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Proposed draft: Ineligibility and Suspension Policy for consultation

Note

This consultation closed on November 13, 2018 (11:59 p.m. Pacific Time).

This proposed draft policy was used for the purpose of the consultation: Administering Canada's expanded Integrity Regime held from October 11, 2018 to November 13, 2018.

The Government of Canada was seeking comments/feedback on the application of the proposed draft policy and any of its requirements. Feedback provided through the consultation is taken into consideration to further refine the Policy before it comes into effect.

This consultation did not include the Remediation Agreement regime.

On this page

1. Effective date

This policy is effective as of a date to be determined. This date is expected to be in early 2019.

2. Application

This policy applies to all procurement processes, standing offers, supply arrangements, contracts and other instruments entered or commenced by a department ("department") or agency ("agency") identified in schedules I, I.1 or II of the Financial Administration Act or another federal entity that voluntarily adopts this policy, other than the following:

3. Context

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 Canada's contracts. 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 or maintains contracts with suppliers that offend the foregoing. In keeping with the significant discretion Canada exercises when entering into contracts, all actions by PWGSC and the Registrar under this policy require considerable discretion (that is, the discretion of PWGSC or the Registrar, as the case may be), as governed by contracting law.

This policy sets out, notably, the circumstances in which the Registrar may declare a supplier ineligible to be, or suspended from being, awarded a contract with Canada (herein referred to as being "ineligible" or "suspended"). It also sets out the maximum ineligibility period and suspension period and the process for determining the length of 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 the Registrar makes determinations on the Registrar's own initiative or upon request by a supplier.

The Integrity Regime consists of this policy, any directives issued further to this policy and any clauses used in instruments relating to contracts or real property agreements that incorporate this policy by reference. Directives will be used for such purposes as elaborating on or clarifying aspects of this policy and form a binding part of this policy. There are found on the Integrity directives page of the Integrity Regime website.

PWGSC may also issue, for information purposes only, information bulletins associated with this policy to provide greater clarity. Information bulletins are for information purposes only. These may be found at the Information and Bulletins page of the Integrity Regime website.

For greater clarity, the Registrar does not make determinations of eligibility pursuant to this policy but rather of ineligibility.

4. Definitions

Definitions to be used in the interpretation of this policy are in Appendix 1.

5. Responsibilities

5.1 Registrar responsibilities

The Registrar is responsible for making determinations of suspensions, ineligibility, periods of ineligibility and suspension, and entering into administrative agreements. The determinations made by the Registrar under this policy will be relied upon by a department or agency (which has authority to enter into a contract) when making a decision on whether to enter into a contract with a supplier.

5.2 Public Works and Government Services Canada responsibilities

PWGSC is responsible for administering the Integrity Regime on behalf of Canada (which includes, without limitation, making recommendations regarding ineligibility, ineligibility periods, suspension and terms and conditions of administrative agreements). PWGSC may, when considered appropriate, issue a directive and information bulletins with respect to any aspect of this policy.

5.3 Department and agency responsibilities

Departments and agencies may make certain decisions under the Integrity Regime, as noted in this 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, if provided for under such contract.

When, pursuant to Section 2, a department or agency excludes a contract from application of this policy (such as when applying this policy could compromise a criminal investigation, national security or public safety or when applying this policy conflicts with its rehabilitation mandate), the department or agency will ensure that the rationale for invoking the exclusion is recorded on file and aligns with its internal control framework.

6. Ineligibility

6.1 Assessment of ineligibility

PWGSC may make an assessment of supplier ineligibility pursuant to this policy in response to a procurement, standing offers and supply arrangements, or when otherwise entering into contracts. In addition, PWGSC may make assessments of ineligibility at any time on PWGSC's own initiative, upon receiving a request from a supplier to conduct an assessment of the supplier's ineligibility, upon receiving a third party complaint or upon receiving a request from a department, agency or other federal entity to which this policy applies.

