Contractual Basis for Claims

Contractor Rights and Obligations

Public Services and Procurement Canada (PSPC) contract documents provide contractors with a number of circumstances where claims may be presented. If a reasonable settlement cannot be negotiated, the contractor has the right to request various disputes resolution processes, some available under the contract (mediation or arbitration) and others available as a last resort through the legal process (litigation). The contract document outlines the contractor's responsibilities with respect to additional payment requests, e.g.: with claims for delay and substantial unexpected subsoil conditions, the contractor must provide a "notice of intent to claim", otherwise forfeit the right to claim under the contract. The contract appears to be quite clear in this requirement for a written notice within a specified time. However, there are cases where mediators and legal advisors have taken the view that, if PSPC is fully aware of the condition giving rise to the claim, written notice is not necessarily required. In cases where the contractor has a clearly justified claim, it may be difficult to reject on grounds of lack of notice only. Claim payments must fall within the terms of the contract in order to be payable. Any payment for claims outside the terms of the contract must be dealt with under an "ex gratia"Footnote * payment process.

Potential claimants are:

Public Services and Procurement Canada Rights and Obligations

PSPC may, under the terms of the contract, initiate assessments and/or counterclaims against contractors, consultants, and occasionally against Surety or Insurance companies. In negotiating settlement of a claim with a contractor, PSPC must accept responsibility for the actions of the PSPC consultants and others contracted by PSPC who may have caused delay. The question of recovery of any payments to the contractor which are attributable to lack of performance of consultants, or others, must be considered and appropriate action taken under the respective terms of those contracts, to recover PSPC costs.

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