Emergency contracting limits

Emergency contracting limits set the maximum dollar value your department can spend on urgent, non-competitive contracts when a pressing emergency threatens public health, safety, or security. As of July 15, 2024, most federal departments can award emergency contracts up to $3 million, while Public Services and Procurement Canada (PSPC) and Shared Services Canada (SSC) can go up to $25 million—substantial increases from the previous $1 million and $15 million thresholds.

How It Works

These limits exist as a distinct category of contracting authority outlined in the Supply Manual Chapter 3.22.10. They're not just higher versions of your basic contracting limits—they're supplementary thresholds that only apply when you're facing what the Treasury Board defines as a pressing emergency. Think natural disasters, life-threatening situations, or circumstances where delay would be injurious to the public interest.

Here's the catch: you can't use these limits just because something feels urgent. The Directive on the Management of Procurement requires that the emergency involve actual risk to public health, safety, security, or Crown property. A tight deadline on a regular project doesn't cut it. In practice, this means situations like emergency medical equipment procurement during a pandemic outbreak, disaster response after wildfires or floods, or critical infrastructure failures where competitive bidding would create unacceptable delays.

When you do use emergency contracting authority, you're required to report to the Treasury Board Secretariat within 60 days of either authorizing the contract or starting the work, whichever comes first. This reporting requirement under Appendix C.5 of the Directive ensures oversight even when competitive processes are bypassed. The recent increases under Contracting Policy Notice 2024-2 reflect lessons learned during COVID-19, when temporary limits were dramatically raised—PSPC's went all the way to $500 million until September 30, 2020—to handle the scale and speed of pandemic response.

Key Considerations

• These limits apply to the total contract value, including amendments. You can't split a $5 million emergency requirement into two $2.5 million contracts to stay under the threshold.

• Emergency authority doesn't eliminate your obligation to ensure fair pricing and value for money. Even in urgent situations, you need to justify the costs and document your decisions thoroughly.

• The increased limits from Contracting Policy Notice 2024-2 only apply to new contracts issued after July 15, 2024. Existing emergency contracts fall under whatever limits were in place when they were awarded.

• If your emergency requirement exceeds your department's $3 million limit, you'll need to work with PSPC, which has the higher $25 million threshold and can act as your procurement agent for larger emergencies.

Related Terms

Non-competitive emergency contract, Emergency Contracts, Contracting Authority

Sources

• Supply Manual - Chapter 3.22.10 Emergency Requirements

• Contracting Policy Notice 2024-2: Changes to Emergency Contracting Limits

• Directive on the Management of Procurement, Appendix A.3

The higher limits give you more flexibility to respond quickly when genuine emergencies arise, but they come with the same accountability expectations as any other contracting authority. Document everything.