6.2 Determination of ineligibility

PWGSC will be responsible for the administration of the determination of ineligibility (which includes, without limitation, gathering all information required and determining whether a decision of the Registrar is required). Moreover, the Registrar will make the decisions as to whether notices regarding ineligibility (which includes, without limitation, a Notice of Intention to Declare Ineligible) are issued and whether a supplier is ineligible.

The Registrar will determine that a supplier is ineligible if any of the Material Events provided in the Material Event Chart is found to apply in respect of the supplier.

If either of the following conditions apply:

6.3 Period of ineligibility

6.4 Supplier initiated request for an assessment of ineligibility

A supplier may, at any time and from time to time, submit a written request to the Registrar for an assessment of the supplier's ineligibility. PWGSC and, thereafter, the Registrar will proceed with an assessment of the supplier's ineligibility as provided in section 6.2 of this policy. The supplier's request should include all relevant information (which may include, without limitation, information regarding convictions) relating to Material Events that may result in ineligibility under this policy. Moreover, if:

in each case, failing which the supplier will, upon notice from the Registrar, be ineligible and the failure to provide the same will be considered as an aggravating factor when determining the ineligibility period.

6.5 Effect of determination

Upon a determination that a supplier is ineligible under this policy:

6.6 Pardons

7. Suspension—Professional misconduct and commercial integrity

7.1 Suspension

7.2 Notice of intention to suspend

7.3 Decision process

The Registrar will consider the information and submissions provided to PWGSC and the Registrar in writing, prior to deciding whether a suspension is warranted in the circumstances. A decision to suspend will be based on whether the Registrar determines, in the Registrar's discretion, that doing business with the supplier poses a risk to Canada. There will be deemed a risk, if the supplier does not present information or written submissions within the time periods prescribed in the Notice of Intention to Suspend and/or fails to retain a third party where requested by the Registrar.

8. Limited review—Ineligibility as a result of the actions of affiliates

9. Public interest exception—Override ineligibility and suspension

10. Administrative agreements

10.1 Discretionary administrative agreements

10.2 Administrative agreements covering suspension

10.3 Standard terms

Administrative agreements will provide:

10.4 Ineligibility or suspension, and no administrative agreement

If the supplier is ineligible or suspended and refuses to enter into such an administrative agreement or the Registrar is not prepared to enter into an administrative agreement with the supplier, the supplier will remain ineligible or suspended, as the case may be.

11. The independent third party

11.4 Verification and the independent third party

12. Obligations with respect to first-tier subcontracting

12.1 Entering into contracts with ineligible first-tier subcontractors

12.2 Ineligible first-tier subcontractors on an existing contract

If, after a contract is entered into or the related bid/offer is awarded or accepted, any or all of a supplier's first-tier subcontractors become ineligible, the supplier:

12.3 Contracts awarded with first-tier subcontractors that became ineligible or suspended between submission of an offer/bid and contract awarded, accepted or called-up

If, during the period beginning on the day when an offer/bid is received and ending on the day when the offer/bid is awarded, accepted or called-up :

12.4 Supplier/contracting authority review before contract award, acceptance or call-up

The contracting authority may advise a supplier identified as the top-ranked bidder/offeror according to the evaluation criteria that it is required (or the supplier may decide) to verify the status of all proposed first-tier subcontractors before its bid/offer is awarded, accepted or called-up. If requested by the contracting authority, the supplier must advise the contracting authority in writing within five (5) business days of the request, of the results of the integrity verification.

In each case, if:

13. Disclosure

13.1 Initial disclosure

All suppliers, regardless of their status under this policy, will submit the following information to the contracting authority when responding to a procurement, applying for a standing offer or supply arrangement and, to the extent not included as part of a procurement, standing offer or supply arrangement process, before entering into a contract or other instrument:

with all the parties to a joint venture being required to submit the foregoing information. If, however, the foregoing information has not been received 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. Failure to provide the information within such specified period will render a bid or offer non-responsive, or the supplier otherwise disqualified for award of a contract.

