Approval Authorities

Approval authorities are the positions, officials or bodies with the authority to approve a procurement, contract, contractual arrangement, project or amendment within prescribed limits. In Canadian federal procurement, the term describes the approval a buyer must have in hand before it can proceed. That approval may come from a contracting authority, a project approval authority, an expenditure authority or the Treasury Board.

Organizations also define the term in their own policies. The Canadian Air Transport Security Authority (CATSA) defines an Approval Authority as the position or body with authority to approve contracts in accordance with its policy and procedures. The approval sits on the buyer's side of the relationship. It controls when the buyer may award, amend or commit to a contract, and it is not a certification that suppliers hold.

How Treasury Board contracting approvals work

The Treasury Board Directive on the Management of Procurement sets the federal rules for contracting approvals. It requires contracting authorities to seek Treasury Board approval before entering into or amending a contract when its estimated value exceeds the applicable limits. The estimate includes taxes, amendments and follow-on arrangements.

The limits are in Appendix A of the directive, under the heading Contracting Approvals. A contract or contractual arrangement can be entered into without Treasury Board approval when the amount payable does not exceed the limit that applies to the identified contracting authority. The amount payable includes applicable taxes, fees and amendments.

The same directive identifies Public Services and Procurement Canada (PSPC) as a common service provider. PSPC plans and organizes the acquisition of goods, services and construction services for departments in accordance with applicable law. On a large or complex purchase, the client department, PSPC and the Treasury Board can each hold a part of the approval path, depending on the delegated limits.

Project approval authority and the $2.5 million base limit

Approval authorities also apply to projects, not only to contracts. The Directive on the Management of Projects and Programmes assigns project approval authority limits. Departments and agencies subject to the directive have a base project approval authority limit of $2.5 million, inclusive of GST and HST.

The Policy on the Planning and Management of Investments adds a further control. It requires departments to ensure that no action is taken on planned investments without the required authorities in place. This covers projects and procurements that exceed the limits in the procurement directive.

Approval authorities in CATSA and other federal organizations

Separate federal organizations can set out approval authorities in their own policies and delegation charts. CATSA's procurement and contracting policy defines the term and applies it in three places:

• Procurement strategies for Board-level contracts must be approved before a contract or solicitation document is issued.
• Contracts and amendments must be approved by the applicable approval authorities under CATSA's delegation chart.
• Multi-year contracts, including option periods, require approval under the policy's rules.

CanadaBuys also treats approvals as part of the buyer workflow. Its buyer's guide identifies approval authorities and approval processes for contracts, standing offers and supply arrangements.

Approval authority versus contracting authority

The two terms are related but not interchangeable. A contracting authority is the legally authorized party or organization that may enter into a contract. An approval authority is the official or body whose approval is required under the applicable delegations and limits. One organization can hold both roles, but the approval is a separate step that has to be satisfied. The Treasury Board policy framework sets out the related roles.

What approval authorities mean for a supplier

Approval authorities govern the buyer's authorization to proceed. They do not create a universal supplier requirement. They can still affect a bid in practical ways:

• Provide complete and accurate pricing, tax, option-period and amendment information, because those values count toward approval thresholds.
• Expect award, amendment or authorization to proceed to wait until the buyer obtains its internal or Treasury Board approvals.
• Follow the approval conditions stated in the solicitation and in any resulting contract or amendment process.
• Recognize that a strategy, contract, standing offer, supply arrangement or amendment may need approval at a higher level before it takes effect.