Commissioner.
Failure to comply with any of the legislation or policies referred to in this Code is subject to the penalties provided for in the applicable legislation or policy.
Key legislation and policies
- Agreement on Internal Trade
- Canada-Chile Free Trade Agreement
- Canada-Colombia Free Trade Agreement
- Canada-Peru Free Trade Agreement
- Competition Act
- Corruption of Foreign Public Officials Act
- Criminal Code of Canada
- Federal Accountability Act
- Financial Administration Act (including the Government Contracts Regulations)
- Lobbying Act
- North American Free Trade Agreement
- Policy on Conflict of Interest and Post-Employment
- Public Servants Disclosure Protection Act
- Relevant Land Claims Agreements
- Treasury Board—Contracting Policy
- Values and Ethics Code for the Public Sector
- World Trade Organization—Agreement on Government Procurement
Strategic Policy Sector
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