13.2 Continuing obligation to disclose during the execution of a contract

The supplier will provide written notice of any:

each to the extent relevant to this policy. Such will be provided to PWGSC:

14. Similar offences

The Registrar will consider the following when making a determination as to whether a Foreign Offence is a Similar Foreign Offence, as the case may be:

15. General anti-avoidance provisions

16. Registrar and Public Works and Government Services Canada's contact information for purposes of this policy

17. Transitional provision

This policy does not apply in respect of any contracts (which includes, without limitation, solicitations that have not been awarded) that reference the July 3, 2015 Ineligibility and Suspension Policy or the April 4, 2016 Ineligibility and Suspension Policy, save and except that:

For greater clarity, other than as provided for above, the July 3, 2015 Ineligibility and Suspension Policy and the April 4, 2016 Ineligibility and Suspension Policy will continue to be effective for all contracts that incorporate the same.

18. Notices

All notices given pursuant to this policy will be in writing and will be given between 9:00 a.m. and 5:00 p.m. on a business day and will be delivered by hand, registered mail, facsimile or sent by electronic mail. Any such notice given in accordance with the above requirements will be deemed to have been given, if sent by registered mail, on the fifth business day following the date of such mailing or, if delivered by hand, facsimile or electronic mail, on the business day on which it was delivered or sent, as the case may be.

Appendix 1—Definitions

For the purposes of this 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; (Carte d'achat)
administrative agreement:
is a negotiated agreement between a supplier and the Registrar pursuant to this policy; (Entente administrative)
affiliate:

one person is an affiliate of another person if:

  1. one person controls or exercises significant influence over the other person;
  2. a third person controls or exercises significant influence over both persons;
  3. both persons are under common control or under common significant influence; or
  4. a third person controls or exercises significant influence over each persons and the third person who controls or exercises significant influence over one person is affiliated with the third person who controls or exercises significant influence over the other person. In addition:
  5. when two or more corporations amalgamate or merge, each such corporations and any new corporation will be deemed to be "affiliates" with each other; and
  6. any predecessors are also deemed to have been affiliated with each other where they would have been affiliated with each other immediately before the amalgamation or merger if:
    1. the new corporation had existed immediately before that time; and
    2. 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; (Affiliée)
business day:
means any day other than a Saturday, a Sunday, a statutory holiday in any province or territory or a federal statutory holiday; (Jour ouvrable)
contract:
means an agreement between a contracting authority and a person or firm to provide a good, perform a service, sell or dispose of a good, or construct a work, or a real property agreement between a contracting authority and a person or firm for appropriate consideration; (Contrat)
contracting authority:
with respect to a contract, bid or offer that is subject to this policy, means the contracting authority for the relevant department, agency or other federal entity that voluntarily adopts this policy (which includes, without limitation, real property authority); (Autorité contractante)
control:

means:

