Government Contracts Regulations

Link to law: http://laws-lois.justice.gc.ca/eng/regulations/SOR-87-402/FullText.html

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Government Contracts Regulations

SOR/87-402FINANCIAL ADMINISTRATION ACT
Registration 1987-06-30
Regulations Respecting Government Contracts
P.C. 1987-1355 1987-06-30Her Excellency the Governor General in Council, on the recommendation of the Treasury Board, pursuant to subsection 34(1)Footnote * of the Financial Administration Act, is pleased hereby to revoke the Government Contracts Regulations, C.R.C., c. 701, and to make the annexed Regulations respecting government contracts in substitution therefor.
Return to footnote *S.C. 1984, c. 31, s. 7(1)Short Title

1 These Regulations may be cited as the Government Contracts Regulations.

Interpretation

2 In these Regulations,

advance payment
advance payment means 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; (paiement anticipé)
approved financial institution

approved financial institution means

(a) any corporation or institution that is a member of the Canadian Payments Association,
(b) a corporation that accepts deposits that are insured by the Canada Deposit Insurance Corporation or the Régie de l’assurance-dépôts du Québec to the maximum permitted by law,
(c) a credit union as defined in paragraph 137(6)(b) of the Income Tax Act,
(d) a corporation that accepts deposits from the public, if repayment of the deposit is guaranteed by Her Majesty in right of a province, or
(e) the Canada Post Corporation; (institution financière agréée)

bid
bid[Repealed, SOR/91-651, s. 1]
bid bond
bid bond means a bond given by a person to guarantee entry into a contract if the contract is awarded to that person; (cautionnement de soumission)
bid security
bid security means a bid bond or a security deposit given by a person to Her Majesty to guarantee entry into a contract if the contract is awarded to that person; (garantie de soumission)
construction contract

construction contract means a contract entered into for the construction, repair, renovation or restoration of any work except a vessel and includes

(a) a contract for the supply and erection of a prefabricated structure,
(b) a contract for dredging,
(c) a contract for demolition, or
(d) a contract for the hire of equipment to be used in or incidentally to the execution of any contract referred to in this definition; (marché de travaux publics)

contract
contract[Repealed, SOR/2011-197, s. 1]
contract security

contract security means

(a) a payment bond or a performance bond given on behalf of a person to Her Majesty to make good on any default by that person under the contract by

(i) compensating Her Majesty therefor, or
(ii) completing the performance of the contract to the extent required by the terms and conditions of the payment bond or performance bond, or

(b) a security deposit given by the person to Her Majesty to secure the performance of the contract to the extent required by the terms and conditions of the contract; (garantie contractuelle)

contracting authority

contracting authority means

(a) the appropriate Minister, as defined in paragraph (a), (a.1) or (b) of the definition appropriate Minister in section 2 of the Financial Administration Act;
(b) a department within the meaning of paragraph (a.1) of the definition of department in section 2 of the Financial Administration Act that has the legal authority to enter into a contract;
(c) a departmental corporation named in Schedule II to the Financial Administration Act;
(d) any individual — other than a commissioner appointed under the Inquiries Act and any individual authorized under the Parliament of Canada Act to enter into a contract — who is authorized by or under an Act of Parliament to enter into a contract. (autorité contractante)

goods contract

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

(a) a contract for printing or for the reproduction of printed matter, and
(b) a contract for the construction or repair of a vessel; (marché de fournitures)

government guaranteed bond

government guaranteed bond means a bond of the Government of Canada or a bond unconditionally guaranteed as to principal and interest by the Government of Canada that is

(a) payable to the bearer,
(b) accompanied by a duly executed instrument of transfer of the bond to the Receiver General in the form prescribed by the Domestic Bonds of Canada Regulations, or
(c) registered in the name of the Receiver General; (obligation garantie par le gouvernement)

lease
lease[Repealed, SOR/92-503, s. 1]
payment bond
payment bond means a bond given by a person to guarantee the payment for labour to be given or materials to be supplied in connection with a contract awarded to that person; (cautionnement de paiement)
performance bond
performance bond means a bond given by a person to guarantee the performance of a contract awarded to that person; (cautionnement d’exécution)
progress payment
progress payment means a payment made by or on behalf of Her Majesty 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; (acompte)
security deposit

security deposit means

(a) a bill of exchange

(i) that is payable to the Receiver General, and
(ii) that is certified by an approved financial institution or drawn by an approved financial institution on itself,

(b) a government guaranteed bond, or
(c) such other security as may be deemed appropriate by the contracting authority and approved by the Treasury Board; (dépôt de garantie)

service contract
service contract means a contract for the provision of service but does not include an agreement whereby a person is employed as an officer, clerk or employee of Her Majesty; (marché de services)
suppliers’ list
suppliers’ list means a list that is maintained by the contracting authority setting out the names and addresses of suppliers from whom the contracting authority may solicit bids. (liste de fournisseurs)

SOR/91-651, s. 1;
SOR/92-503, s. 1;
SOR/96-472, s. 1;
SOR/2011-197, s. 1.

