ARCHIVED – Superseded – General Terms and Conditions – Low Complexity Goods and Services Contracts
- A1 Interpretation
- A2 Standard Clauses and Conditions
- A3 Status of the Contractor
- A4 Condition of Material
- A5 Inspection, Acceptance and Warranty
- A6 Invoice Submission
- A7 Taxes
- A8 Transportation Costs
- A9 Shipment Documentation
- A10 Period of Payment
- A11 Interest on Overdue Accounts
- A12 Audit
- A13 Compliance with Applicable Laws
- A14 Time of the Essence
- A15 Ownership
- A16 Government Property
- A17 Amendment and Assignment
- A18 Default by the Contractor
- A19 Termination for Convenience
- A20 Right of Set-off
- A21 Conflict of Interest and Values and Ethics Codes or the Public Service
- A22 Contingency Fees
- A23 International Sanctions
- A24 Code of Conduct for Procurement
- A25 Entire Agreement
- A26 Indemnification
- A27 Security and Protection of the Work
- A28 End of Fiscal Year
- A29 Suspension of the Work
- A30 Transportation Carriers' Liability
In the Contract, unless the context otherwise requires:
"Articles of Agreement" means the clauses and conditions set out in full text or incorporated by reference from the Standard Acquisition Clauses and Conditions Manual to form the body of the Contract; it does not include these general conditions, any supplemental general conditions, annexes/appendices, the Contractor's bid or any other document.
"Canada", "Crown", "Her Majesty" or "the Government" means Her Majesty the Queen in right of Canada as represented by the Minister of Foreign Affairs represented by a duly authorized agent of Passport Canada and any other person duly authorized to act on behalf of that minister;
"Contract" means the Articles of Agreement, these general conditions and any other document specified or referred to as forming part of the Contract, all as amended by agreement of the Parties from time to time;
"Contracting Authority" means the person designated by that title in the Contract, or by notice to the Contractor, to act as Canada's representative to manage the Contract;
"Contractor" means the person, entity or entities named in the Contract to supply goods, services or both to Canada;
"Contract Price" means the amount stated in the Contract to be payable to the Contractor for the Work, exclusive of Goods and Services Tax and Harmonized Sales Tax;
"Government Property" means anything supplied to the Contractor by or on behalf of Canada for the purposes of performing the Contract and anything acquired by the Contractor in any manner in connection with the Work, the cost of which is paid by Canada under the Contract;
"Party" means Canada, the Contractor, or any other signatory to the Contract and "Parties" means all of them;
"Work" means all activities, services, goods, equipment, matters and things required to be done, delivered or performed by the Contractor under the Contract.
A2 Standard Clauses and Conditions
Pursuant to the Department of Public Works and Government Services Act, S.C. 1996, c.16, the clauses and conditions identified by number, date and title in the Contract are incorporated by reference and form part of the Contract as though expressly set out in the Contract.
A3 Status of the Contractor
The Contractor is as an independent Contractor engaged by Canada to perform the Work. Neither the Contractor nor any of its personnel is engaged as an employee, servant or agent of Canada. The Contractor is responsible for all deductions and remittances required by law in relation to its employees.
A4 Condition of Material
Unless provided otherwise in the Contract, material supplied must be new and conform to the latest issue of the applicable drawing, specification and part number that is in effect on the bid solicitation closing date or, if there was no bid solicitation, the date of the Contract.
A5 Inspection, Acceptance and Warranty
I The Contractor must perform the Work efficiently in accordance with standards of quality acceptable to Canada and in full conformity with all the requirements of the Contract.
All the Work is subject to inspection and acceptance by Canada. Despite inspection and acceptance of the Work by or on behalf of Canada and without restricting any provisions of the Contract or any condition, warranty or provision imposed by law, the Contractor, if requested by Canada to do so, must replace, repair or correct, at its own option and expense any work that becomes defective or fails to conform to the requirements of the Contract, where applicable. For goods, the warranty period will be twelve (12) months after delivery and acceptance of the Work or the length of the Contractor's or manufacturer's standard warranty period, whichever is longer.
Canada must pay the transportation cost associated with returning the Work or any part of the Work to the Contractor's plant for replacement, repair or making good, and the Contractor must pay the transportation cost associated with forwarding the replacement or returning the Work or part of the Work when rectified to the delivery point specified in the Contract or to another location as directed by Canada. If, in the opinion of Canada, it is not expedient to remove the Work from its location, the Contractor must carry out any necessary repair or making good of the Work at that location and will be reimbursed its reasonable travel and living expenses.
The warranty period is automatically extended by the duration of any period or periods where the Work is unavailable for use or cannot be used because of a defect or non-conformance during the original warranty period. The warranty applies to any part of the Work replaced, repaired or corrected pursuant to subsection 2, for the greater of:
the warranty period remaining, including the extension, or
ninety (90) days or such other period as may be specified for that purpose by agreement between the Parties.