  1. direct control, such as where:
    1. 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;
    2. 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;
    3. 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;
    4. the general partner of a limited partnership controls the limited partnership; and
    5. 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;
  2. deemed control, such as where a person who controls an entity is deemed to control any entity that is controlled, or deemed to be controlled, by the entity; and
  3. 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;
  4. 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.
For greater clarity, 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; (Contrôle)
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; (Entente relative à un instrument dérivé)
federal immovable" or "federal real property:
means an immovable belonging to Canada, and includes an immovable of which Canada has the power to dispose; (Immeuble fédéral)
financial contract:
means:
  1. 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;
  2. 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;
  3. a repurchase, reverse repurchase or buy-sell back agreement with respect to securities or commodities;
  4. a margin loan in so far as it is in respect of a securities account or futures account maintained by a financial intermediary;
  5. any combination of agreements referred to in any of paragraphs (a) to (d);
  6. a master agreement in so far as it is in respect of an agreement referred to in any of paragraphs (a) to (e);
  7. a master agreement in so far as it is in respect of a master agreement referred to in paragraph (f);
  8. 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
  9. 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); (Contrat financier)
first-tier subcontract:
means:
  1. a contract made between the supplier and a person (other than Canada) for carrying out or supply goods for part or all of another contract between the supplier and Canada (which may include, without limitation, all the activities, services, goods, matters and things required to be done, delivered or performed by the supplier under a contract or real property agreement); and
  2. a sublease made between the supplier and a person (other than Canada) for part of or all of premises leased by Canada to the supplier; (Premier contrat de sous‑traitance)
first-tier subcontractor:
means a contractor to a first-tier subcontract; (Premier sous‑traitant)
Foreign Offence:
means a civil judgment, regulatory offence, decision, decree, directive, order or consent agreement or criminal judgment in a jurisdiction other than Canada or such other similar enforceable decision pursuant to the authority of such other jurisdiction; (Infraction étrangère)
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; (Immeuble)
Ineligibility and Suspension List:
is the public list of companies that have been determined to be ineligible or suspended by the Registrar under this policy; (Liste de fournisseurs inadmissibles et suspendus)
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; (Base de données sur l'intégrité)
insurance contract:
means:
  1. 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 :
    1. a policy of reinsurance issued by an insurer,
    2. 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:
      1. are payable on a periodic basis at intervals that are longer or shorter than one year; or
      2. vary in amount depending on the value of a specific group of assets or on changes in interest rates; and
    3. 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
  2. a policy or contract in the nature of accident and sickness insurance, whether this policy is issued, or the contract is entered into, by an insurer; (Contrat d'assurance)
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; (Entente intergouvernementale)
intra-governmental agreement:
means an agreement that involves or is made between different departments, agencies or other federal entities of the Government of Canada; (Entente intragouvernementale)
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; (Permis)
Notice of Ineligibility:
is a notice by the Registrar to a supplier declaring the supplier ineligible to be awarded of a contract or real property agreement for a specific period of time; (Avis d'inadmissibilité)
Notice of Intention to Declare Ineligible:
is a notice by the Registrar to a supplier informing a supplier that it is being reviewed for a potential determination of ineligibility; (Avis d'intention de déclarer inadmissible)
Notice of Intention to Suspend:
is a notice by the Registrar to a supplier informing a supplier that it is being reviewed for a potential determination of suspension; (Avis d'intention de suspendre)
Notice of Suspension:
is a notice by the Registrar to a supplier declaring the supplier suspended from being able to be awarded a contract or real property agreement for a specific period of time; (Avis de suspension)
person:
means an individual, a body corporate, trust, partnership, fund, an unincorporated association or organization, the government of a foreign country or any political subdivisions thereof and any agency thereof; (Personne)
procurement process:
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 to 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, and (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;
and includes without limitation, solicitation, invitation to tender, request for proposals, request for quotations and invitation to offer; (Processus d'approvisionnement)
Provincial Offence:
means a Provincial offence, whether in the form of a civil judgment, regulatory offence, decision, decree, directive, order or consent agreement (which includes, without limitation, those pursuant to securities legislation), criminal judgment or such other similar enforceable decision pursuant to the authority of a Province; (Infraction provinciale)
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; (Bien immobilier)
real property agreement:
includes offer to purchase, offer to sale, agreement of purchase and sale, leases and licences; (Accord immobilier)
Registrar:
means the Assistant Deputy Minister of Public Services and Procurement Canada responsible for this Policy; (Registraire)
representative:
in respect of an organization, means a director, partner, employee, member, agent or contractor of the organization; (Représentant)
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; (Cadre supérieur)
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; (contrat de service)
significant influence:
means where one or more of the following apply:
  1. the person has decision rights or veto rights over decisions pertaining to the strategic direction of an entity. The strategic direction includes, but is not limited to, decisions pertaining to:
    1. business plan;
    2. nature of the business;
    3. financial or material transactions;
    4. funds or assets;
    5. trusts;
    6. profit-sharing, share option, bonus or any other incentive related process; or
    7. investments;
  2. the person has decision rights or veto rights over decisions pertaining to the appointment or removal of one or more directors or trustees;
  3. the person owns assets or has direct or indirect influence over an entity that, if exercised, would influence the strategic direction of an entity;
  4. the person directs or influences the day to day management and direction of an entity; and
  5. the person is consulted on the strategic direction of an entity and the recommendations provided influence the outcome of decisions made by the directors or trustees; (Influence notable)
Similar Foreign Offence:
means a Foreign Offence which is similar to an offence listed in paragraphs (a), (b)(i), (ii), (iii), (iv), (vi), (ix) and (x) or (c) of the Material Event Chart; (Infraction étrangère de même nature)
Similar Provincial Offence:
means a Provincial Offence which is similar to an offence listed in section 239 of the Income Tax Act, section 327 of the Excise Tax Act, subsection 14(1), with respect to sections 5 and 7, of the Lobbying Act, and paragraph 80(1)(b) (defraud Her Majesty), paragraph 80(1)(d) (False entry, certificate or return), section 81(Bribes Offered or Accepted) (False entry, certificate or return), subsection 80(2) (Fraud against Her Majesty), or section 154.01 (Fraud against Her Majesty) of the Financial Administration Act; (Infraction provinciale de même nature)
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, option or, licensor, purchaser, tenant or contractor; or
  3. conducts business with Canada as an agent or representative of another supplier,

