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Trade agreement standards for government procurement activities are not always precise, making compliance challenging to assess. When more than one trade agreement rule becomes relevant, the procurement process becomes more challenging because each rule must be followed. Let us understand how you plan to comply with the trade agreements. The Procurement School has listed some guidelines for ensuring compliance with trade agreements.

Numerous provinces and their more extensive public procurement sectors have accepted regional trade treaties such as the New West Partnership Trade Agreement, the Ontario-Quebec Trade and Cooperation Agreement, and the Atlantic Trade and Procurement Partnership, among others. These trade agreements will not be discussed because they do not affect the entire nation, but you should be aware of your responsibilities under the ones that do.

The Applicability

The first step is to evaluate whether trade agreements cover your procurement services. Trade agreements usually have exemptions and dollar thresholds below which they do not apply.

The Dollar thresholds are listed in CFTA, Article 504, item 3, and they range from $25 thousand to $5 million, depending on the type of transaction (goods, services, or construction), as well as who makes the purchase. CETA Annex 19 defines dollar thresholds in Special Drawing Rights (SDR) currency ranging from $130,000 SDR (around $229,000 Canadian) to $5 million SDR (around $8.8 million Canadian). However, trade agreement criteria are raised every two years; if your project is close to the agreement thresholds, ask your procurement consultant or legal counsel for the most recent thresholds.

Next, review the applicable exemptions (CFTA: Article 504, item 11, Article 519, Annex 519.1, Chapters 8 and 9, and CETA: Article 19.2, item 3 and Article 19.3). Some exceptions apply to all trade agreements, including those for commodities purchased for resale and services given to third parties. Other exemptions are available for specific commodities or government bodies. Even if the acquisition is exempt from other trade agreements, you must comply with them if even one of them applies.

The Obligations

The following will help to ensure compliance where trade agreements apply.

No Local Favor: Do not limit the procurement or give an edge to local sellers (e.g. vendors within your city, province or where CETA applies, Canada). This includes both observable preferences, such as giving preference to local suppliers in the procurement, and hidden preferences, such as seeking local knowledge or having the contractor show up on site without much notice when remote attendance would work.

No prior employment with your company is necessary: Do not demand prior employment with your company. A new vendor with comparable experience from another jurisdiction must have a fair chance to win the solicitation.

Information Required for Posting: The CFTA (Article 506, item 6) and CETA (Article 19.6, item 3) specify the information required for solicitation posting. Others are less evident, such as stating that the trade agreement applies, but some are obvious, like the deadline for submissions and a description of the scope.

Public Posting: Post your opportunity on your jurisdiction's website; you cannot limit the solicitation to particular vendors unless a pre-qualification list is available (see below for more information). Each entity must utilize the sites listed in CETA Article 19.5, part B. However, you might post a notification on your jurisdictional site with a link to another site for the specifics and documentation.

Posting Periods: According to how a request is advertised and how submissions are accepted, CETA (Article 19.10, items 3 and 4) provides particular information on the minimum amount of time that a solicitation must be open.

Transparency: Once your contract has been awarded, notify all interested vendors and post the award announcement online (see CFTA Article 516 and CETA Article 19.15)

Prequalification Lists

The government procurement Canada can construct prequalification lists for a single use or several uses thanks to trade agreements. In addition to the requirements listed above, the following also applies:

Threshold: When determining which trade agreement thresholds to utilize, consider the total dollar value of all contracts that could be awarded to prequalified suppliers. This includes all contracts awarded to all prequalified suppliers for the validity of the multi-use list.

Additions: Multi-use lists must permit the addition of new vendors at any point following the creation of the initial list. The solicitation can be published continually or yearly to achieve this. When a response is received after the list has been made, review it right away and let the vendor know about your findings. It is appropriate to cite CFTA Article 508 and CETA Article 19.8.

Direct Prizes

Trade agreements define the scope of direct, non-competitive awards that governments can make (see CFTA Article 513 and CETA Article 19.12). This includes requirements such as having just one vendor available to supply what is needed, unplanned events, private or privileged procurements, etc. Consult the rules in the trade agreements or the direct consultants for public sector procurement to determine whether your situation is within the bounds of what is permitted.

To Conclude

This article is aimed to provide general information; it may not apply to your circumstances. In cases of uncertainty, quickly review the trade agreements, chat with your procurement specialist, or seek legal counsel. For more such queries, you can always get in touch with The Procurement School, where we can train you and get all your questions answered. For those entering or leaving the public sector in Canada, those coming from the private sector, or those who are new to the country, The Procurement school offers a set of three distinct interactive online courses that address contract administration, competitive solicitation methods, and procurement & contract planning.


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Or Write to Us: hello@theprocurementschool.com


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