Interdepartmental Agreements

An interdepartmental agreement is an arrangement between a sponsoring department and a participating department that documents the specific roles and responsibilities supporting a particular project. The participating department can be the contracting authority. The Treasury Board of Canada Secretariat sets out this definition in its investment-planning glossary.

The term also appears in Treasury Board payment rules, where it covers agreements under which one federal department provides goods or services to another. These agreements sit between government organizations, so they are not contracts with suppliers. They still shape how federal work is organized, funded and secured before a supplier sees a solicitation.

Roles and Responsibilities Under the Agreement

The core purpose of an interdepartmental agreement is to assign responsibilities. The sponsoring department leads the project, and each participating department takes on defined duties. Where a contracting authority is involved, the agreement records that role, which can include project-specific procurement services and contracting responsibilities.

Earlier federal project-management guidance included a model interdepartmental agreement and required project-management arrangements to be documented in such agreements, memoranda of understanding, or equivalent documentation. Treasury Board guidance applies the term to agreements between federal departments. In specified circumstances it also reaches arrangements with Crown corporations, other orders of government, private-sector entities, or other organizations.

Payment Rules for Interdepartmental Agreements

Treasury Board payment requirements apply to payments made under interdepartmental agreements. When one department provides goods or services to another, the receiving department normally pays after delivery and acceptance of the goods or performance of the services. The Treasury Board payment requirements also state that an agreement providing for an advance payment must document its terms and give a legal basis for the payment.

Advance payments face a firm limit. Under the Directive on Payments, an advance must relate to, and not exceed, the reasonably expected value of the work, goods or services received during that fiscal year. Any excess must be recovered immediately.

Security Requirements Attached to the Agreement

The Treasury Board security framework applies specified provisions to interdepartmental agreements made under subsection 29.2 of the Financial Administration Act. The Directive on Security Management requires applicable security requirements for these agreements to be identified and documented. It also requires security considerations to be built into procurement and into arrangements for sharing information or assets.

Example: Natural Resources Canada Letters of Agreement

Natural Resources Canada uses Interdepartmental Letters of Agreement with other government departments to support partner mandates. Its 2022-23 annual report lists 30 such letters with a combined value of $3,990,117. The report states that most survey contracts issued to private industry resulted from these letters of agreement.

Public Services and Procurement Canada also lists interdepartmental service agreements among the records tied to its institutional programs and activities.

What It Means for a Supplier

An interdepartmental agreement is generally not a bid opportunity or a supplier contract. Your obligations come from the procurement contract, statement of work, security requirements and other solicitation documents issued under the departmental arrangement. Read those documents closely, since the agreement behind them can determine which department buys, who pays and what security terms apply.

The NRCan example shows the practical effect. Work agreed between departments can turn into contracts with private firms, so suppliers who follow the programs of departments that partner with others can see demand before a tender is published.