Federal Contractors Program – Construction industry – IPG-084

Effective Date: June 2017

1. Subject

Exclusion of construction contracts from the Federal Contractors Program (FCP).

2. Issue

The purpose of this guideline is to clarify the conditions which would result in an exemption from the FCP.

3. Definitions

Construction contracts in the federal government are defined in section 2 of the Government Contracts Regulations:

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

  1. a contract for the supply and erection of a prefabricated structure,
  2. a contract for dredging,
  3. a contract for demolition, or
  4. a contract for the hire of equipment to be used in or incidentally to the execution of any contract referred to in this definition.

Public Service and Procurement Canada (PSPC)Footnote 1 assigns the contract code number “51” to any contract in which content is at least 51 percent construction. PSPC’s standard to determine which contracts and the amount of work that are considered as “construction” is based on the definition of “construction contracts” provided in the Government Contracts Regulations.

Under code number “23” of the North American Industry Classification System (NAICS) of 2007, the construction sector comprises establishments primarily engaged in constructing, repairing and renovating buildings, subdividing and developing land, and engineering works. The sector includes establishments involved in such diversified work as construction of new structures, repairs and renovations, engineering, architectural work and project design, and supervision and management of construction projects

4. Policy

Appendix D of the Treasury Board’s Contracting Policy specifies that the FCP does not apply to construction contracts.

Exclusion of construction contracts from the FCP is based on various factors related to the specific nature of the construction industry. To determine whether or not a contractor is subject to the FCP, both the nature of the contract, as defined by PSPC, and the nature of the establishment, as defined under the NAICS, are to be considered.

A contractor being awarded a federal contract of at least $1M (including applicable taxes) who has at least 100 permanent full-time and/or permanent part-time employees and who is provincially regulated is not subject to FCP if:

  • PSPC has determined the contract to be at least 51 percent construction-based and has assigned the contract the code number “51”; and/or
  • the contractor bidding for the contract has been identified as a construction establishment with NAICS code number “23”.

Chantal Roy
Director General
Federal Programs Directorate
Employment and Social Development Canada – Labour Program

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