Previous Version

Application

3 (1) These Regulations apply to all goods, service and construction contracts that are entered into by a contracting authority and that provide for the payment of any money by Her Majesty, except

(a) a contract entered into by the National Film Board;
(b) a contract for the construction of buildings entered into under the Veterans’ Land Act;
(c) a contract entered into under the Indian Act that involves  Indian moneys as defined in that Act;
(d) a contract for the performance of legal services;
(e) a contract for the fit-up of an office or a residential accommodation if the contract for fit-up is part of a transaction authorized pursuant to the Federal Real Property and Federal Immovables Act or the regulations made under it;
(f) arrangements entered into under an Interchange Canada Agreement; or
(g) a contract whose purpose is, for operational reasons, to fulfil an interim requirement for defence supplies or services or to ensure defence logistical capabilities on an interim basis, and any related contract.

(2) Despite paragraph (1)(d), section 4 applies to a contract referred to in that section.
(3) Despite subsection (1), section 18 applies to any contract referred to in that subsection.

SOR/91-651, s. 2;
SOR/92-503, s. 2;
SOR/96-472, s. 2;
SOR/2011-197, s. 2;
SOR/2015-173, s. 1.

Previous Version

PART I Conditions of Contract Entry

Legal Services

4 (1) Contracts for the performance of legal services may be entered into only by or under the authority of the Minister of Justice.
(2) Subsection (1) does not apply in respect of a contracting authority referred to in the schedule.

SOR/2011-197, ss. 3, 6(F).
Previous Version

Bids

5 Before any contract is entered into, the contracting authority shall solicit bids therefor in the manner prescribed by section 7.

6 Notwithstanding section 5, a contracting authority may enter into a contract without soliciting bids where

(a) the need is one of pressing emergency in which delay would be injurious to the public interest;

(b) the estimated expenditure does not exceed

(i) $25,000,
(ii) $100,000, where the contract is for the acquisition of architectural, engineering and other services required in respect of the planning, design, preparation or supervision of the construction, repair, renovation or restoration of a work, or
(iii) $100,000, where the contract is to be entered into by the member of the Queen’s Privy Council for Canada responsible for the Canadian International Development Agency and is for the acquisition of architectural, engineering or other services required in respect of the planning, design, preparation or supervision of an international development assistance program or project;

(c) the nature of the work is such that it would not be in the public interest to solicit bids; or
(d) only one person is capable of performing the contract.

SOR/96-472, s. 3.

6.1 [Repealed, SOR/2005-298, s. 1]

7 A contracting authority shall solicit bids by

(a) giving public notice, in a manner consistent with generally accepted trade practices, of a call for bids respecting a proposed contract; or
(b) inviting bids on a proposed contract from suppliers on the suppliers’ list.

SOR/91-651, s. 3.

Advance Payments

8 (1) Subject to subsection (2), any contracting authority may enter into a contract that provides for the making of advance payments.
(2) Where the approval of the Treasury Board is required for entry into a contract, the amounts and the times of the advance payments shall be approved by the Treasury Board.

Progress Payments

9 Any contracting authority may enter into a contract that provides for the making of progress payments.

PART II Security

10 Where a contracting authority requires a person to give to Her Majesty bid security or contract security, that security shall be dealt with in the manner set out in this Part.

11 No security deposit in the form of government guaranteed bonds with coupons attached thereto shall be accepted by a contracting authority unless all coupons that are unmatured at the time that the bonds are submitted are attached to the bonds.

12 A contracting authority shall hold any bid bond, payment bond, performance bond or non-negotiable security deposit that is received by the authority until the terms of the security are fulfilled.

13 (1) Where a negotiable security deposit is received by a contracting authority as bid security, the contracting authority shall hold that security deposit until it can be disposed of in accordance with subsection (2) or (3).

