Guideline on Agreements

This guideline provides guidance on the types of agreements that ESDC can put in place with various types of organizations or other governments.

• Procurement Contracts
• Transfer Payments
• Contractual Arrangements

Where possible, and especially when using private sector resources, the best option is to protect the Crown by using a contract, which must follow the requirements of the Government Contracts Regulations (GCRs) and the Contracting Policy.

However, there are other instruments available. Determining the appropriate type of instrument to use requires an understanding of the legal characteristics of each party, the applicable laws, relevant policies, and the substance and nature of the transaction. All are covered by the Financial Administration Act (FAA), and all have different obligations in legislation and policy. It is important to find the most effective tool to derive the best value for the Crown and to set out clear expectations and payment provisions for both sides.

Who to Consult

Prior to developing any type of agreement, advice should be sought from the appropriate areas of expertise. For all agreement types except Transfer Payments, the first point of contact should be the ESDC Procurement Team. For Transfer Payments, please consult the Grants and Contributions Centre of Expertise.

In most cases, contractual arrangements will also need to be reviewed by Legal Services. Financial Policy will review interdepartmental arrangements and answer questions on an as needed basis.

Authorities and Regulations

Generally speaking, The Government Contracts Regulations (GCRs) do not apply to contractual arrangements, and therefore there is no requirement to solicit bids. In addition, trade agreements generally do not apply. There can be exceptions, however. When in doubt, you should consult with the legal services unit to determine whether the GCRs or trade agreements apply to a particular arrangement.

However, contractual arrangements are subject to the entry limits outlined in Part I of Appendix C, “Treasury Board Contracts Directive” of the Contracting Policy. Since bids are typically not sought when creating contractual arrangements, the arrangements are subject to the non-competitive limits listed in the Contracts Directive (Appendix C of the Contracting Policy).

ESDC’s limit for non-competitive services is $200,000.

Where a contractual arrangement exceeds ESDC’s limit, the requirement may be sent to Public Services and Procurement Canada (PSPC) through the Specialized Services for Procurement Group (SSPG). PSPC has a non-competitive contracting limit of $5.75M for services. A PReq will need to be entered in myEMS(SAP) and CFOB Procurement will issue a 9200 requisition to PSPC. A sole source justification, statement of work, draft agreement, and any other supporting documents must be attached to the PReq. Please consult the ESDC Procurement Team

Any contractual arrangement that exceeds the PSPC limit will require Treasury Board approval.

Travel

Regardless of agreement type or contract, if travel is involved, wording must be included to specify that all travel is subject to the National Joint Council (NJC) Travel directive or the Special Travel Authorities, and the TB directive on Travel, Hospitality, Conference and Event Expenditures.

Note that the process for Travel, Hospitality, Conference and Event Expenditures (THCEE) must always be followed, or Financial Policy consulted as appropriate.

NOTE: The following examples are meant to guide you in choosing the appropriate document type for your requirement; however, it is important to involve rocurement, legal, and financial policy services as necessary and early in the process. Each situation must be assessed on a case-by-case basis and it is therefore recommended that in each case, you contact the ESDC Procurement Team first to determine what type of agreement is most suitable for your needs.

• Procurement Contracts

  A Contract is a legally binding agreement between Canada and a person or firm to provide a good, perform a service, construct a work or lease real property in return for appropriate consideration.

  When the GoC acquires goods, services or construction from a supplier, a contract is required.

  The procurement process must be followed and completed by CFOB Procurement or, when appropriate, be purchased using a Government Acquisition Card.

  • Goods or services from a supplier required for operations

    This is the most common type of agreement that we see. Your project is in need of items to continue your work- or someone to write a report, install a component or consult on an element of your day-to-day work. You raise a PReq with CFOB Procurement to complete the purchase on your behalf, or, if it is a simple, low dollar value purchase that meets the criteria, you purchase using your acquisition card (AC).

  • Agreements with Universities or Colleges

    Where one wishes to obtain services from a university or college, a procurement contract is used. Clients must enter a PReq in myEMS(SAP) for CFOB Procurement to put a contract in place. This applies only if there are payments from ESDC to the university or college and if there are goods and services being delivered for direct ESDC use. If goods and/or services are not being delivered, a transfer payment or other agreement may be more appropriate. Contact the ESDC Procurement Team to verify.

  • Leadership Conference Program

    Where one wishes to establish a leadership conference or program, a procurement contract may be used. Typically, these are offered by non-government organizations. If it is a re-occurring requirement, it may be prudent to set up standing offers with clear methods of selection for call-ups with several firms. Contact the ESDC procurement team (XLXS, 24 KB) as early as possible in the process.

• Transfer Payments (grants and contributions)

  A transfer payment is a monetary payment, or transfer of goods, services or assets made to a third party, including a Crown Corporation, that does not result in the acquisition by the Government of Canada of any goods, services or assets in support of government operations. Transfer payments are categorized as grants, contributions and other transfer payments. Transfer payments do not include investments, loans or loan guarantees. The TB Directive on Transfer Payments can provide more detail on the design and management of transfer payment programs.

  • Agreements not involving the acquisition of goods, services or constructions

    Typically, transfer payments are made when ESDC would like to further another party’s project, which meets ESDC’s mandate, but for which ESDC will not directly receive a benefit. Where ESDC is not receiving a good or service in return for payment (i.e. there is no acquisition), a Transfer Payment such as a grant or contribution may be used. Consult with the Grants and Contributions Centre of Expertise.

  • Supporting a Conference

    Where one wants to fund an external (one which may be of interest to us, but we are not organizing) conference, a transfer payment using a grant or contribution (Gs&C) may be used. Note that conference attendance/passes for staff can be paid out of O&M money, but any additional support may fall under Gs&Cs. Please consult with the Grants and Contributions Centre of Expertise for further information and to appropriately access Gs&Cs.

