Ineligibility and Suspension Policy

Ineligibility and Suspension Policy (the policy).

This policy is effective as of April 4, 2016.

1. Canada has an obligation to protect and safeguard the use and expenditure of public funds, to ensure stewardship and transparency, and to uphold the public trust in relation to its contracts and real property agreements. Unethical business behaviour by suppliers undermines fair competition, threatens the integrity of markets, is a barrier to economic growth, increases the cost and risk of doing business, and undermines public confidence in government institutions. The Integrity Regime is intended to reduce the instances in which Canada enters into contracts or real property agreements with suppliers that have been convicted of or charged with an offence listed in the policy (a listed offence) linked to unethical business conduct.
2. The Integrity Regime consists of the policy, any directives issued further to the policy, and any clauses used in instruments relating to contracts or real property agreements that incorporate the policy by reference. Public Works and Government Services Canada (PWGSC) may also issue information bulletins associated with the policy to provide greater clarity for informational purposes only.
3. The policy sets out, notably, the circumstances in which PWGSC may declare ineligible or suspend a supplier from award of a contract or real property agreement with Canada (herein referred to as being ineligible or suspended). It also sets out the ineligibility and suspension periods, the criteria for invoking the public interest exception, the process for entering into an administrative agreement, the reduction to a period of ineligibility available pursuant to an administrative agreement, and the process by which PWGSC makes determinations on its own initiative or upon request by a supplier.

• Subject to paragraph (b), the policy applies to any procurement, standing offer, supply arrangement, contract, real property transaction, real property agreement or other instrument that incorporates the policy by reference that is issued by a department or agency identified in schedules I, I.1 and II of the Financial Administration Act, and any other federal entity that voluntarily adopts the policy.
• The policy does not apply to certain specified contracts, real property agreements and other instruments:
  • contracts that relate to the fulfillment of obligations by a public body under:
    • an international agreement to which Canada is a party and in relation to goods or the carrying out of a work or works or the provision of services necessary for the implementation or exploitation of a project related to that agreement;
    • an international agreement relating to the stationing of Canadian troops and in relation to goods or the carrying out of a work or works or the provision of services necessary for the fulfillment of that mission;
  • contracts for goods, services and construction, and real property agreements, in relation to the fully carrying out of a work or works or the provision of services on foreign soil, excluding contracts signed in Canada on behalf of Canada other than those for which the non-application of the policy is authorized by the relevant Deputy Head or equivalent;
  • inter-governmental agreements and intra-governmental agreements;
  • financial contracts;
  • insurance contracts;
  • contracts of employment;
  • contracts and real property agreements that are ancillary or incidental to a main contract or real property agreement;
  • contracts and real property agreements with federal entities that have investigative powers where application of the policy could compromise criminal investigations, national security or public safety;
  • contracts between Canada and Indian Band Councils;
  • transfer payments (grants, contributions, and other transfer payments);
  • contracts under the foreign military sales program;
  • any acquisition, regardless of dollar value, made using a Government of Canada acquisition card;
  • licences of occupation for access to federal real property on third-party lands; and licences of occupation or land use permits for access on third-party lands;
  • contracts for legal services, including legal agent appointments, issued by or under the authority of the Minister of Justice and Attorney General of Canada;
  • contracts for material and expert witnesses retained in support of litigation conducted by or on behalf of the Crown;
  • contracts and real property agreements issued by or on behalf of Correctional Services Canada in circumstances where applying the policy would conflict with its rehabilitation mandate;
  • transactions concerning an interest of land acquired through the Expropriation Act;
  • goods, services and construction contracts, subcontracts and real property agreements with a transaction value below $10,000; and
  • any other contract, class of contract, real property agreement or class of real property agreement excluded by directive issued by PWGSC under the policy.

1. PWGSC is responsible for administering the Integrity Regime on behalf of Canada, making ineligibility and suspension determinations, and entering into administrative agreements.
2. PWGSC may, when considered appropriate, issue a directive with respect to any aspect of the policy. Directives will be used for such purposes as elaborating on or clarifying aspects of the policy, such as establishing monetary thresholds for, or identifying classes of contracts and real property agreements excluded from, application of the policy. Directives issued under the policy form a binding part of the policy. These may be found at the Directives page of the Integrity Regime website.
3. Where a department or agency has the authority to contract or enter into a real property agreement, the determinations made by PWGSC under the policy may be relied upon by that department or agency when making a decision on whether to enter into a contract or real property agreement with a supplier.
4. Departments and agencies may make certain decisions under the Integrity Regime, as noted in the policy. The Public Interest Exception, for instance, is an example where the knowledge and expertise of the department or agency is better suited to deciding whether it is in the public interest to contract with an ineligible or suspended supplier. A department or agency may also exercise the right to terminate a contract or real property agreement, where such right is provided for in the contract or real property agreement.
5. When a department or agency with investigative powers excludes a contract or real property agreement from application of the policy when applying the policy could compromise a criminal investigation, national security or public safety, the department or agency will ensure that the rationale for utilizing the exclusion is recorded on file and aligns with its internal control framework.
6. When Correctional Service Canada excludes a contract or real property agreement from application of the policy when applying the policy conflicts with its rehabilitation mandate, Correctional Service Canada will ensure that the rationale for utilizing the exclusion is recorded on file and aligns with its internal control framework.

