Companies that bid on defence and Canadian Coast Guard contracts are well aware of Canada's Industrial and Regional Benefits (IRB) Policy, which requires them to undertake business activities in Canada that are valued at 100 percent of the prime contract with Public Works and Government Services Canada. Under Canada's new Defence Procurement Strategy, IRBs, now called "Value Propositions for Industrial Technological Benefits (ITBs)," will, for the first time, be a rated requirement in the evaluation of a bidder's proposal. This means that bidders with an otherwise competitive bid are now exposed to losing to a competitor whose bid contains a stronger Value Proposition. The rules are still being developed and therefore bidders would be well advised to keep abreast of the implementation of this new rated requirement. Bidders should ensure that they understand up front the Value Proposition requirement in the solicitation document as well as rules for challenging it, if necessary. Finally, Canada's new Integrity Provisions will now apply to prime contractors that flow down some of their offset requirements to subcontractors; prime contractors would therefore be well advised to ensure that their subcontractors are willing and able to sign onto terms similar to those set out in the Integrity Provisions. Failure to do so could result in the termination of the contract and imposition of damages very unfavourable to the prime contractor.
All of these issues are discussed in the presentation to the European Countertrade and Offsets Club to be given in Vienna, on November 20, 2014
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