(2) Where a bid is accepted and contract security is required to be provided,

(a) the contracting authority shall continue to hold the security deposit referred to in subsection (1) until the contract security is provided; and
(b) when the contract security is provided, the contracting authority shall return the security deposit referred to in subsection (1) to the person from whom it was received unless it forms part of the contract security, in which case it shall be retained as contract security.

(3) Where a bid is rejected, or is accepted but contract security is not required, the contracting authority shall return the security deposit referred to in subsection (1) to the person from whom it was received.

14 Where a bill of exchange is received by a contracting authority as contract security or is retained by a contracting authority pursuant to paragraph 13(2)(b), the contracting authority shall immediately deposit the amount of the bill of exchange in the Consolidated Revenue Fund.

15 Where a negotiable security deposit other than a bill of exchange is received by a contracting authority as contract security or is retained by a contracting authority pursuant to paragraph 13(2)(b), the contracting authority shall

(a) hold the contract security in a place adequate for the safekeeping of the security; or
(b) immediately forward the contract security to the Receiver General for safekeeping.

16 Where a negotiable security deposit has been received by a contracting authority in respect of a contract and the contract has been

(a) satisfactorily performed, or
(b) terminated for a reason that is not attributable to any fault of the contractor,

and Her Majesty has no claim against the contractor arising out of the contract or relating in any manner to the contract, the contracting authority shall return that security deposit to the contractor.

17 Where a security deposit in the form of a government guaranteed bond has unmatured coupons attached to it at the time it is submitted, the contracting authority or the Receiver General, as the case may be, shall return any matured coupons in excess of the security deposit requirement to the person from whom the security deposit was received, if that person so requests.

PART III Deemed Terms

18 (1) The following terms are deemed to be expressly set out in every construction, goods or service contract that provides for the payment of any money by Her Majesty:

(a) the contractor declares that the contractor has not, directly or indirectly, paid or agreed to pay, and will not, directly or indirectly, pay a contingency fee to any individual for the solicitation, negotiation or obtaining of the contract if the payment of the fee would require the individual to file a return under section 5 of the Lobbying Act;
(b) all accounts and records relating to any payment by the contractor of fees or other compensation for the solicitation, negotiation or obtaining of the contract shall be subject to any accounting and auditing provisions of the contract;
(c) the contractor declares that the contractor has not been convicted of an offence, other than an offence for which a pardon has been granted, under section 121, 124 or 418 of the Criminal Code;
(d) the contractor consents, in the case of a contract that has a value in excess of $10,000, to the public disclosure of basic information — other than information described in any of paragraphs 20(1)(a) to (d) of the Access to Information Act — relating to the contract; and
(e) if the contractor makes a false declaration under paragraph (a) or (c) or fails to comply with the terms set out in paragraph (b) or (d), it is an act of default under the contract and the contractor agrees, in addition to any other remedies that may be available against the contractor, to immediately return any advance payments and agrees that the contracting authority may terminate the contract.

(2) The following terms are deemed to be expressly set out in every bid solicitation for a construction, goods or service contract that provides for the payment of any money by Her Majesty:

(a) the bidder declares that the bidder has not, directly or indirectly, paid or agreed to pay, and will not, directly or indirectly, pay, a contingency fee to any individual for the solicitation, negotiation or obtaining of the contract if the payment of the fee would require the individual to file a return under section 5 of the Lobbying Act; and
(b) the bidder declares that the bidder has not been convicted of an offence referred to in paragraph (1)(c), other than an offence for which a pardon has been granted.

SOR/2011-197, s. 4.

SCHEDULE(Subsection 4(2))Contracting Authorities Exempted from Section 4

The Auditor General of Canada
Le vérificateur général du Canada

The Chief Electoral Officer of Canada
Le directeur général des élections

The Commissioner of Lobbying
Le commissaire au lobbying

The Commissioner of Official Languages
Le commissaire aux langues officielles

The Commissioner of the Communications Security Establishment
Le commissaire du Centre de la sécurité des télécommunications

The Director of Public Prosecutions
Le directeur des poursuites pénales

The Information Commissioner of Canada
Le commissaire à l’information du Canada

The Privacy Commissioner of Canada
Le commissaire à la vie privée du Canada

The Public Sector Integrity Commissioner of Canada
Le commissaire à l’intégrité du secteur public

SOR/2011-197, s. 5.
Previous Version