where this policy applies; (Fournisseur)

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; (Contrat d'approvisionnement)
Suspension period:
means the period from the day that the Registrar gives a Notice of Suspension to a supplier pursuant to section 7 of this policy to and including the earlier of:
  1. eighteen (18) months following such notice which can be longer if a judicial process is underway; and
  2. if applicable, the date that the Registrar determines that the professional misconduct or acts or omissions which adversely reflected on the commercial integrity of the supplier no longer apply or have been addressed to the satisfaction of the Registrar; (Période de suspension)
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 this 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; (Valeur transactionnelle)
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; (Paiement de transfert)

Appendix 2—Grounds—ineligibility/suspension

(1) The following chart (the "Material Event Chart") includes the events that will trigger the determination of ineligibility (each of such events is a "Material Event") and, as provided for in section 7.1 and when relating to certain charges, may be considered when determining a suspension:

  1. The supplier has a loss of capacity to contract with Her Majesty and to receive any benefit under a contract between Her Majesty and the supplier under subsection 750(3) of the Criminal Code, which, for greater clarity, relates to convictions of offences under: 
    1. paragraph 80(1)(d) (False entry, certificate or return), subsection 80(2) (Fraud against Her Majesty), or section 154.01 (Fraud against Her Majesty) of the Financial Administration Act; or
    2. section 121 (Frauds on the government and Contractor subscribing to election fund), section 124 (Selling or purchasing office), section 380 (Fraud) for fraud committed against Her Majesty, or section 418 (Selling defective stores to Her Majesty) of the Criminal Code.
  2. The supplier has, in the past three (3) yearsFootnote *, been convicted of or pleaded guilty to any of the following offences:
    1. section 83.02, 83.03 and 83.04 (financing of terrorism), section 119 (Bribery of judicial officers, etc.), section 120 (Bribery of officers), section 123 (Municipal Corruption), section 279.01 (Trafficking in Persons), section 279.011 (Trafficking a Person Under Eighteen Years), subsection 279.02(1) (Receiving Benefit to Facilitate Adult Trafficking), subsection 279.02(2) (Receiving Benefit to Facilitate Child Trafficking), subsection 279.03(1) (Withholding/destroying Identity Documents to Facilitate Adult Trafficking), subsection 279.03(2) (Withholding/destroying Identity Documents to Facilitate Child Trafficking), section 346 (Extortion), sections 366 to 368 (Forgery and other offences resembling forgery), section 380 (Fraud – other than against Her Majesty), section 382 (Fraudulent manipulation of stock exchange transactions), section 382.1 (Prohibited insider trading), section 397 (Falsification of books and documents), section 422 (Criminal breach of contract), section 426 (Secret commissions), section 462.31 (Laundering proceeds of crime) or sections 467.11 to 467.13 (Participation in activities of criminal organization) of the Criminal Code;
    2. section 463 (Attempts, Accessories), section 464 (Counselling Offence That is Not Committed) or section 465 (Conspiracy) of the Criminal Code, each solely to the extent that it relates to an offence listed under subsection b(i) of the Material Event Chart;
    3. section 45 (Conspiracies, agreements or arrangements between competitors), section 46 (Foreign directives), section 47 (Bid rigging), section 49 (Agreements or arrangements of federal financial institutions), section 52 (False or misleading representation), or section 53 (Deceptive notice of winning a prize) of the Competition Act;
    4. section 239 (False or deceptive statements) of the Income Tax Act;
    5. section 327 (False or deceptive statements) of the Excise Tax Act;
    6. section 3 (Bribing a foreign public official), section 4 (Accounting), or section 5 (Offence committed outside Canada) of the Corruption of Foreign Public Officials Act;
    7. section 5 (Trafficking in substance), section 6 (Importing and exporting), or section 7 (Production of substance) of the Controlled Drugs and Substances Act;