Subject to section 8 concerning pardons, PWGSC will determine a supplier to be ineligible in each of the circumstances set out in the table below. The table also sets out the period of ineligibility, as well as the potential reduction to this period that may be obtained pursuant to an administrative agreement.

For the purpose of calculating under sections 6 and 7 whether a supplier has been charged with, or convicted of, an offence in the past three years, the period of time will be calculated by counting backward from, as appropriate,

1. the day PWGSC issues the supplier a Notice of Intention to Suspend, a Notice of Intention to Declare Ineligible, Notice of Suspension, or a Notice of Ineligibility, whichever is issued first;
2. the day PWGSC receives a request from the supplier to determine whether it is ineligible for award of a contract or real property agreement; or
3. the day PWGSC receives an offer from the supplier in a procurement process or real property transaction,

whichever occurs first.

Subject to section 8 concerning pardons, PWGSC may, in its discretion, determine a supplier to be ineligible or suspended in the circumstances set out in the table below. The table also sets out the period of ineligibility or suspension, as well as the potential reduction to the period of ineligibility or suspension that may be obtained pursuant to an administrative agreement.

For purposes of determining whether a foreign offence is similar to a listed offence, PWGSC will take into account the following factors:

1. in the case of a conviction, whether the court acted within its jurisdiction;
2. whether the supplier was afforded the right to appear during the court’s proceedings or to submit to the court’s jurisdiction;
3. whether the court’s decision was obtained by fraud; or
4. whether the supplier was entitled to present to the court every defence that the supplier would have been entitled to present had the proceeding been tried in Canada.

• Canadian pardons: PWGSC will not make a determination of ineligibility in respect of a listed offence if the supplier demonstrates that it has (or its affiliate has, if applicable):
  • been granted an absolute discharge in respect of the offence, or has been granted a conditional discharge in respect of the offence and those conditions have been satisfied;
  • been granted a pardon under Her Majesty's royal prerogative of mercy;
  • been granted a pardon under section 748 of the Criminal Code;
  • received a Record Suspension ordered under the Criminal Records Act; or
  • been granted or issued a pardon under the Criminal Records Act, as that Act read immediately before March 13, 2012.
  (each a “Canadian pardon”).
• Foreign pardons: PWGSC will not make a determination of ineligibility in respect of a foreign offence that PWGSC has determined is similar to a listed offence if the supplier demonstrates that it has (or its Affiliate has, if applicable) at any time benefited from a foreign measure that, in PWGSC’s opinion, is similar to a Canadian Pardon (a “foreign pardon”).
• Existing determinations of ineligibility will be cancelled: Upon receiving information demonstrating that a supplier or its affiliate (if the supplier’s ineligibility is related to the conviction of the affiliate) has received a Canadian pardon or a foreign pardon, PWGSC will rescind any existing determination of ineligibility based on the conviction for which a pardon was received.

• PWGSC makes determinations of supplier ineligibility pursuant to the policy on its own initiative, upon receiving a request from a supplier to conduct a review to determine its ineligibility or upon receiving a request from a department, agency or other federal entity to which the policy applies.
• PWGSC does not make determinations of eligibility.
• PWGSC may make separate determinations of ineligibility with respect to the same supplier based on different convictions or other circumstances relevant to the policy.
• If a supplier requests that PWGSC conduct a review to determine whether it is ineligible, the supplier must provide to PWGSC all relevant information regarding convictions relating to any listed offence and circumstances that may result in ineligibility under the policy. If an affiliate has been convicted of a listed offence or of a foreign offence that PWGSC has determined is similar to a listed offence, the supplier must certify that it did not direct, influence, authorize, assent to, acquiesce in or participate in the commission of the offence(s) of which its affiliate has been convicted.
• In making a determination regarding a supplier’s ineligibility and the applicable period of ineligibility, PWGSC may consider any information that, in its judgment, is authentic and relevant. Such information may come from a wide range of sources, including, but not limited to, the supplier, court decisions, law enforcement agencies and the federal government. PWGSC is responsible for coordinating the collection and assembly of relevant information about a supplier, and analyzing the information collected and supplied.
• PWGSC may request from a supplier any information that it considers relevant to making a determination of ineligibility. PWGSC may also request that the supplier retain a third party pursuant to section 18 titled Engagement of a third party to validate any or all information provided by the supplier or to provide information with respect to foreign convictions. If the supplier does not submit the requested information or refuses to retain a third party to provide the necessary validation or information, PWGSC may declare the supplier ineligible.
• In making a determination, PWGSC may rely on a certification or information from a supplier or third party. PWGSC may make a new determination at any time; for example, if, in its opinion, the certification or information provided by the supplier or third party was false or misleading.
• Where PWGSC concludes that circumstances exist that result in the automatic ineligibility of a supplier, PWGSC will proceed directly to sending the supplier a Notice of Ineligibility.
• Where PWGSC concludes that there is a reasonable basis for making a determination of ineligibility pursuant to the policy with respect to circumstances that do not lead to automatic ineligibility, before making the determination PWGSC will issue a Notice of Intention to Declare Ineligible to the affected supplier by registered mail or courier setting out:
  • the full legal name of the supplier;
  • the circumstances that PWGSC considers relevant to making a determination of ineligibility with respect to the supplier; and
  • the time within which the supplier may file evidence and written submissions to PWGSC.
• Upon receipt of a Notice of Intention to Declare Ineligible, a supplier may present evidence and written submissions to PWGSC within the time specified by PWGSC. The written submissions may include any information the supplier considers relevant to the determination. PWGSC will consider all timely evidence and submissions prior to making its determination. PWGSC may also request that the supplier retain a third party pursuant to section 18 titled Engagement of a third party to provide additional information with respect to the supplier or to validate any or all information provided by the supplier. If the supplier does not make submissions within the time specified by PWGSC, or retain a third party as requested by PWGSC, PWGSC may declare the supplier ineligible.
• If a supplier requests that PWGSC make a determination on its ineligibility and PWGSC determines that there is an insufficient basis for making such determination, PWGSC will so advise the supplier in writing. Any such finding can be revisited at any time.
• Upon making a determination of ineligibility pursuant to the policy, PWGSC will send a Notice of Ineligibility to the affected supplier by registered mail or courier setting out:
  • the full legal name of the supplier;
  • the full legal name of any affiliate, to the extent that the determination of ineligibility is related to an affiliate;
  • the circumstances upon which PWGSC made the determination of ineligibility;
  • the period of ineligibility; and
  • if applicable, that the supplier has a right to a limited review pursuant to section 11 titled Limited Review of Determinations of Ineligibility.
• Unless a determination is rescinded further to a limited review pursuant to the Limited review of determinations of ineligibility section, below, PWGSC’s determination is final and binding on a supplier.
• The determination of ineligibility takes effect on the date of the determination.
• After receipt of a Notice of Ineligibility, a supplier may at any time request to have the ineligibility period reduced by way of an administrative agreement. To initiate this process, the supplier must submit a request to the Registrar of Ineligibility and Suspension for consideration. In order for the request to be considered, the supplier is required to demonstrate that it cooperated with law enforcement authorities or has undertaken remedial action(s) to address the wrongdoing that led to its ineligibility. The supplier may be required to retain the services of a third party as part of this process.

