Warranties

In Canadian public procurement, a warranty is an express or implied promise about goods or services, such as their quality, fitness, conformity or performance, that gives the buyer specified remedies if the promise is not met. CanadaBuys states that an offeror's affirmation of fact or promise relating to goods constitutes an express warranty.

Warranties appear in solicitations, standard clauses and resulting contracts. They can be promises stated by the supplier, the manufacturer, the solicitation or the contract itself, or protections that arise by law. CanadaBuys also states that standard warranty provisions generally supplement rather than replace warranties implied or imposed by law, so a contract clause adds to a supplier's legal obligations instead of removing them.

Express, implied and representation warranties

An express warranty is a promise stated in the offer or the contract. An implied warranty arises by law. CanadaBuys identifies fitness for intended purpose and merchantable quality as examples of implied warranties.

The legal source differs by jurisdiction. In Quebec, the relevant Civil Code warranty is described as a warranty of ownership and quality, including latent defects. The same CanadaBuys guidance describes the International Sale of Goods Contracts Convention Act as applying across the other provinces and territories.

A third category is the representation and warranty. These are contractual statements that a contractor confirms are true and on which Canada relies when awarding a contract. They appear in PSPC clauses such as those in the task-based informatics supply arrangement.

The standard 12-month defect warranty in federal contracts

The federal Standard Acquisition Clauses and Conditions (SACC) include a warranty clause for goods and other work. Under the clause published in this SACC volume, the contractor warrants that the work is free from defects in design, materials and workmanship and conforms to the contract. The warranty generally runs for 12 months from delivery or acceptance, unless the written agreement specifies another period.

The remedy is set out in the same clause. If a defect or non-conformance occurs during the warranty period, the contractor must, at the Minister's request, repair, replace or otherwise make good the affected work at the contractor's option and expense. The SACC manual on CanadaBuys is the starting point for finding the clauses a solicitation incorporates by reference.

Warranties in purchase orders, service contracts and supply arrangements

Warranty wording varies by department and contract type. Immigration, Refugees and Citizenship Canada's general purchase-order terms require the contractor to replace defective goods at its own expense during the contractor's standard warranty period. The contractor must also state that warranty period and its terms at delivery.

Service contracts use a different kind of warranty. The Public Service Commission's general conditions for service contracts include a contractor warranty of competence and necessary qualifications. The contractor also warrants a quality of service at least equal to that generally expected from a competent contractor in a comparable situation.

In informatics and professional-services supply arrangements, PSPC clauses include representations and warranties. Limitation-of-liability provisions may specifically address breaches of warranty obligations, as in the professional services supply arrangement.

Warranty requirements in National Defence solicitations

Defence solicitations often ask for more than the standard clause. A National Defence RFP requires bidders to provide the manufacturer's standard warranty period, including periods beyond a 12-month minimum. Additional original-equipment-manufacturer warranties for components may become part of the resulting contract.

Another National Defence RFQ addresses third-party warranties on Canada's existing equipment. The contractor must ensure its work does not adversely affect them. If it does, the contractor may be required to pay recertification or repair costs, perform the warranty work, or reimburse Canada for covered maintenance.

Some CanadaBuys solicitations, such as this RFP, also require the warranty period to be extended for any time Canada cannot use the work because of a defect or non-conformance. Repaired or replaced work may receive a further warranty period.

What warranties mean for a supplier bidding on Canadian public contracts

Read the solicitation and the incorporated clauses to identify which warranty applies and for how long. Where the buyer asks for manufacturer warranties, state them in the bid and provide the required information. Plan for the work to conform for the entire warranty period, and preserve third-party warranties on Canada's existing assets where the contract requires it.

Price the remedy obligations into the bid. Repair, replacement, reimbursement and other corrective work are carried out according to the contract, and under the standard SACC clause they are at the contractor's expense.