A6 Invoice Submission
Invoices must be submitted in the Contractor's name. The Contractor must submit invoices for each delivery or shipment; invoices must only apply to the Contract. Each invoice must indicate whether it covers partial of final delivery.
Invoices must show:
the date, the name and address of the client department, item or reference numbers, deliverable and/or description of the Work, contract number, Client Reference Number (CRN), Procurement Business Number (PBN), and financial code(s);
details of expenditures in accordance with the Basis of Payment, exclusive of Goods and Services Tax (GST) or Harmonized Sales Tax (HST) (such as item, quantity, unit of issue, unit price, fixed time labour rates and level of effort, subcontracts, as applicable);
deduction for holdback, if applicable;
the extension of the totals, if applicable; and
if applicable, the method of shipment together with date, case numbers and part or reference numbers, shipment charges and any other additional charges.
If applicable, the GST or HST must be specified on all invoices as a separate item. All items that are zero-rated, exempt or to which the GST or HST does not apply, must be identified as such on all invoices.
By submitting an invoice, the Contractor certifies that the invoice is consistent with the Work delivered and is in accordance with the Contract.
Municipal Taxes are not applicable.
Excluding legislated exceptions, federal government departments and agencies are not required to pay any sales tax payable to the province in which the taxable goods or services are delivered. This exemption has been provided to federal government departments and agencies under the authority of one of the following:
Provincial Sales Tax (PST) Exemption License Numbers, for the provinces of:
Prince Edward Island OP-10000-250
British Columbia R005521
for Quebec, Saskatchewan, the Yukon Territory, the Northwest Territories and Nunavut, an Exemption Certificate, which certifies that the goods or services purchased are not subject to the provincial/ territorial sales and consumption taxes because they are purchased by the federal government with Canada funds for the use of the federal government.
Currently, in Alberta, the Yukon Territory, the Northwest Territories and Nunavut, there is no general PST. However, if a PST is introduced in Alberta, the Yukon Territory, the Northwest Territories or Nunavut, the sales tax exemption certificate would be required on the purchasing document.
Federal departments are required to pay the HST in the participating provinces of Newfoundland and Labrador, Nova Scotia and New Brunswick.
The Contractor is not exempt from paying PST under the above Exemption License Numbers or Exemption Certificate. The Contractor must pay the PST on taxable goods or services used or consumed in the performance of the Contract (in accordance with applicable provincial legislation), including material incorporated into real property.
Changes to Taxes and Duties
If there is any change to any tax or duty payable to any level of government in Canada after the bid submission date that affects the costs of the Work to the Contractor, the Contract Price will be adjusted to reflect the increase or decrease in the cost to the Contractor. However, there will be no adjustment for any change that increases the cost of the Work to the Contractor if public notice of the change was given before bid submission date in sufficient detail to have permitted the Contractor to calculate the effect of the change on its cost. There will be no adjustment if the change takes effect after the date required by the Contract for delivery of the Work.
GST or HST
The estimated GST or HST, if applicable, is included in the total estimated cost of the Contract. The GST or HST is not included in the Contract price but will be paid by Canada as provided in the Invoice Submission section above. The Contractor agrees to remit to Canada Revenue Agency any amounts of GST and HST paid or due.
Tax Withholding of 15 Percent
Pursuant to the Income Tax Act, 1985, c. 1 (5th Supp.) and the Income Tax Regulations, Canada must withhold 15 percent of the amount to be paid to the Contractor in respect of services provided in Canada if the Contractor is a non-resident unless the Contractor obtains a valid waiver. The amount withheld will be held on account for the Contractor in respect to any tax liability which may be owed to Canada.
A8 Transportation Costs
If transportation costs are payable by Canada under the Contract and the Contractor makes the transportation arrangements, shipments must be made by the most direct and economical means consistent with normal shipping practice. The costs must be shown as a separate item on the invoice.
A9 Shipment Documentation
For the shipment of goods, the transportation bill of lading must accompany the original invoice, except for "collect" shipments (if and when stipulated), in which event it must accompany the shipment. In addition, a packing slip must accompany each shipment, showing item, quantity, part or reference numbers, description of the goods and contract number, including the CRN and PBN. If the goods have been inspected at the Contractor's plant, the signed inspection voucher must be attached to the packing slip normally enclosed in the packing note envelope.
A10 Period of Payment
Canada's standard payment period is thirty (30) days. The payment period is measured from the date an invoice in acceptable form and content is received in accordance with the Contract or the date the Work is delivered in acceptable condition as required in the Contract, whichever is later. A payment is considered overdue on the 31st day following that date and interest will be paid automatically in accordance with section 11.