1. PWGSC may determine that a successor entity to an ineligible or suspended supplier is ineligible or suspended, as the case may be, in circumstances where, in the opinion of PWGSC, the succession (e.g., merger, acquisition, divestiture, etc.) occurred for the purpose of avoiding the ineligibility or suspension, or where the result of the succession would be the avoidance of the ineligibility or suspension.
2. Where, after a corporate entity is charged with or convicted of a listed offence, or after the occurrence of other circumstance, that will or may support a determination by PWGSC of ineligibility or suspension with respect to the corporate entity, or after such determination, the corporate entity or the corporate family to which the corporate entity belongs, including parent companies, intermediate corporate entities, subsidiaries and affiliates, undergoes a corporate restructuring on the individual entity or family level, respectively, including merger, amalgamation, acquisition, takeover, divestiture, consolidation, sell-off, spin-off, etc., where the result of the restructuring would be the avoidance of an ineligibility or suspension determination, PWGSC may determine that the corporate entity, a former affiliate and a successor entity is ineligible or suspended, as the case maybe.
3. In exercising its discretion under this section, PWGSC will consider the objectives of the policy, recognizing that a supplier should not be able to circumvent a determination under the policy and that innocent parties should not be penalized.

1. A supplier may request a limited review of a determination of ineligibility on the sole basis that it did not direct, influence, authorize, assent to, acquiesce in or participate in the commission of the offence(s) of which its Affiliate has been convicted that resulted in the determination that the supplier is ineligible pursuant to the policy.
2. To request such limited review of a determination, a supplier must submit a written Request for Limited Review within 30 days from receipt of the Notice of Ineligibility. The supplier may, with the Request for limited review, provide new evidence and written representations to PWGSC for consideration. The Request for limited review does not operate as a stay of the determination of ineligibility.
3. PWGSC will conduct a review of the determination having regard to the Request for limited review and any new evidence and written submissions. PWGSC may seek further information or clarification from the supplier. At the conclusion of the review, PWGSC will either confirm or rescind the determination. PWGSC will give the supplier written notice of the decision. If the determination of ineligibility is rescinded, PWGSC will immediately remove the supplier from the Integrity Database and the public Ineligibility and Suspension List, if applicable.
4. If a determination that a supplier is ineligible to enter into a contract or real property agreement is rescinded and PWGSC subsequently becomes aware of information that was not considered at the time the rescission was issued, PWGSC may make a new determination.

