Legal framework of contracting

The legal framework of contracting is the body of statutes and regulations, national and international agreements, directives and procedures, legal contract requirements, and related laws, policies, regulations and guidelines that govern contracting. It is not a single statute or a standalone legal instrument. It is a way of describing every rule that shapes how a government contract is formed, performed and challenged.

The Government of Canada uses the expression as a procurement-knowledge competency. It appears in the Government of Canada Procurement Community Competencies, which sets out what members of the federal procurement community are expected to know. The same content is published in the Treasury Board Secretariat competency framework document.

What the federal competency framework covers

The federal framework lists several elements that together make up the legal framework of contracting:

• Statutes and regulations.
• National and international agreements, including trade agreements.
• Directives and procedures.
• The legal requirements of a contract.
• Challenge and complaint mechanisms and processes.
• Other applicable laws, policies, regulations and guidelines.
• Decisions and precedents from the Canadian International Trade Tribunal (CITT), the courts and the Office of the Procurement Ombudsman.
• The Department of Justice's role in providing legal services, including when legal advice is required.

Because the framework reaches beyond statutes, it includes the policies and directives that buyers apply day to day, as well as the terms written into each solicitation and resulting contract.

The Financial Administration Act and the Government Contracts Regulations

In federal procurement, Public Services and Procurement Canada (PSPC) and its client departments contract under the Financial Administration Act (FAA), the Government Contracts Regulations (GCRs), trade agreements, and federal procurement policies and directives. CanadaBuys explains this foundation on its page about the Financial Administration Act and Government Contracts Regulations.

The FAA governs the collection and expenditure of public funds. It affects contracting through requirements concerning funding, requisitions and payment certification. CanadaBuys identifies sections 32, 33 and 34 as particularly relevant to contracting.

The Government Contracts Regulations set the conditions for entering into federal contracts for goods, services and construction. They address, among other matters, solicitation requirements, exceptions to solicitation and contract security. Together, the FAA and the GCRs establish the legal framework for managing public funds and contracting practices involving PSPC and its clients.

Challenge and complaint bodies named in the framework

The federal competency framework expressly names the institutions that review contracting decisions and disputes:

• The Canadian International Trade Tribunal (CITT).
• The Federal Court and the Federal Court of Appeal.
• The Office of the Procurement Ombudsman.

Their decisions and precedents form part of the legal framework. A buyer or a supplier who wants to understand how a rule is applied in practice looks to what these bodies have decided, not only to the text of the legislation. The framework also points to the Department of Justice, which provides legal services to the federal government and helps determine when legal advice is required.

What it means for a supplier bidding on Canadian public contracts

Compliance is not limited to submitting a technically responsive bid. A supplier must follow the solicitation's stated instructions and mandatory requirements, and comply with the contract terms and any policies or standards the contract incorporates. Trade agreements and the legal requirements built into the solicitation apply to the process as well.

When a supplier wants to dispute a procurement decision, it must use the specified challenge or complaint process. The bodies in the framework, including the CITT and the Office of the Procurement Ombudsman, each have their own role. The precise obligations depend on the particular solicitation and contract, so a bid team should read the solicitation documents and the contract terms in full before it commits to a response.