Procurement at the Unit Level

EO 002.02.06.a-h
Aim

To provide general guidance and information

on the roles and responsibilities of the Log O
in conducting procurement activities at the
Unit level.

2
 MTPs
Stage 1
MTP 1 - Describe the general rules of procurement.
MTP 2 - Describe the rules of governance over procurement.
MTP 3 - Explain the general rules of Acceptance of Gifts,
Hospitality, and other benefits.

Stage 2
MTP 4 - Explain the rules around the mandatory use of Standing
Offers.
MTP 5 - Explain the rules around the Call-up against a Standing
Offer.
MTP 6 - Explain the general rules of local procurement direct from
trade.

3
 MTPs (cont)
Stage 3

MTP 7 - Explain Procurement by PO.

MTP 8 - Explain the rules of procurement with an
acquisition card.

Stage 4
MTP 9 – Describe AF Supply Chain
MTP 10 – Understand AF Fleet Specific Supply Chain
Challenges

4
 References

A. Supply Administration Manual(SAM)

B. Delegation of Authorities for Financial Administration for
the Department of National Defence and the
Canadian Forces
C. DAOD 7021-3, Acceptance of Gifts, Hospitality and
Other Benefits
D. Financial Administration Manual (FAM)
E. Procurement Administration Manual (PAM)

5
 MTP 1 - Describe the General Rules of
Procurement
 What is Procurement?
 Procurement is the process of obtaining materiel and/or services to satisfy a
requirement using the processes and procedures outlined in the PAM.
 Acquisition Process vs Procurement Process vs Contracting Process

 Rule of Thumb
 Consult your procurement cell (Unit Rep or a centrally managed procurement
cell); and
 Confirm your role before you move any further than the requirement stage.

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 MTP 1 - Describe the General Rules of
Procurement (cont)
 Procurement Process:

 Begins with the identification of the requirement and the approval of

funding;
 Includes all associated contracting, contract management and financial
activities required to satisfy the requirement; and
 Ends when the procurement files, including associated contracting and
financial activities, are closed.

The procurement process has four phases:

1. Pre-contractual phase
2. Contracting phase
3. Contract administration phase
4. Post-contractual phase

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MTP 1 - Describe the General Rules of
Procurement (cont)
 Require a procurement plan if >$25K (it will go to PSPC for bids);
 $5K-25K: paperwork usually sent to Supply, LPO cell, so they can confirm
contracting vehicle to be used:
 3 quotes required;
 There may be pre-arranged contracting vehicles in place i.e. Standing
Offer; and
 Fill out DND 2227 for your requirement;
 Your supporting procurement organization will complete GC111 (PO)
and do the contract for you.

 <$25K (Low Dollar Value Requirement, PAM)

 < $1,000.00
 >$1,000.00 and <$2,500.00 minimum 2 quotes required
 >$2500.00 and <$25,000.00 minimum 3 quotes required
 (all prices include tax, delivery, installation, etc.)
 Take care to avoid contract splitting

8
 MTP 2 - Describe the Rules of
Governance over Procurement
 Procurement in the federal government is legislated and
guided by a number of international and national trade
agreements and acts, as well as policies, directives, and
guidelines provided by Treasury Board (TB), the Treasury
Board Secretariat (TBS) and Public Services and Procurement
Canada (PSPC).
 Assistant Deputy Minister (Materiel) (ADM(MAT)) Procurement
and Contracting Authority is the functional authority within
DND.

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 MTP 2 - Describe the Rules of
Governance over Procurement (cont)
 Must haves for a purchase to be approved:
 Expenditure Initiation and Section 32 of the FAA;
 Coordination with the RC Mgr;
 Procurement must fit into your Unit Business Plan activities or has to go
higher for alternate funding.

10
 MTP 3 - General Rules of Acceptance of Gifts,
Hospitality and other benefits
 IAW DAOD 7021-3 “A DND employee or CAF member must
not, in their public roles, accept any gift, hospitality or other
benefit for themselves or their organization, except in
accordance with the provisions set out in this DAOD. This
includes:
 Free or discounted admission to sporting, cultural or recreational activities;
 Events arising out of an actual or potential business interaction related to their
official duties; and
 Gifts-in-kind or monetary exchanges for the benefit of their organization.

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 MTP 3 - General Rules of Acceptance of Gifts,
Hospitality and other benefits
 Gifts, Hospitality and benefits that can be accepted:
 it is of minimal value;
 it arises out of an activity or event related to the official duties of the DND
employee or the CAF member;
 it is within the normal standards of courtesy, hospitality or protocol;
 it does not compromise or appear to compromise in any way the integrity of
the DND employee or the CAF member concerned or the integrity of the
DND or the CAF;
 the offer is infrequent in nature;

12
 MTP 3 - General Rules of Acceptance of Gifts,
Hospitality and other benefits
 Continued…
 Written approval is required for:
 Accommodations and transportation;
 Culturally representative artwork of more than minimal value;
 An invitation to sporting, recreational event; or
 Any gift-in-kind for a number of members exceeding minimum value
 It arises out of an activity or event related to the official duties of the DND
employee or the CAF member;
 It is within the normal standards of courtesy, hospitality or protocol;
 It does not compromise or appear to compromise in any way the integrity of the
DND employee or the CAF member concerned or the integrity of the DND or the
CAF; and
 The offer is infrequent in nature;

13
 Stage 2

MTP 4 - Explain the rules around the mandatory use of Standing

Offers.

