Guide on the Exceptional Contracting Limit for Sustained Emergencies of National Importance

This guide is primarily for Contracting Authorities at Public Services and Procurement Canada (PSPC) and Shared Services Canada (SSC) who need to enter into high dollar-value contracts in response to a Sustained Emergencies of National Importance (SENI). In the event of a SENI, this guide may be useful for managers in all departments and officials at the Treasury Board of Canada Secretariat. This limit was announced in Contracting Policy Notice 2023-04: Exceptional Contracting Limit for Sustained Emergencies of National Importance for Public Services and Procurement Canada and Shared Services Canada.

This guide explains what a SENI is and how to get approval to use the SENI exceptional contracting limit as set out in Appendix A of the Directive on the Management of Procurement.

In addition, this guide explains the process that may be used for reporting on the use of this exceptional contracting limit.

The COVID-19 pandemic revealed that the emergency contracting framework did not adequately support a pan-Canadian emergency of that scope and duration.

In the event of a similar SENI, the Treasury Board has established a response framework that includes an exceptional contracting limit (SENI limit) for PSPC and SSC as common service providers for the Government of Canada.

The SENI limit enables contracting authorities in PSPC and SSC, without Treasury Board approval, to:

• enter into contracts of unlimited value in response to the SENI
• indemnify or limit contractor liability and issue advance payments that cross fiscal years for contracts related to a SENI

When the President of the Treasury Board approves the use of the SENI limit, they may set conditions on its use.

A SENI is an emergency that occurs only in rare circumstances. A SENI poses threats to public health, society, safety, and the economy. During a SENI, the government needs the capability and flexibility to take rapid actions to respond to a prolonged and evolving crisis.

The President of the Treasury Board would consider the following criteria when asked to approve the use of the SENI limit:

1. The emergency either:
   • seriously endangers the lives, health, or safety of Canadians or
   • seriously threatens the ability of the Government of Canada to preserve the sovereignty, security, public order, or territorial integrity of Canada
2. The emergency would also:
   • have a pan-Canadian impact
   • require a coordinated multi-departmental approach to acquire goods and services
   • be accompanied by a triggering event (such as a pandemic, a declaration of war, or a declaration of a state of emergency)
   • exceed the capacity of public institutions to respond using existing emergency and exceptional authorities due to the complexity and evolving nature of the emergency over a prolonged period
   • be sustained (while there is no minimum amount of time for an emergency to be considered a sustained emergency, the term “sustained” refers to the emergence of new, distinct, and unforeseen requirements as the emergency progresses)

Note: The use of a SENI limit does not require a declaration under the Emergencies Act. In addition, a declaration under the Emergencies Act does not require that the SENI limit be requested or used.

See Appendix A: Examples of a SENI in this document for examples of potential scenarios where a SENI limit could be approved.

Only the minister responsible for PSPC or SSC can request approval to use the SENI limit when their department is unable to implement the government’s response to a SENI within their current authority.

The request should be in the form of a written letter.

To support a decision by the President, the minister’s written request should include at minimum:

• an indication of the value of the contracts that may be entered into using the SENI limit
• details of consultations with other jurisdictions (if applicable)
• the requested effective period for the SENI limit (along with a detailed justification if the request is for more than one year)

The President of the Treasury Board does not approve whether there is an emergency. Instead, the President can approve the use of the SENI limit by the minister responsible for PSPC or SSC. 

See Appendix B: Steps to seek approval for a SENI limit in this document for additional information.

As part of their review of a request to use the SENI limit, the President of the Treasury Board would be supported by officials at the Treasury Board of Canada Secretariat (TBS). In addition, the President may engage any other ministers, body (such as a Cabinet committee), or experts that the President sees fit. Timing will be determined by the nature of the emergency and the extent of the consultations.

The President will communicate their decision in a written response to the requesting minister and include the following conditions:

• The effective period of the approval, noting that extensions can be granted based upon a subsequent written request.
• Contract reporting, including the frequency of reports, is to be provided to the Assistant Secretary, Government Operations, and that the reports are to include the information in Appendix C.
• Lessons learned report is to be provided to Assistant Secretary, Government Operations Sector within three months after the expiry of the SENI limit, including any extensions, and that they include the information set out in Appendix D. The purpose of this report is to help inform any adjustments that may be needed to the SENI limit or to this guidance.

The President may set other conditions.

During a SENI, all departments remain responsible for fulfilling legal and policy responsibilities, including but not limited to:

• sound stewardship of public resources
• security requirements
• official languages
• the integrity of suppliers
• respect for Indigenous rights
• properly invoking any applicable trade or policy exceptions (for example, trade agreements generally include exceptions related to public safety, national security, and extreme urgency)

The use of the SENI limit does not remove these obligations.

