Defence Contract

When you're bidding on federal opportunities, understanding whether you're dealing with a defence contract changes everything from security requirements to reporting obligations. These agreements cover goods and services tied to national security, but here's the thing: they're not always awarded by the Department of National Defence. The client department acts as the technical authority and determines whether their requirement qualifies as defence-related.

How It Works

Defence contracts operate under a different set of rules than standard goods contracts or service agreements. According to the Government of Canada Supply Manual, the client department—whether that's DND, Public Safety Canada, or another federal entity—decides if their procurement falls into the defence category. This designation isn't just about who's buying. It's about what's being bought and how it relates to national security.

In practice, these contracts trigger specific trade agreement exemptions. Canada's obligations under agreements like CETA and CUSMA include carve-outs for defence procurement, giving the government more flexibility in how they award these contracts. You might see a procurement marked as defence-related even when it comes from a civilian department, simply because the end use supports national security objectives.

The contracting process typically flows through Public Services and Procurement Canada (PSPC), though some departments have delegated authorities for certain thresholds. Security clearances become non-negotiable for most bidders. You'll need to demonstrate not just technical capability, but also your ability to handle classified information and maintain secure facilities when required. The Controlled Goods Program often comes into play, adding another layer of compliance for contractors dealing with military technology or sensitive equipment.

Key Considerations

• Security clearance timelines can add months to your onboarding process. Start early. If you're new to this space, personnel screening and facility security assessments don't happen overnight

• The defence designation exempts procurements from certain trade agreement obligations, which means you might encounter different evaluation criteria or procurement methods than you'd see in civilian contracts

• Export controls and the Controlled Goods Program create additional compliance requirements that persist throughout contract performance, not just at the award stage

• Contract Security Program requirements may mandate specific physical security measures at your facilities, background checks for employees, and strict protocols for handling sensitive information

Related Terms

Standing Offer, Supply Arrangement, National Security Exception, Controlled Goods Program, Contract Security Program

Sources

• Government of Canada Supply Manual - Official federal procurement policy and procedures

• Canada Buys - Federal government procurement information portal

• Buy and Sell - Federal tender opportunities database

If you're pursuing defence work, factor in the security clearance timeline from day one. Many bidders lose opportunities not because they can't do the work, but because they underestimate how long it takes to meet the security requirements.