    8. subsection 497 (2) (Offences requiring intent – dual procedure) of the Canada Elections Act;
    9. paragraph 80(1)(b) (defraud Her Majesty) or section 81(Bribes Offered or Accepted) of the Financial Administration Act;
    10. section 117 (trafficking in persons) or 118 (organizing entry into Canada) of the Immigration and Refugee Protection Act; or
    11. any offence under the Canada Labour Code. Part II and Part III.
  3. The supplier has, in the past three (3) yearsFootnote *, been convicted of or pleaded guilty to an offence pursuant to subsection 14(1), with respect to sections 5 or 7, of the Lobbying Act.
  4. The supplier, in the past three (3) yearsFootnote *:
    1. failed to terminate a first-tier subcontract within one (1) business day of when the supplier knew or ought to have known that a first-tier subcontractor lacks the capacity to receive any benefit under a contract with Canada, pursuant to subsection 750(3) of the Criminal Code; or
    2. entered into a contract with an ineligible or suspended first-tier subcontractor, unless:
      1. the supplier has the written advance approval to enter into such subcontract from the relevant Deputy Head or equivalent;
      2. in the case of an ineligible or suspended first-tier subcontractor that is an individual, PWGSC failed to identify that first-tier subcontractor as ineligible or suspended when the supplier requested an integrity verification from the Registrar pursuant to section 12;
      3. in the case of an ineligible or suspended first-tier subcontractor that is not an individual, the first-tier subcontractor's name was not included on the public Ineligibility and Suspension List at the time the supplier entered into that first-tier subcontract; or
      4. 1. the first-tier subcontractor becomes ineligible or suspended during the period from the date when the supplier submits the related bid or offer to and including the date when the related bid or offer is awarded, accepted or called-up; and 2. the supplier did not know of the ineligibility or suspension and a reasonable person in the circumstances would not have known of the same.
  5. The Registrar determines, in the Registrar’s discretion that the supplier has, at any time, provided certification or declaration to PWGSC in relation to this policy which is false or misleading, in a material respect.
  6. The supplier, or the supplier's affiliate, has, in the past three (3) yearsFootnote *,
    1. been convicted of a Foreign Offence, or pleaded guilty to a Foreign Offence, that the Registrar determines, in the Registrar's discretion, to be a Similar Foreign Offence, or
    2. agreed to a statement of facts,
    in relation to having committed an act or omission outside of Canada, and the Registrar determines, in the Registrar's discretion, that if such act or omission had occurred in Canada, it would likely lead to a conviction of an offence listed in paragraph (a), (b)(i), (ii), (iii), (iv), (vi), (ix) and (x), or (c) of the Material Event Chart. The Registrar will consider the actions or omission of affiliates only if the Registrar determines, in the Registrar's discretion, that the supplier directed, influenced, authorized, assented to, acquiesced to, or participated in those actions or omissions.
  7. The supplier, or the supplier's affiliate, has, in the past three (3) yearsFootnote *, either
    1. been convicted of, or pleaded guilty to, a Provincial Offence, or
    2. agreed to a statement of facts, in relation to having committed an act or omission in Canada, and the Registrar determines, in the Registrar's discretion, that such act or omission is similar to an act which would likely lead to a conviction for an offence listed in paragraph (a)(i), (b)(iv), (v), and (ix), or (c) of the Material Event Chart; or
    3. been convicted, or pleaded guilty, under provincial securities legislation relating to fraud, collusion or insider trading. The Registrar will consider the actions or omission of affiliates only if the Registrar determines, in the Registrar's discretion, that the supplier directed, influenced, authorized, assented to, acquiesced to, or participated in those actions or omissions. For greater clarity, the foregoing allows the Registrar, notwithstanding a decision not to proceed with an offence federally, to consider the underlying conduct.
