And So it Confuses… the Latest Clarifications to the Federal Ineligibility and Suspension Policy and Verification Forms Are Not So Clear

Further to the revised Ineligibility and Suspension Policy, which came into effect on May 31, 2024, this summer Canada (quietly) released related information bulletins and new supplier integrity declaration and verification forms to be completed in all federal contracting processes.

We review these information bulletins and forms below, as well as some notable differences between the Policy, the information bulletins and the forms (including issues suppliers should be aware of when completing the forms).

Information Bulletins

In late June 2024, Canada’s “Supplier integrity and compliance” website was updated with three (undated) information bulletins from the Office of Supplier Integrity and Compliance (OSIC):

1. Required information to submit with a bid or offer (first information bulletin)
2. Providing a false or misleading certification or declaration (second information bulletin)
3. Application of the Ineligibility and Suspension Policy to subcontractors (third information bulletin)

Although the bulletins are intended to provide “information to help suppliers understand the requirements and processes applicable to them”, they do not align to the Policy. Reconciling the misalignment becomes even more problematic because – according to Canada – the bulletins are for information purposes only, and do not modify the Policy.

Suppliers who may have had questions on the Policy are now faced with the very real issue that the information that should clarify the Policy and help suppliers assure compliance might just lead a supplier to be non-compliant. As the outcomes of non-compliance are serious and can impact a supplier’s ability to do business with the government, it is hoped that Canada will further clarify the Policy and associated forms^[1].

Supplier Forms

There are 4 new or updated “Supplier forms” to be completed for integrity certification and verification purpose (as applicable):

• List of Names for Integrity Verification form
• Integrity Declaration form
• Subcontractor Integrity Verification Request form
• Subcontractor Exception form

We review each of the Forms below.

List of Names Required for Integrity Verification Form

When submitting a bid or offer, suppliers are required to provide a list of names of relevant individuals for integrity verification. The List of Names form may be used to provide the required information or bidders may use another format so long as the required information is submitted.

All the directors of a supplier must be identified. The disclosure of additional individuals may be required depending on a supplier’s organizational structure. For example, a sole proprietorship must provide the owner’s name; a private corporation must provide the names of all directors, as well as individuals or entities that hold 5% or more ownership; a non-profit or a public corporation must provide the names of all directors; etc.

Changes to the List of Names must be submitted within 10 business days if the bid or offer evaluation is ongoing, or within 22 business days following the contract award and during the performance of a contract.

Discrepancies between the Policy, the Form and the Information Bulletin(s)

While the List of Names form and the first information bulletin are consistent that “failure to submit this information with a bid or offer, where required, will render the bid or offer non-compliant” (i.e., disqualified), the form fails to note that under the Policy there is a ‘grace period’. If the required information is not provided by the time the evaluation of bids or offers is completed, the contracting authority will inform the supplier and specify a period for providing the information.

Supplier Integrity Declaration Form

Certifications and declarations are required for each bid or offer. These certifications are either incorporated by reference from the Policy or provided in the procurement documents. A supplier is deemed to certify that:

1. it has read the Policy;
2. it understands that certain circumstances, as described in the Policy, will or may result in a determination of ineligibility or suspension under the Policy;
3. it is aware that Canada may request additional information, certifications, and validations from the bidder or offeror or a third party for the purpose of determining of ineligibility or suspension;
4. none of the grounds for ineligibility or suspension under the Policy apply to itself, its affiliates or its proposed first tier subcontractors; and,
5. it is not aware of a determination of ineligibility or suspension issued by Canada that applies to it.

Discrepancies between the Policy, Form and the Information Bulletin(s):

There are significant discrepancies between the Integrity Declaration form and the second information bulletin:

• If a supplier is unable to provide any of the deemed certifications listed above, the submission of a completed form is presented as a mandatory requirement in the form itself (the term “must” is used) but seems to be optional in the information bulletin (“if a supplier is unsure or unable to confirm the information [provided in the certification]…, the supplier should submit an Integrity Declaration Form” [emphasis added])

and between the form and the Policy:

• Suppliers are to identify if they have been charged with or convicted of (or if an affiliate has been convicted of) a provincial or foreign offence – or been subject to a foreign judgment – that is similar to one of the listed federal offences. However, the list provided in the form is broader than the federal offences provided under the Policy definitions for “Similar Provincial Offence” and “Similar Foreign Offence”, respectively.

The Policy states that the Registrar of Ineligibility and Suspension, not the supplier, is responsible for determining whether a provincial or foreign offence is “similar” to a listed federal offence. While the Registrar may retain the discretion to make such a determination, there exists no guidance for suppliers as to how this determination is made. This raises significant concern with respect to how a proper assessment of provincial or foreign offences would be conducted. Questions such as how “similarity” is determined and what is the degree of similarity required are unanswered in the Policy or information bulletins. Further, as offences are by nature legal matters for which legal advice should be sought, it is not clear how the Registrar will obtain legal advice for a non-federal jurisdiction in a timely manner that will not delay a procurement process.

The manner in which the Integrity Declaration form is structured puts the onus on bidders and offerors to make an assessment at the outset, in determining whether they need to complete the form for submission with their bid or offer.

There are serious consequences for any certifications or declarations determined to be false or misleading (whether or not intentional), including potential suspension or debarment, or a deemed default under a contract. As such, suppliers must exercise caution in their assessment of any provincial or foreign offence and not assume that a contravention in another jurisdiction is dissimilar (or similar) to the listed federal offences. Obtaining immediate legal advice in this respect is crucial as the time limits for notifying the contracting authority of any change is short - within 10 business days if the contract has not yet been awarded and executed and within 22 business days if the contract has already been awarded and executed.

Subcontractors Integrity Verification and Exception

Suppliers are required to verify the status of their prospective first-tier subcontractors prior to bid submission and before entering into a subcontract.

The Subcontractor Integrity Verification Request form is only required for prime contractors to verify the status of an individual who is a prospective first-tier subcontractor. To verify the status of a subcontractor that is a company, prime contractors are to consult the public Ineligible and Suspended Suppliers List on the OSIC website.

Clarifications in the Form and the Information Bulletin(s):

At this time, the integrity verification process for first tier subcontractors as explained in the third information bulletin aligns with the Policy and highlights the relevant definitions and processes. The Subcontractor Integrity Verification Request form seeks information that is consistent between the Policy and the information bulletin.

The clarifications provided in the third information bulletin include that if a prime contractor requires the services of a suspended or ineligible subcontractor (for example, the only supplier capable of undertaking the subcontract work is ineligible), the prime contractor must complete and submit the Subcontractor Exception Form to the contracting authority in advance of entering into the subcontract. Advance approval at the deputy head level is required in these circumstances. Suppliers should ensure compliance with the requirements for advance verification of subcontractors and for seeking exceptions as a prime contractor will be rendered ineligible if they enter into a contract with an ineligible or suspended first-tier subcontractor without advance approval.

Please see our previous bulletins on the Policy:

And So It Continues – The New Ineligibility and Suspension Policy Is Now in Effect

And So It Begins – How the ArriveCAN Scandal Is Already Impacting Canadian Federal Procurement

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