Research and Development (R&D)

Research and Development (R&D) is a scientific investigation that explores the development of new goods and services, new inputs into production, new methods of producing goods and services, or new ways of operating and managing organizations. That is the wording in the Government of Canada's Industrial and Technological Benefits (ITB) model terms and conditions, which use both the expanded form and the abbreviation R&D.

In Canadian public procurement, R&D appears mainly in defence and security. It covers research contracts that the government buys directly, innovation programs that fund and test new technologies, and policy requirements that push defence contractors to carry out R&D in Canada. Suppliers meet the term in solicitations, contract clauses and program calls for proposals.

The ITB definition of R&D

The ITB model terms are the clearest written definition in Canadian procurement material. They define R&D broadly. The definition reaches beyond products to services, production methods and organizational methods. It is also tied to the ITB policy, so a supplier that claims activity as R&D under an ITB obligation needs to show that the work fits this definition.

The ITB policy applies to defence procurements to incentivize Canadian research and development. The Government of Canada has used it in procurements that include advanced fighter aircraft and remotely piloted aircraft systems, as described in National Defence proactive disclosure material. Contractors can be required to undertake eligible business activity in Canada, and R&D-related activity falls within that.

DRDC, IDEaS and where R&D contracts are posted

Defence Research and Development Canada (DRDC) is Canada's defence science, technology and innovation organization. It develops technical solutions and advice for the Department of National Defence, the Canadian Armed Forces, other federal departments and the wider safety and security community, as outlined on the DRDC Atlantic page. DRDC also leads science and technology investments for assessing emerging threats and for developing or co-developing technological solutions with the United States and other allies.

Public Services and Procurement Canada (PSPC) manages R&D contracts for DRDC and posts the resulting tenders on CanadaBuys, according to DRDC's industry partnerships page. Defence research opportunities are also offered through the Innovation for Defence Excellence and Security (IDEaS) program, as the NORAD modernization research and development page explains. Suppliers who want R&D work should watch both channels.

The POINT pilot and the path from R&D to acquisition

The POINT pilot helps innovations that have finished IDEaS funding move from R&D toward acquisition for operational use by DND and the Canadian Armed Forces. After R&D and testing, DND and the CAF may have an option to acquire the solution. Receiving R&D funding does not guarantee an acquisition contract.

Calls for proposals under these programs can set the criteria, the funding and the minimum technology readiness level (TRL) required at entry for contract-based R&D. The POINT program page sets out how the pilot works. Read each call closely, because eligibility turns on these stated terms.

Intellectual property and other clauses in R&D contracts

PSPC's Standard Acquisition Clauses and Conditions manual includes clauses for contracts involving R&D. In these, Canada requires only the intellectual-property rights needed to operate and maintain the goods and to further develop custom-designed or custom-fabricated goods.

R&D is also named as a contract type affected by certain requirements in Canada's Supply Manual annexes. These include anti-forced-labour clauses that permit termination where the work was produced wholly or partly through forced labour.

What R&D means for a supplier bidding on Canadian contracts

Obligations depend on the solicitation and the contract. Depending on the opportunity, a supplier may need to:

• propose and perform defined R&D work;
• meet specified technical, testing or TRL requirements;
• deliver development results, reports, prototypes or tested innovations;
• comply with the contract's intellectual-property terms;
• show that claimed activity qualifies as R&D under the applicable ITB terms; and
• satisfy any applicable Canadian-content, ITB, labour, reporting or verification requirements.

Not every R&D procurement contains all of these requirements, so confirm the terms in each solicitation. Check CanadaBuys and IDEaS for opportunities, and read the intellectual-property clauses before you price the work.