If the content of the invoice and its substantiating documentation are not in accordance with the Contract or the Work is not in acceptable condition, Canada will notify the Contractor within fifteen (15) days of receipt. The 30-day payment period begins upon receipt of the revised invoice or the replacement or corrected Work. Failure by Canada to notify the Contractor within fifteen (15) days will only result in the date specified in subsection 1 to apply for the sole purpose of calculating interest on overdue accounts.
A11 Interest on Overdue Accounts
For the purposes of this section:
"Average Rate" means the simple arithmetic mean of the Bank Rates in effect at 4:00 p.m. Eastern Time each day during the calendar month which immediately before the calendar month in which payment is made;
"Bank Rate" means the rate of interest established from time to time by the Bank of Canada as the minimum rate at which the Bank of Canada makes short term advances to members of the Canadian Payments Association;
"date of payment" means the date of the negotiable instrument drawn by the Receiver General for Canada to pay any amount under the Contract;
an amount becomes "overdue" when it is unpaid on the first day following the day on which it is due and payable according to the Contract.
Canada will pay the Contractor simple interest at the Average Rate plus 3 percent per year on any amount that is overdue, from the date that amount becomes overdue until the day before the date of payment, inclusive. The Contractor is not required to provide notice to Canada for interest to be payable.
Canada will pay interest in accordance with this section only if Canada is responsible for the delay in paying the Contractor. Canada will not pay interest on overdue advance payments.
The amount claimed under the Contract is subject to government audit both before and after payment is made. The Contractor must keep proper accounts and records of the cost of performing the Work and keep all documents relating to such cost for six (6) years after it receives the final payment under the Contract.
A13 Compliance with Applicable Laws
The Contractor must comply with all laws applicable to the performance of the Contract. The Contractor must provide evidence of compliance with such laws to Canada at such times as Canada may reasonably request.
The Contractor must obtain and maintain at its own costs all permits, licences, regulatory approvals and certificates required to perform the Work. If requested by the Contracting Authority, the Contractor must provide a copy of any required permit, licence, regulatory approvals or certificate to Canada.
A14 Time of the Essence
It is essential the Work be delivered within or at the time stated in the Contract.
Unless provided otherwise in the Contract, the Work or part of the Work belongs to Canada after delivery and acceptance by or on behalf of Canada. Despite any transfer of ownership, the Contractor is responsible for any loss or damage to the Work or any part of the Work until it is delivered to Canada in accordance with the Contract.
A16 Government Property
The Contractor must take reasonable and proper care of all Government Property while it is in its possession or subject to its control. The Contractor is responsible for any loss or damage resulting from its failure to do so other than loss or damage caused by ordinary wear and tear.
A17 Amendment and Assignment
The Contract must not be amended or assigned, in whole or in part, without the prior written agreement of the Parties.
A18 Default by the Contractor
If the Contractor is in default in carrying out any of its obligations under the Contract, or is bankrupt or insolvent or in receivership, the Contracting Authority may, by giving written notice to the Contractor, terminate for default the Contract or part of the Contract. Upon the giving of such notice, the Contractor will have no claim for further payment and remains liable to Canada for all losses and damages suffered by Canada because of the default, including any increase in the cost incurred by Canada in procuring the Work from another source.
A19 Termination for Convenience
At any time before the completion of the Work, the Contracting Authority may, by giving notice to the Contractor, terminate for convenience the Contract or part of the Contract. In such case, the Contractor will be paid for Work that has been performed, accepted and unpaid in accordance with the Contract price. The Contractor will be entitled to be reimbursed the actual costs reasonably and properly incurred as a direct result of the termination, but in no case such reimbursement must exceed the Contract price. The Contractor will have no claim for damages, compensation, loss of profit or otherwise, except as provided in this section.
A20 Right of Set-off
Without restricting any right of set-off given by law, Canada may set-off against any amount payable to the Contractor under the Contract, any amount payable to Canada by the Contractor under the Contract or under any other current contract. Canada may, when making a payment pursuant to the Contract, deduct from the amount payable to the Contractor any such amount payable to Canada by the Contractor which, by virtue of the right of set-off, may be retained by Canada.
A21 Conflict of Interest and Values and Ethics Codes or the Public Service
The Contractor acknowledges that individuals who are subject to the provisions of the Conflict of Interest Act, 2006, c. 9, s. 2, the Conflict of Interest Code for Members of the House of Commons, the Values and Ethics Code for the Public Service or all other codes of values and ethics applicable within specific organizations cannot derive any direct benefit resulting from the Contract.
A22 Contingency Fees
The Contractor certifies that it has not, directly or indirectly, paid or agreed to pay and agrees that it will not, directly or indirectly, pay a contingency fee for the solicitation, negotiation or obtaining of the Contract to any person, other than an employee of the Contractor acting in the normal course of the employee's duties. In this section, "contingency fee" means any payment or other compensation that depends or is calculated based on a degree of success in soliciting, negotiating or obtaining the Contract and "person" includes any individual who is required to file a return with the registrar pursuant to section 5 of the Lobbying Act, 1985, c. 44 (4th Supplement).
