Security Clauses

When you're bidding on federal contracts, you'll encounter security requirements that go well beyond a simple non-disclosure agreement. These contractual provisions spell out exactly how you must handle classified or protected information, what clearances your staff need, and what happens if something goes wrong. Miss these requirements? Your bid won't even make it past the initial screening.

How It Works

The Government of Canada Supply Manual establishes the framework for integrating security requirements into procurement contracts. Here's the thing: the level of security stipulated in your contract depends entirely on what you're doing and what you'll access. A contractor maintaining IT systems for the Department of National Defence faces very different requirements than someone supplying office furniture to a regional office.

In practice, these clauses typically address several areas. Personnel security requirements specify which employees need security clearance—whether it's Reliability Status, Secret, or Top Secret—and the contractor usually bears the cost and administrative burden of obtaining these clearances through the Canadian Security Intelligence Service. Physical security provisions detail how you must protect government assets at your facilities. This might mean secure storage cabinets, alarmed areas, or even dedicated secure rooms depending on the classification level. Information security requirements outline how you handle, store, transmit, and ultimately destroy sensitive materials.

Departments like Shared Services Canada and Public Services and Procurement Canada often include standardized security clauses in their standing offers and supply arrangements. You'll also see specific language about incident reporting—if there's a breach or potential compromise, you're typically required to notify the contracting authority immediately, sometimes within hours. The clauses usually give the government the right to audit your security practices, and non-compliance can result in contract termination without penalty to the Crown.

Key Considerations

• Clearance timing kills bids: Security clearances can take months to process. If you wait until after contract award to start the clearance process for key personnel, you may breach your delivery commitments before you even begin work.

• Subcontractors complicate everything: Your security obligations flow down to any subcontractors. You're responsible for ensuring they meet the same requirements, which means additional oversight and liability on your part.

• Costs add up quickly: Beyond clearance application fees, consider the expense of physical security infrastructure, secure IT systems, security training, and the administrative overhead of maintaining compliance throughout the contract period.

• Foreign ownership raises flags: If your company has foreign ownership or control, expect additional scrutiny and potentially more restrictive terms, especially on contracts involving national security or critical infrastructure.

Related Terms

Security Clearance, SACC Manual, Controlled Goods Program, Protected Information, Security Requirements Check List

Sources

• Government of Canada Supply Manual - Policies and Guidelines

• Canada Buys - Procurement Portal

• Buy and Sell - Government of Canada Tender Opportunities

Before you commit to a contract with significant security requirements, do an honest assessment of your organization's capacity to comply. The penalties for security breaches extend well beyond losing one contract—they can affect your ability to bid on federal work for years to come.