• Where a supplier is charged with or admits guilt to a listed offence or of a similar offence in a foreign jurisdiction, PWGSC may send a Notice of Intention to Suspend to the supplier by registered mail or courier, setting out:
  • the full legal name of the supplier;
  • the charge(s) or admission(s) of guilt that PWGSC considers relevant to the suspension; and
  • the time within which the supplier may present evidence and written submissions to PWGSC.
• PWGSC may make separate suspension determinations with respect to the same supplier based on different charges or admissions of guilt.
• Upon receipt of a Notice of Intention to Suspend, a supplier may present evidence and written submissions to PWGSC as to why it should not be suspended, within the time specified by PWGSC. The evidence and submissions may include any information the supplier considers relevant, including but not limited to any remedial measures undertaken by the supplier to address the cause(s) of the alleged wrongdoing.
• In the case of a charge for a foreign offence that, in PWGSC’s opinion, may be similar to a listed offence, the supplier may be required by PWGSC to retain the services of an independent third party, pursuant to section 18 titled Engagement of a third party, to provide information on the foreign offence. Additional time may be afforded to the supplier in these situations.
• PWGSC will consider all timely evidence and submissions prior to deciding whether a suspension is warranted in the circumstances. A decision to suspend will be based on whether, in the opinion of PWGSC, doing business with the supplier poses a significant risk to Canada.
• As an alternative to a suspension, PWGSC may require a supplier to enter into an administrative agreement, pursuant to the administrative agreement section set out below. An administrative agreement is designed to provide assurances from the supplier that it will conduct business with Canada in an ethical and responsible manner. The existence of an administrative agreement will be made public while the content of the agreement will remain confidential to the extent permitted by law.
• If the supplier does not present evidence or written submissions within the prescribed time, fails to retain a third party where requested by PWGSC to do so or if PWGSC determines that a suspension is warranted in the circumstances, PWGSC will issue a Notice of Suspension to the supplier. Following the issuance of the Notice of Suspension, the name of the supplier will be listed on the Integrity Database. The names of all non-individual suppliers will also be listed on the public Ineligibility and Suspension List.
• A suspended supplier may request at any time to enter into an administrative agreement for purposes of staying the suspension.
• Where a suspension is based on charges that are later withdrawn, the suspension, and any administrative agreement entered into in lieu of or to stay the suspension, will be terminated.

Once PWGSC has determined that a supplier is ineligible to enter, or suspended from entering, into a contract or real property agreement:

1. PWGSC will enter the name of the supplier in its Integrity Database as an ineligible or suspended supplier;
2. if the supplier is not an individual, PWGSC will also publish the name of the supplier on its public Ineligibility and Suspension List, together with the supplier’s address, and the period of ineligibility that applies to the supplier. The Ineligibility and Suspension List can be found on the Integrity Regime website; it is maintained by PWGSC’s Registrar of Ineligibility and Suspension;
3. subject to the Public Interest Exception being invoked in a particular transaction, an ineligible or suspended supplier that participates in a competitive solicitation that is subject to the policy will be declared non-responsive;
4. subject to the Public Interest Exception being invoked in a particular transaction, an ineligible or suspended supplier is unable to enter into a contract or real property agreement awarded through a non-competitive process that is subject to the policy;
5. where a supplier is determined to be ineligible or suspended during performance of a contract or real property agreement subject to the policy, Canada may, following a notice period of no less than two weeks, during which time the supplier may make representations on such matters as maintaining the contract or real property agreement, terminate the contract or real property agreement for default. A termination for default does not restrict Canada’s right to exercise any other remedy that may be available against the supplier. The supplier may be required to enter into an administrative agreement with PWGSC as an alternative to termination on such terms and conditions as PWGSC considers necessary to safeguard the integrity of government contracting and real property transactions;
6. notwithstanding any other term of the policy, at the end of the period of ineligibility, unless the supplier has entered into and satisfied all the conditions of an administrative agreement with PWGSC, the supplier will be required to submit a report from a third party to PWGSC prior to being eligible to enter into any contract or real property agreement with Canada. The report must demonstrate that the supplier has undertaken sufficient actions to address the causes of the conduct that led to its ineligibility. A supplier remains ineligible to contract or enter into a real property agreement with Canada if it fails to provide such report or if the report fails to satisfy PWGSC that the supplier has satisfactorily addressed the causes of the conduct that led to its ineligibility; and
7. a decision to delay award of a contract or real property agreement while an ineligibility determination is under limited review is at the sole discretion of the contracting authority.

• Entering into an administrative agreement, and the terms and conditions of an administrative agreement, are within the sole discretion of PWGSC.
• An administrative agreement may be required to:
  • reduce the period of a supplier’s ineligibility pursuant to the policy up to the “Reduction to the period of ineligibility/suspension pursuant to an administrative agreement”, set out in the table in sections 6 and 7; or
  • enter into a contract or real property agreement further to a Public Interest Exception where time is not of the essence.

    An administrative agreement may also be required by PWGSC:

  • in lieu of, or to stay, a suspension; or
  • in lieu of terminating an existing contract or real property agreement due to a determination of ineligibility or suspension.
• Among other things, PWGSC may require terms and conditions relating to such things as separation of specific employees from management or programs; implementation or extension of compliance programs; employee training and information; outside auditing; access by PWGSC to specific documentation, information and/or records; reporting by a third party as described below; or any other remedial or compliance measure that PWGSC considers to be in the public interest.
• If, in the opinion of PWGSC, an ineligible supplier has breached any of the terms or conditions of an administrative agreement, PWGSC may terminate the administrative agreement and lengthen the period of ineligibility by a period to be determined by PWGSC.
• If a supplier is suspended as a result of being charged with, or admitting guilt of, a listed offence or a similar foreign offence, PWGSC may stay the suspension as a result of entering into an administrative agreement with the supplier. In these circumstances, if, in the opinion of PWGSC, the supplier breaches any of the terms or conditions of the administrative agreement, PWGSC may terminate the administrative agreement for default and reinstate the suspension pending final disposition of the charges.
• Despite any other term of the policy, administrative agreements remain in effect unless they are terminated by a party to the administrative agreement, until all obligations have been fully satisfied by the supplier such that the supplier is no longer ineligible pursuant to the policy (i.e., the original period of ineligibility has expired), on final disposition, or withdrawal of charges or for any other reason consistent with the policy.
• Where a supplier chooses to terminate an administrative agreement while ineligible or otherwise suspended, the remaining time of the original period of ineligibility will be reinstated or the remaining time of the original period of suspension will be imposed or re-imposed, as the case may be.
• Despite any other term of the policy, except where a Public Interest Exception is invoked, as set out below, the entering into force of an administrative agreement with an ineligible or suspended supplier does not entitle the supplier to participate in any then ongoing solicitation for the award of a contract or real property agreement. Subject to the terms of the administrative agreement, the supplier may participate in all solicitations commenced after the entering into force of the Administrative Agreement.

