Suspension or Cancellation of Supply Arrangement

In Canadian federal procurement, Suspension or Cancellation of Supply Arrangement refers to Canada's right to suspend or terminate a supplier's qualification under a Supply Arrangement (SA). An SA is a pre-qualification instrument. Canada invites qualified suppliers to compete for later requirements, and only suppliers that remain qualified can bid on those solicitations.

When Canada suspends or cancels a supplier's qualification by written notice, the supplier may be removed from the list of pre-qualified suppliers. It then becomes ineligible to bid on solicitations issued under that SA. The wording comes from the Standard Acquisition Clauses and Conditions (SACC) and from individual Public Services and Procurement Canada (PSPC) arrangement documents, such as the Temporary Help Services Supply Arrangement.

Grounds for suspending or cancelling a qualification

The grounds are set out in each arrangement. Under the Temporary Help Services SA, Canada may suspend or cancel where:

• the supplier no longer meets a required qualification;
• the supplier defaults under a resulting contract and Canada terminates that contract for default;
• the supplier becomes bankrupt or insolvent, including receivership, a receiving order or winding-up;
• the supplier is subject to measures under the Vendor Performance Policy or a similar policy.

The task-based services SA adds another ground. Canada may act when a supplier publicly releases information that conflicts with the SA's terms, conditions, pricing or system availability, or when it defaults on SA obligations, including Code of Conduct violations. The task-based services arrangement describes these provisions.

Where the clause appears in PSPC arrangements

The clause is not limited to one arrangement. The solutions-based informatics professional services SA has a section titled "Suspension or Cancellation of qualification by Canada," with similar grounds. The solutions-based informatics professional services arrangement sets them out.

The ProServices SA contains the same type of clause and provides progressive consequences for defaults, including termination after a fourth default. The Professional Audit Support Services SA allows cancellation of the SA, or of individual categories or streams, with at least 30 calendar days' notice.

Broader policies can also apply. PSPC's Ineligibility and Suspension Policy can suspend a supplier from federal procurements, standing offers, supply arrangements and contracts. Under the anti-forced-labour requirements, PSPC may set aside a standing offer or suspend or cancel an SA where there are reasonable grounds to believe offered goods or services involve forced labour or human trafficking.

Notice, representations and cancelling an entire arrangement

Canada acts by written notice. One PWGSC SA provides 30 days for the supplier to make written representations, unless Canada sets another deadline. Canada may also cancel an SA, category or stream by giving all suppliers at least 30 calendar days' written notice and posting the cancellation on the applicable government tendering system or CanadaBuys.

Suspension or removal from a supplier list does not, by itself, relieve a supplier from completing contracts already in place. Existing contracts continue unless the relevant contract is separately terminated. This is reflected in the request for supply arrangement on CanadaBuys and in the PWGSC publication that covers the clause.

What it means for a supplier bidding on Canadian public contracts

Qualification under an SA is a condition of staying eligible to bid, so suppliers need to protect it. In practice, that means:

• Maintain every qualification the SA requires.
• Perform resulting contracts and SA obligations, because a termination for default can lead to suspension or cancellation.
• Follow the Code of Conduct for Procurement and the applicable supplier-performance policies.
• Keep public statements about terms, pricing and availability consistent with the SA.
• Answer any notice of concern or proposed suspension within the stated deadline.
• Watch CanadaBuys for notices that cancel an SA, category or stream.