Contractor

A contractor is a legal entity, person, joint venture or company that has entered into a contract to provide goods, services or construction. Public Services and Procurement Canada (PSPC) uses this definition in its Policy on Social Procurement.

In Government of Canada contract terms, the contractor is the person or entity named in the contract to supply goods, services, or both to Canada. The word describes a supplier that has moved past the bidding stage and holds a signed agreement. It is defined in the general terms and conditions for low-complexity goods and services contracts.

Who counts as a contractor under federal definitions

The federal definition is broad on purpose. A contractor can be an incorporated company, an individual, or a joint venture formed by two or more parties. What makes a party a contractor is the signed contract, not its size or legal structure. The contract can cover goods, services, construction, or a combination.

The same low-complexity terms state that the contractor is an independent contractor. It is not an employee or agent of Canada. This keeps the contractor responsible for its own staff, methods and business risk.

Contractor, vendor and contracting authority

Three related terms appear throughout federal procurement documents, and each describes a different role.

• Vendor: a person or legal entity that submits a bid, offer or arrangement, or that has been awarded a contract. A vendor becomes a contractor once a contract is in place. The definition appears in the Code of Conduct for Procurement.
• Contracting authority: the person authorized to enter into a contract on behalf of Canada. The contractor deals with this official on contract matters. See the Code of Conduct for Procurement.
• Contractor: the supplier that has entered into the contract with Canada.

Treasury Board procurement policy assigns contracting authorities the responsibility for conducting procurements for departments or agencies and for establishing contracts and contractual arrangements. The Treasury Board policy sets out that framework.

Prime contractors and subcontractors

A prime contractor is the principal contractor that holds the contract and may engage subcontractors. A subcontractor receives part of the contract from the prime contractor or from another subcontractor. Canada contracts with the prime contractor, not with the subcontractors.

PSPC task-based supply-arrangement clauses make this clear. Where Canada consents to subcontracting, the contractor remains responsible for performing the contract. The contractor is responsible for matters or things done or provided by its subcontractors and must pay them for the work they perform. Canada is not responsible to those subcontractors.

Obligations that come with being the contractor

Becoming the contractor means complying with the signed contract and its clauses and conditions. That includes invoicing requirements, subcontracting rules, and any technical or security requirements set out in the solicitation or resulting contract.

Supplier conduct also applies. The Code of Conduct for Procurement covers vendors and their subcontractors that respond to solicitations or provide goods and services where PSPC is the procurement authority.

Federal guidance on sourcing states that contractors should, whenever possible, be selected through a competitive process, subject to exceptions under the Government Contracts Regulations. The CanadaBuys sourcing strategy guidance describes this approach.

What it means for a supplier bidding on Canadian public contracts

A winning bid makes your business the contractor, and the responsibility for delivery falls on you. If you plan to use subcontractors, price and manage them as part of your own performance, because Canada looks to you for their work and you pay them. Read the contract clauses and the supplier-conduct requirements before you submit, and confirm you can meet any technical or security conditions in the solicitation.