Unless the supplier has no capacity to contract with Canada pursuant to subsection 750(3) of the Criminal Code, a contracting authority may enter into a contract or real property agreement with an ineligible or suspended supplier if the relevant Deputy Head or equivalent considers that doing so is in the public interest. The reasons for invoking a Public Interest Exception include, but are not limited to:

1. the need to respond to an emergency where delay would be injurious to the public interest;
2. the supplier is the only person capable of performing the contract or providing the real property agreement;
3. the contract is essential to maintain sufficient emergency stocks in order to safeguard against possible shortages; and
4. not entering into the contract or real property agreement with the supplier would have a significant adverse impact on the health, national security, safety, public security or economic or financial well-being of the people of Canada or the functioning of any portion of the federal public administration.

Unless time is of the essence (e.g., an emergency, unforeseen urgency), a supplier will be required to enter into an administrative agreement before being awarded a contract or real property agreement further to a Public Interest Exception.

• For purposes of the policy, “first-tier subcontractor” means a subcontractor with whom a supplier has a direct contractual relationship to perform a portion of the work pursuant to a contract or real property agreement between the supplier and Canada (meaning all the activities, services, goods, equipment, matters and things required to be done, delivered or performed by the supplier under the contract or real property agreement), unless the subcontractor merely supplies commercial-off-the-shelf goods to the supplier.
• Suppliers are required to verify the status of their prospective first-tier subcontractors prior to bid submission and before entering into a direct contractual relationship. Suppliers can verify the status of a prospective first-tier subcontractor in one of two ways:
  • in the case of an individual, make enquiries of the Registrar of Ineligibility and Suspension to ensure that the prospective subcontractor is not ineligible or suspended under the policy. To make this enquiry, the supplier must send a written request to the Registrar of Ineligibility and Suspension, along with a signed consent form from the prospective subcontractor permitting PWGSC to disclose to the supplier information regarding the prospective subcontractor’s status under the policy. The consent form is available online on the Forms page of the Integrity Regime website. The Registrar of Ineligibility and Suspension will, upon receipt of the consent form, provide written confirmation of whether the prospective subcontractor is ineligible or suspended under the policy.
  • in the case of a prospective subcontractor that is not an individual, the supplier is expected to consult the public Ineligibility and Suspension List found on the Integrity Regime website to confirm that the prospective subcontractor is not ineligible or suspended under the policy.
• The Registrar of Ineligibility and Suspension can be contacted at the following address:
  • Registrar of Ineligibility and Suspension
  • Departmental Oversight Branch
  • Public Services and Procurement Canada
  • 11 Laurier Street
  • Place du Portage
  • Phase III, Tower A, 10A1 – Room 105
  • Gatineau (Quebec)
  • Canada K1A 0S5
  • Telephone: 1-844-705-2084
  • Email: PWGSC.O.integrity-TPSGC.O.integrite@pwgsc-tpsgc.gc.ca
• Subject to obtaining written consent from the relevant Deputy Head or equivalent, discussed below, a supplier cannot subcontract with an ineligible or suspended first-tier subcontractor to perform work under a contract or real property agreement with Canada. A supplier that enters into such contract or real property agreement with an ineligible or suspended first-tier subcontractor without written consent in circumstances where information about that subcontractor’s ineligibility or suspension was reasonably available to the supplier by following the process described in paragraph 16(b) will be ineligible to contract, or enter into a real property agreement, with Canada for five years.
• If a supplier wishes to propose, or has a contract with Canada and wishes to use, a first-tier subcontractor that is ineligible or suspended under the policy, the supplier must obtain written consent from the relevant Deputy Head or equivalent in advance of the proposal or use. Consent may be sought by request to the contracting authority. Consent cannot be provided with respect to a prospective subcontractor that has lost its capacity to receive any benefit under a contract between Canada and any other person, further to subsection 750(3) of the Criminal Code. In the event that the relevant Deputy Head or equivalent provides such consent, the contracting authority must forthwith advise the Registrar of Ineligibility and Suspension.
• The Contracting Authority will advise the supplier identified as the top-ranked bidder/offeror according to the evaluation criteria that it is required to verify the status of all proposed first-tier subcontractors before its bid/offer can be accepted for award of a contract or real property agreement. The supplier must advise the Contracting Authority in writing within two working days of the results of the integrity verification. If the verification reveals that a proposed first-tier subcontractor was determined to be ineligible or suspended after bid/offer closing, the supplier may, prior to award of the contract or real property agreement,
  • unless prohibited by section 750(3) of the Criminal Code, seek written consent from the relevant Deputy Head or equivalent to enter into a subcontract with the ineligible or suspended proposed first-tier subcontractor to perform work under the contract or real property agreement. Consent may be sought by written request to the Contracting Authority. Where consent is provided, the Contracting Authority must forthwith advise the Registrar of Ineligibility and Suspension; or
  • if the consent sought in (i) is not provided, or if preferred, submit to the Contracting Authority a substitute for the ineligible or suspended proposed first-tier subcontractor, and supply all information with respect to the substitute required in the procurement process or real property transaction. The supplier’s bid/offer will be re-evaluated using the substitute first-tier subcontractor and the ranking of suppliers will be re-determined. When substituting an ineligible or suspended first-tier subcontractor, the supplier is not permitted to amend its bid/offer price.
• The Contracting Authority may specify a time within which the supplier must seek consent under (i) or submit a substitute first-tier subcontractor and supply all necessary information under (ii), which will be no less than 10 working days. If the supplier does not make a written request for consent, or submit a substitute subcontractor and supply all necessary information, within the time specified, Canada may declare the bid/offer non-responsive. Upon request, or on its own initiative, Canada may grant an extension to the time specified.
• If a supplier’s first-tier subcontractor is determined to be ineligible or suspended during performance of a contract or real property agreement, the supplier may choose to maintain or terminate the subcontract. If a supplier’s first-tier subcontractor has lost its capacity to receive any benefit under a contract between Canada and any other person, further to section 750(3) of the Criminal Code, the supplier must terminate the subcontract.