During a SENI, all departments are required to be responsive within a responsible timeframe for due diligence and for controlling public expenditures. As required by the Directive on the Management of Procurement, the circumstances, rationale, and process for decision-making must be well documented to ensure proper accounting for the decisions made during the SENI, including any non-standard applications of Treasury Board policy. This information will facilitate the work of oversight bodies such as the Office of the Auditor General.

All departments are reminded that, in accordance with the Access to Information Act and the Guide to the Proactive Publication of Contracts, contracts over $10,000 must continue to be proactively published during a SENI. Departments are expected to be as transparent as possible without compromising national security or personal information.

PSPC or SSC should expect to provide TBS with a report on their use of the SENI limit every six months, unless otherwise decided by the President.

Depending on the SENI, further details about what data elements to use, the format of the report, and the reporting frequency may be set out in the President’s response. These requirements may be provided or modified by the Secretary of the Treasury Board.

See Appendix C: Data elements for SENI contract reporting in this document for additional information.

The purpose of the lessons learned report is to analyze how PSPC or SSC has used the SENI limit, which will inform future SENI responses and potential adjustments to the limit or the guidance.

This report should consider the broader scope of the emergency period with respect to contracting authorities. This may include how the evolution of the emergency situation contributed to any changes in the volume or value of contracts entered into by either PSPC, SSC, or client departments throughout the SENI period.

The report should also state whether PSPC or SSC would require similar authorities in the future or whether internal improvements in capacity and familiarity with expedited procurement processes decreased the ongoing need for higher-dollar value emergency procurements in response to the SENI.

Contracting data, including the number of contracts entered into by the department under the SENI limit that exceeded their basic contracting limits as set out in Appendix A.1 of the Directive on the Management of Procurement, should be provided as part of the report package.

See Appendix D: Lessons learned report for the elements that PSPC or SSC would be expected to provide in a lessons learned report.

Extensions to the use of the SENI limit may be approved through a subsequent written request to the President of the Treasury Board from either the minister responsible for PSPC or SSC.

The request should be submitted no later than one month before the expiration of the SENI limit to ensure no lapse or break in authority.

An extension request should include:

• a rationale outlining that the government’s response to the emergency continues to necessitate the use of the SENI limit
• the period of the extension being sought
• a description of the anticipated goods or services that will be contracted for
• why the use of the SENI limit will be needed to complete these procurements

This process will also provide an opportunity to review the progress of the emergency and the appropriateness of extending the SENI limit or allowing it to expire.

Yes. Under the existing provisions in the Directive on the Management of Procurement, PSPC and SSC have the authority to limit contractor liability, including indemnifying contractors from risk within their control in a pressing emergency contracting situation with the chief financial officer’s (CFO) approval.

No. However, if the department does not have enough incremental funding, the President of the Treasury Board has the delegated authority to allocate funding from the Treasury Board Central Vote to support urgent and unforeseen cash requirements associated with a SENI. This would remove the immediate need for revised Estimates to be approved.

To request access to Treasury Board Vote 5, the CFO of the organization seeking such funds should include the following in a written request to the Secretary for consideration by the President of the Treasury Board:

• an indication of support from their responsible Minister
• the amount of Treasury Board Vote 5 access being sought
• the approved source of funds to support the request
• a supporting rationale to demonstrate the organization will not have sufficient voted authorities to meet contracting requirements (cash flow for the vote from which payments will be made to PSPC or SSC, for example)
• the plan to seek eventual Treasury Board and Parliamentary approval of funds to repay the Treasury Board Vote 5 allocation should a valid supply authority from Treasury Board not yet exist
• an indication of risks, outstanding approvals or any other considerations that may be appropriate to flag

If a department foresees that it will need additional funding at the outset, the above information should be included in the letter requesting approval to use the SENI limit. This information should be in an attachment to the letter with a certification by the organization’s CFO that no other funds are available.

If the request for additional funding is for a department other than PSPC or SSC, the request should be submitted separately to TBS.

The President has the delegated authority to include an item in the Estimates to support the repayment of a Treasury Board Vote 5 request for a SENI should no pre-existing authority be in place.

The lessons learned report should include the elements listed in Appendix D of this guide.

Further questions can be directed to the  Treasury Board of Canada Secretariat Public Enquiries.

Note: If regular contact methods are not possible due to the nature of the SENI, use the continuity of government process for your department.