  8. The supplier's affiliate, in the past three (3) yearsFootnote *, was convicted of or pleaded guilty to an offence identified in paragraphs (a), (b) or (c) of this Material Event Chart and the Registrar determines, in the Registrar's discretion, that the supplier directed, influenced, authorized, assented to, acquiesced in or participated in any action or omission, which directly or indirectly enabled the underlying action(s) or omission(s) that relate to the offence, where the supplier knew or ought to have known that its affiliate was involved in the offence.
  9. The supplier:
    1. is a person listed or designated under regulations made pursuant to the United Nations Act (UN Act), Special Economic Measures Act (SEMA), the Justice for Victims of Corrupt Foreign Officials Act (JVCFOA) or the Freezing Assets of Corrupt Foreign Officials Act (FACFOA), or is owned or controlled by such a person; or
    2. has engaged in any activity prohibited under regulations made pursuant to the UN Act, SEMA, the JVCFOA or the FACFOA.
  10. The Registrar determines, at any time and in the Registrar's discretion, that:
    1. contracting with the supplier may bring the Federal procurement into public disrepute or otherwise be contrary to Canadian public policy (such as, in situations of false declarations, significant or persistent deficiencies in performance of any substantive requirement or obligation under a prior contract or contracts, final judgments in respect of serious crimes or other serious offences and professional misconduct or acts or omissions that adversely reflect on the commercial integrity of the supplier); or
    2. the supplier lacks business integrity or business honesty that seriously and directly affects the present responsibility of the supplier; with Canada considering the foregoing in situations where the supplier:
      1. within the past three (3) yearsFootnote *, breached the Code of Conduct for Procurement; or
      2. is determined to be ineligible or debarred by any provincial, foreign jurisdiction or international organization (such as, the World Bank).
  11. The supplier has, within the past three (3) yearsFootnote * been convicted of an offense that resulted in being listed on the Environmental Offenders Registry; and the Registrar determines, in the Registrar's discretion, that the foregoing is serious, repetitive or otherwise egregious.
  12. The supplier has, within the past three (3) yearsFootnote *, been assessed an administrative monetary penalty and/or has been publicly named for having committed a violation pursuant to Part IV of the Canada Labour Code; and the Registrar determines, in the Registrar's discretion, that the foregoing is serious, repetitive and/or otherwise egregious.
  13. The supplier has within the last three (3) yearsFootnote * received a poor performance evaluation pursuant to PWGSC's Vendor Performance Corrective Measure Policy and the Registrar determines, in the Registrar's discretion, that the foregoing is serious, repetitive or otherwise egregious.
  14. A director, manager or senior officer of the supplier is ineligible to be awarded a contract or is otherwise suspended under this policy and the Registrar determines, in the Registrar's discretion, that such director, manager or senior officer has an opportunity to direct or influence the supplier.

Appendix 3—Factors to consider in establishing period of ineligibility

In determining the length of a supplier's ineligibility period, the Registrar will take into account the seriousness of the conduct engaged in, balanced against the steps taken by the supplier to ensure that similar conduct does not recur. The more serious the conduct that resulted in the determination of ineligibility, the more comprehensive the steps taken to address it will need to be. The Registrar will need to be convinced that the circumstances leading to the debarment have been addressed.

Factors that the Registrar may take into account include the following:

Seriousness of the conduct engaged in

Steps taken to address concerns

From: Public Services and Procurement Canada

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