• List of names: All suppliers, regardless of their status under the policy, must submit the following information when participating in a procurement process or real property transaction:
  • suppliers that are corporate entities, including those bidding as joint ventures, must provide a complete list of the names of all current directors or, for a privately owned corporation, the names of the owners of the corporation;
  • suppliers bidding as sole proprietors, including sole proprietors bidding as joint ventures, must provide a complete list of the names of all owners; or
  • suppliers that are a partnership do not need to provide a list of names.

  If the list of names has not been received in a procurement process or real property transaction by the time the evaluation of bids or offers is completed, or has not been received in a procurement process or real property transaction where no bid/offer will be submitted, the contracting authority will inform the supplier of a time within which to provide the information. Providing the required names is a mandatory requirement for award of a contract or real property agreement. Failure to provide the list of names within the time specified will render a bid or offer non-responsive, or the supplier otherwise disqualified for award of a contract or real property agreement.

• During the evaluation of bids or offers, a supplier must, within 10 working days, inform the contracting authority in writing of any changes affecting the list of names submitted further to section 17(a).
• During performance of a contract or real property agreement, a supplier has a continuing obligation to inform the Registrar of Ineligibility and Suspension in writing, within 10 working days, of:
  • any charge, conviction or other circumstance relevant to the policy with respect to itself, its affiliates and its first-tier subcontractors; and
  • any change affecting the list of names submitted further to section 17(a).
• Canada may verify information provided by a supplier at any time during the period of a contract or real property agreement or the period during which any other instrument (e.g., standing offer, supply arrangement) is valid. Canada may request additional information, including validations from a third party, consent forms and other evidentiary elements, proving such matters as identity and eligibility to contract or enter into a real property agreement with Canada. The supplier must provide the requested information within the time specified. Failure to do so may render the supplier ineligible to contract or enter into a real property agreement with Canada.
• Provision of additional information: The supplier must provide any further information relevant to the policy, including certifications and third-party validations, by the time so requested by PWGSC or the contracting authority.

• PWGSC may require a supplier to retain a third party in the following circumstances:
  • in connection with a determination of ineligibility, if PWGSC requires,
    • validation of a certification or declaration,
    • validation of information provided by a supplier with respect to whether it directed, influenced, authorized, assented to, acquiesced in or participated in the commission of a listed offence by an affiliate, or
    • information with respect to foreign charges and convictions;
  • where information pertaining to the supplier is required by PWGSC for purposes of determining whether a reduction is warranted to the period of the supplier’s ineligibility through an administrative agreement;
  • pursuant to an administrative agreement, in which case the terms and conditions of appointment of the third party will be described in the administrative agreement. The third party will be required to provide periodic reporting to PWGSC, as provided for in the administrative agreement; and
  • prior to submitting a bid/offer after the supplier’s period of ineligibility has expired, if the supplier did not enter into an administrative agreement with PWGSC or if PWGSC determined that the supplier breached the administrative agreement. In this case, the third party will be required to provide a report confirming that measures have been put in place in order to avoid the re-occurrence of the types of wrongdoing that led to the ineligibility. Failure to provide the third-party report will result in any bid or offer being declared non-responsive.

Where required by PWGSC, the supplier must identify and propose a third party within the time specified. It is within the sole discretion of PWGSC to determine whether the proposed third party has sufficient expertise, experience and independence to provide the services required. Suppliers must seek PWGSC’s written approval prior to retaining a particular third party.

In each case, the supplier will be responsible for retaining and remunerating the third party, and may be required to provide a copy of the terms of engagement to PWGSC.

For the purposes of the policy, the following definitions apply:

"acquisition card"

is a charge card issued under a contract between a card issuer and Canada for the procurement and payment of goods and services for authorized official government business.

"administrative agreement"

is a negotiated agreement between a supplier and PWGSC.

