Emergency Contracting

Emergency contracting is the use of special contracting authorities to respond to a pressing emergency when normal procurement procedures cannot meet the requirement and a delay in approval would harm the public interest. In the Canadian federal system, it allows a department to enter into a contract, or amend an existing one, without running a formal competitive solicitation.

The Treasury Board Directive on the Management of Procurement describes the authority as entering into or amending a contract in response to a pressing emergency where a delay in approval would be injurious to the public interest. The requirement must be one that cannot be satisfied through normal contracting procedures because of the urgency. The authority is exceptional and comes with approval, trade-agreement and reporting conditions.

What counts as a pressing emergency

Not every tight deadline qualifies. Treasury Board guidance describes emergencies as situations that are normally unavoidable and require immediate action that would preclude soliciting formal bids. According to the 2024 Treasury Board contracting policy notice, a pressing emergency may include:

• an actual or imminent life-threatening situation
• a disaster endangering the quality of life or safety of Canadians
• loss of life
• significant loss of, or damage to, Crown property

The authority is meant to be temporary. Departments are expected to return to fair, open and transparent contracting as soon as practicable, especially when an emergency creates a longer-term requirement.

Emergency contracting limits for federal buyers

The value a department can commit under emergency authority is capped. The CanadaBuys buyer guidance on emergency requirements identifies a limit of up to $25 million for Public Services and Procurement Canada (PSPC) when it enters into a non-competitive emergency contract or arrangement for a client, including itself. That figure includes applicable taxes, fees and amendments.

Other federal departments have a lower ceiling. The Directive on the Management of Procurement sets their emergency contracting limit at up to $3 million, including applicable taxes and fees, subject to stated conditions and approvals. The 2024 policy notice records that the PSPC and Shared Services Canada limits increased from $15 million to $25 million, and that departmental limits increased from $1 million to $3 million.

A separate framework gives PSPC and Shared Services Canada an exceptional contracting limit for emergencies that need a coordinated, multi-departmental response, or that exceed existing emergency and exceptional authorities because of their complexity or duration.

Conditions and reporting

Emergency authority does not remove every compliance requirement. Under the directive, the contracting authority must show that normal procedures cannot satisfy the requirement. It must also invoke the applicable trade-agreement urgency provision or rely on an applicable exemption. The required ministerial or delegated approval must be in place.

Use of the authority must be reported to the Treasury Board Secretariat within 60 days of authorization or the start of work, as set out in the 2024 policy notice. The exceptional authorities themselves trace back to the Government Contracts Regulations.

The COVID-19 example

The COVID-19 response shows the authority in use. Under Contracting Policy Notice 2020-1, PSPC coordinated centralized purchases of commodities such as personal protective equipment for the federal government and for provincial and territorial governments. Departments were told to check with PSPC before running their own procurement for a commodity covered by coordinated purchasing. PSPC also reported using established emergency authorities for urgent logistics and transportation tied to sourcing protective equipment and medical supplies from Asia.

What it means for suppliers bidding on Canadian public contracts

An emergency contract may be non-competitive, so a buyer may approach a supplier directly instead of posting an open tender. Suppliers that want to be considered should be ready to show immediate capacity to deliver the goods or services. The sources set the urgency and authority conditions but do not prescribe a universal supplier application process.

Before responding to a departmental purchase of a centrally managed emergency commodity, check whether PSPC is running a coordinated procurement. Because emergency contracting is temporary, expect longer-term needs that follow an emergency to return to competitive solicitation on CanadaBuys.