A23 International Sanctions
Persons in Canada, and Canadians outside of Canada, are bound by economic sanctions imposed by Canada. As a result, the Government of Canada cannot accept delivery of goods or services that originate, either directly or indirectly, from the countries or persons subject to economic sanctions.
Details on existing sanctions can be found at: http://www.dfait-maeci.gc.ca/trade/sanctions-en.asp
The Contractor must not supply to the Government of Canada any goods or services which are subject to economic sanctions.
The Contractor must comply with changes to the regulations imposed during the period of the Contract. The Contractor must immediately advise Canada if it is unable to perform the Work as a result of the imposition of economic sanctions against a country or person or the addition of a good or service to the list of sanctioned goods or services. If the Parties cannot agree on a work around plan, the Contract will be terminated for the convenience of Canada in accordance with section 19.
A24 Code of Conduct for Procurement
The Contractor certifies that it has read the Code of Conduct for Procurement (http://www.tpsgc-pwgsc.gc.ca/app-acq/cndt-cndct/index-eng.html) and agrees to be bound by its terms.
A25 Entire Agreement
The Contract constitutes the entire and sole agreement between the Parties.
The Contractor shall indemnify and save harmless the Minister, the Department of Foreign Affairs and International Trade and Passport Canada from and against all claims, losses, damages, costs, expenses, Actions and other proceedings, made, sustained, brought, prosecuted, threatened to be brought or prosecuted, in any manner based upon, occasioned by or attributable to any injury to or death of a person or damage to or loss of property arising from any wilful or negligent act, omission or delay on the part of the Contractor, the Contractor's servants or agents in performing the work or as a result of the work.
The Contractor shall indemnify the Minister, the Department of Foreign Affairs and International Trade and Passport Canada for all costs, charges and expenses whatsoever that the Minister of the invention claimed in a patent, or infringement or alleged infringement of any patent or any registered industrial design or an copyright resulting from the performance of the Contractor's obligations under the contract, and in respect of the use of or disposal by the Minister of anything furnished pursuant to the contract.
The Contractor's liability to indemnify or reimburse the Minister under the contract shall not affect or prejudice the Minister from exercising any other rights under law.
A27 Security and Protection of the Work
Notwithstanding the Validity Date of the contract, it is a precondition of the contract that the Contractor have a Security Clearance at the level designated for work assignment. The Contractor shall take all reasonable steps necessary to ensure that its performance of the work, in accordance with the provisions of the contract, adheres to all requirements of this Security Clearance level. The Minister may, at any time, conduct an examination of the Contractor's premises, documents and records to verify whether the Contractor is complying with the security requirements of the contract.
A28 End of Fiscal Year
Notwithstanding the Payment Schedule, each year on or about March 31, the Contractor will, at the request of the Project Authority, submit an end-of-the-year invoice corresponding to the value of the total work performed during the year preceding that date less any amounts previously paid or invoiced during such year.
All subsequent payment(s) payable pursuant to the Payment Schedule contained in the contract will be reduced by any amount which could have been paid pursuant to this clause.
A29 Suspension of the Work
The Contracting Authority may at any time, by written notice, order the Contractor to suspend or stop the Work or part of the Work under the Contract for a period of up to one hundred eighty (180) days. The Contractor must immediately comply with any such order in a way that minimizes the cost of doing so. While such an order is in effect, the Contractor must not remove any part of the Work from any premises without first obtaining the written consent of the Contracting Authority. Within these one hundred eighty (180) days, the Contracting Authority must either cancel the order or terminate the Contract, in whole or in part, under section 38 or section 39.
When an order is made under subsection 1, unless the Contracting Authority terminates the Contract by reason of default by the Contractor or the Contractor abandons the Contract, the Contractor will be entitled to be paid its additional costs incurred as a result of the suspension plus a fair and reasonable profit.
When an order made under subsection 1 is cancelled, the Contractor must resume work in accordance with the Contract as soon as practicable. If the suspension has affected the Contractor's ability to meet any delivery date under the Contract, the date for performing the part of the Work affected by the suspension will be extended for a period equal to the period of suspension plus a period, if any, that in the opinion of the Contracting Authority, following consultation with the Contractor, is necessary for the Contractor to resume the Work. Any equitable adjustments will be made as necessary to any affected conditions of the Contract.
A30 Transportation Carriers' Liability
The federal government's policy of underwriting its own risks precludes payment of insurance or valuation charges for transportation beyond the point at which ownership of goods passes to the federal government (determined by the FOB point or Incoterms). Where increased carrier liability is available without charge, the Contractor must obtain the increased liability for shipment.
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