"affiliate"

means

• is a person, including, but not limited to, parent companies, subsidiaries, whether or not wholly or partially owned, as well as a senior officer;
• one person is an affiliate of another person if,
  • one person is controlled by the other person;
  • both persons are controlled by a third person;
  • both persons are under common control; or
  • each person is controlled by a third person and the third person by whom one person is controlled is affiliated with the third person by whom the other person is controlled;
• indicia of control, whether direct or indirect, exercised or not, include, but are not limited to, common ownership, common management, identity of interests (often found in members of the same family), shared facilities and equipment or common use of employees;
• an affiliate may also exist in instances of an amalgamation or merger. Where at any time two or more corporations (in this provision referred to as the “predecessors”) amalgamate or merge to form a new corporation, the new corporation and any predecessor are deemed to have been affiliated with each other where they would have been affiliated with each other immediately before that time if,
  • the new corporation had existed immediately before that time; and
  • the persons who were the shareholders of the new corporation immediately after that time had been the shareholders of the new corporation immediately before that time.

"contracting authority"

includes real property authority.

"control"

means

• direct control, such as where:
  • a person controls a body corporate if securities of the body corporate to which are attached more than 50 per cent of the votes that may be cast to elect directors of the body corporate are beneficially owned by the person and the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate;
  • a person controls a corporation that is organized on a cooperative basis if the person and all of the entities controlled by the person have the right to exercise more than 50 per cent of the votes that may be cast at an annual meeting or to elect the majority of the directors of the corporation;
  • a person controls an unincorporated entity, other than a limited partnership, if more than 50 per cent of the ownership interests, however designated, into which the entity is divided are beneficially owned by that person and the person is able to direct the business and affairs of the entity;
  • the general partner of a limited partnership controls the limited partnership; and
  • a person controls an entity if the person has any direct or indirect influence that, if exercised, would result in control in fact of the entity.
•  deemed control, such as where:
  1. A person who controls an entity is deemed to control any entity that is controlled, or deemed to be controlled, by the entity
• indirect control, such as where a person is deemed to control, within the meaning of paragraph (a) or (b), an entity where the aggregate of
  1. any securities of the entity that are beneficially owned by that person, and
  2. any securities of the entity that are beneficially owned by any entity controlled by that person

  is such that, if that person and all of the entities referred to in paragraph (c)(ii) that beneficially own securities of the entity were one person, that person would control the entity.

"derivatives agreement"

means a financial agreement whose obligations are derived from, referenced to, or based on, one or more underlying reference items such as interest rates, indices, currencies, commodities, securities or other ownership interests, credit or guarantee obligations, debt securities, climatic variables, bandwidth, freight rates, emission rights, real property indices and inflation or other macroeconomic data and includes

1. a contract for differences or a swap, including a total return swap, price return swap, default swap or basis swap;
2. a futures agreement;
3. a cap, collar, floor or spread;
4. an option; and
5. a spot or forward.

"federal immovable"

means an immovable belonging to Canada, and includes an immovable of which Canada has the power to dispose.

"federal real property"

means any real property belonging to Canada, and includes any real property of which Canada has the power to dispose.

"financial contract"

includes

• a derivatives agreement, whether settled by payment or delivery, that
  1. trades on a futures or options exchange or board, or other regulated market, or
  2. is the subject of recurrent dealings in the derivatives markets or in the over-the-counter securities or commodities markets;
• an agreement to
  1. borrow or lend securities or commodities, including an agreement to transfer securities or commodities under which the borrower may repay the loan with other securities or commodities, cash or cash equivalents,
  2. clear or settle securities, futures, options or derivatives transactions, or
  3. act as a depository for securities;
• a repurchase, reverse repurchase or buy-sell back agreement with respect to securities or commodities;
• a margin loan in so far as it is in respect of a securities account or futures account maintained by a financial intermediary;
• any combination of agreements referred to in any of paragraphs (a) to (d);
• a master agreement in so far as it is in respect of an agreement referred to in any of paragraphs (a) to (e);
• a master agreement in so far as it is in respect of a master agreement referred to in paragraph (f);
• a guarantee of, or an indemnity or reimbursement obligation with respect to, the liabilities under an agreement referred to in any of paragraphs (a) to (g); and
• an agreement relating to financial collateral, including any form of security or security interest in collateral and a title transfer credit support agreement, with respect to an agreement referred to in any of paragraphs (a) to (h).

"immovable"

means

1. in the Province of Quebec, an immovable within the meaning of the civil law of the Province of Quebec, and includes the rights of a lessee in respect of such an immovable, and
2. in jurisdictions outside Canada, any property that is an immovable within the meaning of the civil law of the Province of Quebec, and includes the rights of a lessee in respect of any such property;

"Ineligibility and Suspension List"

is a public list of companies that have been determined to be ineligible or suspended by PWGSC under the policy.

"Integrity Database"

is a list to be maintained by PWGSC that records all determinations of ineligibility and suspension, including companies and individuals, and the period of ineligibility that applies to that supplier.

"insurance contract"

means

• a policy or contract of insurance (other than a warranty in respect of the quality, fitness or performance of tangible property, where the warranty is supplied to a person who acquires the property otherwise than for resale) that is issued by an insurer, including
  • a policy of reinsurance issued by an insurer,
  • an annuity contract issued by an insurer, or a contract issued by an insurer that would be an annuity contract except that the payments under the contract
    • are payable on a periodic basis at intervals that are longer or shorter than one year, or
    • vary in amount depending on the value of a specific group of assets or on changes in interest rates, and
  • a contract issued by an insurer for all or part of the insurer’s reserves which vary in amount depending on the value of a specified group of assets, and
• a policy or contract in the nature of accident and sickness insurance, whether the policy is issued, or the contract is entered into, by an insurer.