  • Agreements with Universities or Colleges

    Where one wishes to enter into an agreement with a university or college where ESDC is not receiving a good or service in return for payment (i.e. there is no acquisition), a Transfer Payment such as a grant or contribution may be used. Alternatively, a collaborative research agreement may be entered into between the institution and the department. Consult with the Grants and Contributions Centre of Expertise. This situation can happen when an educational institution is doing research into a topic that align with ESDC’s mandate (for example, how Covid has affected seniors), but that is not being specifically requested by ESDC.

  • Agreements with International Organizations [eg. Organisation for Economic Co-operation and Development (OECD), World Health Organization (WHO)]

    An International Organization is an organization that is funded or supported by the government but managed privately, which two or more governments are members.

    Where one wants to establish an agreement with an international organization where there is a transfer of money but ESDC is not receiving a good or service in return for payment (i.e. there is no acquisition), a Transfer Payment such as a grant or contribution may be used. Consult with the Grants and Contributions Centre of Expertise. An example of this would be if ESDC were to provide an organization with a set amount of money to fund their research, where the primary purpose is not to support ESDC operations or policy, but the research does align with ESDC’s mandate.

• Contractual Arrangements

  A contractual arrangement is an agreement between Canada and an entity of the Crown (e.g., Crown corporations, provincial governments or municipalities) to provide a good, perform a service, construct a work or lease real property for appropriate consideration. These types of agreements are not contracts in the true sense but are still subject to certain limits or constraints imposed by the Treasury Board. “Contractual arrangement” is not a legal term but a policy term. They do not apply to arrangements (such as service agreements) between federal departments, transfer payment programs, and treaties or arrangements that do not include a procurement of some kind. In instances where working with other public sector organizations will provide best value, a contract may not be appropriate. It is important to note that some types of contractual arrangements are not legally enforceable and for that reason Legal Services should be consulted before entering into an administrative agreement with another entity.

  • Agreements with OGDs

    Pursuant to Section 11.4.1 of the Treasury Board (TB) Contracting Policy, agreements between federal entities are not contracts pursuant to the Government Contracts Regulations and Contracting Policy. Thus, a procurement contract is not required. In most cases, a Memorandum of Understanding (MOU)) is used.

  • Minister’s Advisory Councils

    Where the Minister of Employment and Social Development requires an advisory council under section 9 of the Department of Employment and Social Development Act , a contractual arrangement signed by the Minister of Families, Children and Social Development or a delegate, is typically used. These are agreements and not contracts in law, so they are not treated as procurement contracts. Payments to council members are made via fund commitment.

  • Agreements with International Organizations [eg. Organisation for Economic Co-operation and Development (OECD), World Health Organization (WHO)]

    An International Organization is an organization that is funded or supported by the government but managed privately, which two or more governments are members.

    Where one wants to establish an agreement with an international organization, a contractual arrangement is typically used where there is a transfer of money and ESDC is receiving a good or service in return for payment

  • Agreements with Crown Corporations

    Where one wants to enter into an agreement with a Crown corporation, a contractual arrangement is typically used.

    Crown corporations can be either an agent or a non-agent of the Crown. It is important to obtain confirmation from the Crown corporation as to whether the corporation is an agent or not (i.e. for profit or not for profit).

    In the event that the status of an entity is unclear, Legal Services should be consulted.

  • Agreements involving non-Canadian public sector organizations

    Where one wishes to obtain goods or services from a non-Canadian public sector organization, generally a contractual arrangement can be used; however, Global Affairs Canada (GAC) must be consulted.

    Consult with Legal Services early in the process for additional guidance before proceeding. Legal Services will liaise with the appropriate unit at GAC.

• Other Situations

  • Supporting a Conference

    Conference attendance for ESDC employees does not require a formal procurement contract, and is typically done using an acquisition card. For amounts above the acquisition card limits, a fund commitment can be used. Please note that expenditure initiation approval is required prior to any payment. Please consult your Branch’s THCEE coordinator for any questions.

  • Agreements with Indigenous Governments

    Since these agreements might be impacted by provisions in Comprehensive Land Claims Agreements (CLCAs), Self-Government Agreements (SGA’s) and the Procurement Strategy for Aboriginal Business (PSAB), it is important to involve the Indigenous Coordination and Engagement unit, Legal and ESDC Procurement Team early in the process to determine the best course of action.

    It is important to know, that in the Nunavut Settlement Area, the Government of Canada is required by Article 24 of the Agreement between the Inuit of the Nunavut Settlement Area and Her Majesty the Queen in right of Canada, to provide reasonable support and assistance to Inuit firms to enable them to compete for government contracts. It is important to remember that the obligations contained within Article 24 are legally binding, backed by legislation and constitutionally protected under Section 35 of the Constitution Act 1982.

    To ensure that all federal departments respect these obligations, the Government of Canada has released the Directive on Government Contracts, Including Real Property Leases, in the Nunavut Settlement Area, which became effective December 20, 2019.

    When establishing an agreement for engagement activities with an Indigenous organization, a Contribution Agreement is the preferred method identified by key national Indigenous partners and most respectful of the renewed relationship that has been established with First Nations, Inuit and Métis. More specifically, ESDC’s Engagement Protocol Agreements established with eight key national Indigenous partners , support baseline engagement capacity and are a flexible funding mechanism wherein additional intensive engagement funds may be added from across the organization via an amendment. The Ice unit is available to provide advice and support on Indigenous engagement and is the main point of contact for the Engagement Protocol Agreements.

    If you want to engage with Indigenous partners and only have O&M funding available, we suggest you reach out to ICE to discuss options.