"intra-governmental agreement"

means an agreement that involves or is made between different departments, agencies or other federal entities of the Government of Canada.

"inter-governmental agreement"

means an agreement that involves or is made between Canada and one or more governments, including but not limited to foreign states, provincial, territorial and municipal governments or provincial or municipal crown corporations, or an agreement between one or more governments to which Canada has declared itself to be bound.

"licence"

means any right to use or occupy real property or an immovable, other than

1. a real right within the meaning of the civil law of the Province of Quebec and the rights of a lessee under a lease of an immovable, and
2. an interest in land;

"Notice of Ineligibility and Notice of Suspension"

is a record of an administrative decision by PWGSC to declare ineligible or suspended, respectively, a supplier from award of a contract or real property agreement for a specific period of time.

"Notice of Intention to Declare Ineligible and Notice of Intention to Suspend"

is a Notice sent by PWGSC informing a supplier that it is being reviewed for a potential determination of ineligibility or suspension, respectively.

"person"

includes, but is not limited to individuals, organizations, bodies corporate, societies, companies, firms, partnerships, and associations of persons;

"procurement process"

including solicitation, invitation to tender, request for proposals, request for quotations and invitation to offer, means:

1. as it relates to goods and services, a series of public actions or steps taken by PWGSC, or any other government department, agency or other federal entity, and which are directed at acquiring goods or services, either through a competitive public process or a sole source process, where permissible, and which result in binding obligations on a supplier or suppliers of goods or services, but does not include activities occurring after an award has been made, such as contract administration or contract management; 
2. as it relates real property agreements or transactions, a series of public actions or steps taken by PWGSC, or any other government department, agency or other federal entity, and which are directed at concluding: (i) a disposition or lease of federal real property or federal immovables; (ii) a grant or concessions of federal real property or federal immovables; (iii) an acquisition or lease of real property or immovables; (iv) a licence or transfer in relation to any licence acquired or given by Her Majesty in respect of federal real property or federal immovables. The term does not include any transaction or solicitation occurring after an award decision has been made such as administration or management; and 
3. as it relates to “construction contract”, means a series of public actions or steps taken by PWGSC, or any other government department, agency or other federal entity, and which are directed at concluding a contract entered into for the construction, repair, renovation or restoration of any work except a vessel and includes (i)a contract for the supply and erection of a prefabricated structure, (ii)a contract for dredging, (iii)a contract for demolition, or (iv)a contract for the hire of equipment to be used in or incidentally to the execution of any contract referred to in this definition.

"real property"

means land in any province other than Quebec, and land outside Canada, including mines and minerals, and buildings, structures, improvements and other fixtures on, above or below the surface of the land, and includes an interest therein. The term is to be given the meaning ascribed to it in the Federal Real Property and Federal Immovables Act.

"real property agreement"

includes offer to purchase, offer to sale, agreement of purchase and sale, leases and licences.

"representative"

in respect of an organization, means a director, partner, employee, member, agent or contractor of the organization.

"senior officer"

means a representative who plays an important role in the establishment of an organization’s policies or is responsible for managing an important aspect of the organization’s activities and, in the case of a body corporate, includes a director, its chief executive officer and its chief financial officer.

"service contract"

means a contract for the provision of a service but does not include an agreement whereby a person is employed as an officer, clerk or employee of Canada.

"subcontract"

includes a subtenancy and sublease.

"subcontractor"

includes a subtenant and sublessee.

"supplier"

means any person that:

1. submits a bid/offer for, or is awarded, or reasonably may be expected to submit a bid/offer for or be awarded, a contract or real property agreement with Canada;
2. conducts or wishes to conduct business with Canada as a vendor, lessor, optionor, licensor, purchaser, tenant or contractor; or
3. conducts business with Canada as an agent or representative of another supplier,

where the policy applies.

"supply contract"

means a contract for the purchase of articles, commodities, equipment, goods, materials or supplies and includes

1. a contract for printing or for the reproduction of printed matter, and
2. a contract for the construction or repair of a vessel.

"transaction value"

is the actual value of a contract, subcontract or real property agreement or, when unestablished, the maximum potential value of a contract, subcontract or real property agreement or of all contracts to be issued under a standing offer or supply arrangement, as estimated by Canada. Transaction value is stated in Canadian currency, or the equivalent value of the currency of a country other than Canada, and includes all options and applicable taxes. Transaction value is used for purposes only of determining application of the policy and does not imply that monies will be spent beyond a firm contractual commitment or that any option will be exercised. Where a Financial Limitation clause is used, the transaction value is that value.

"transfer payment"

is a monetary payment, or a transfer of goods, services or assets made, on the basis of an appropriation, to a third party, including a Crown corporation, that does not result in the acquisition by Canada of any goods, services or assets. Transfer payments do not include investments, loans or guarantees. Transfer payments are categorized as:

1. grants, which are transfer payments subject to pre-established eligibility and other entitlement criteria. A grant is not subject to being accounted for by a recipient nor normally subject to audit by the department. The recipient may be required to report on results achieved;
2. contributions, which are transfer payments subject to performance conditions in a funding agreement. A funding agreement is a written agreement or instrument constituting an agreement between Canada and an applicant or a recipient setting out the obligations or understandings of both with respect to one or more transfer payments; or
3. other transfer payments, which are transfer payments, other than a grant or contribution, based on legislation or other arrangement, which may be determined by a formula.