MTP 5 - Explain the rules around the Call-up against a Standing

Offer.

MTP 6 - Explain the general rules of Local procurement direct

from the trade.

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 MTP 4 - Explain Rules/Mandatory
Use of Standing Offers
 As of 11 Oct 18 the PSPC Standing Offers and Supply
Arrangements Application (SOSA App) is the official source for
Government of Canada standing offers and supply
arrangements.
 If a standing offer for the following goods and services has
been issued by PSPC it is mandatory that the SO be utilized
for procurement:

15
 MTP 5 – Explain Rules/Call-Up against a
Standing Offer (SO)
 Supply Arrangement (SA)
 Supply arrangements (SA) are non-binding agreements between PSPC and suppliers
to provide a range of goods and, more commonly, services on an "as required" basis.
They are lists of qualified suppliers for certain services with a set of predetermined
terms and conditions that will apply to subsequent contracts.

 Standing Offer (SO)

 A standing offer is not a contract but an administrative means to provide for the supply
of goods or services at prearranged prices with set terms and conditions, for specific
periods of time on an "as requested" basis.
 SO is not a contract but an admin means to provide goods and services at pre-
arranged prices, set terms and conditions.
 No obligation exists until a call-up (order) is placed with the supplier.
 When a call up is made, there are no negotiations and acceptance by the Crown of
the supplier’s offer is unconditional.
 Pre-arranged prices can be established at the outset. No need to negotiate at time of
call-up.
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 MTP 4 - Explain Rules/Mandatory
Use of Standing Offers (cont)
 Decision process for use of a mandatory SOA (as there are
some exceptions)
 Check to see if there is a contract vehicle in place to satisfy the requirement;
 Search the PSPC SOI site to see if there is an existing PSPC SO or SA to
meet the requirement;
 Compare prices, issue call-up, payment with acquisition card
 If an SO or SA does not exist and the requirement is not in the mandatory list,
purchase the good IAW PAM; and
 To confirm the existence of an SO or SA contact PSPC Help desk

If PSPC confirms an SO/SA exists but doesn’t satisfy the DND requirement
(technical, delivery date, etc.) PSPC will provide an exemption.

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 MTP 4 - Explain Rules/Mandatory
Use of Standing Offers (cont)
 Note: If the requirement will exceed the SOA call-up limit or
the SA contract limit:
 Submit a signed 9200 Req Form to PSPC to request a contract
 Do not split requirement to stay under the call-up or contract limit.

 Operational Exemptions:
 HPR (High Priority Requests) are exempt when:
 Insufficient time to search for SOA/SA supplier;
 SOA/SA supplier can’t meet delivery date; and
 Access to PSPC SOI site or SOA/SA suppliers is not avail during field
Ops.

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 MTP 6 – Explain the Rules of Local
Procurement Direct from Trade
 An individual must have delegated authority indicated in
Transaction/Contracting section of their DOA form.

 The Contracting Authority (CA) may proceed with establishing

a contract for specific goods direct with trade when:
 An existing contract vehicle is not avail;
 The CA has the auth under columns 15, 17, or 18 of their DOA;
 Required goods are listed in the Delegation Document notes for column 15, 17,
or 18; and
 Utilize an approved GOC Purchase Order Form and contain appropriate
standard terms and conditions applicable to the goods or services required.

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 Review of Stage 2

Q1 When does a HPR become exempt from a mandatory

SOA/SA?

Q2 What is a ‘Standing Offer’?

Q3 What must an individual have prior to procuring goods

and services direct from trade?

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 Stage 3

MTP 7 – Explain the Procurement by PO

MTP 8 – Explain the rules of procurement with an

acquisition card

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 MTP 7 – Explain the Procurement by
Purchase Order (PO)
 The Government of Canada Purchase Order (GCPO) or
simply PO is form GC-111

 Instructions for use of PO:

 Complete PO in DRMIS. Not avail use GC-111 on PSPC site;
 Delegated authority approves (LPO)
 Place a copy of the approved LPO on the contract file for audit purposes;
 Provide a copy of the LPO to the receiving and payment office.
 Monitor the delivery of the goods and services and hasten delivery when
required;
 Amend the LPO for changes to the work/delivery on the original LPO and
ensure it is approved by appropriate authority (mbr who signed section 32),
prior to contractor making changes; and
 Certify and process for payment of invoices and claims against the contract
IAW PAM

22
 MTP 8 – Rules of Procurement with an
Payment Card
 A payment card (acquisition card) is a commercial credit card issued under a
contract between a credit card provider and the GOC for procurement and payment
of goods and services
 Control of the cards is the responsibility of the RC Mgrs.
 The issuance of a card is not a delegation of contracting auth.
 Purchases may not exceed the delegated contracting authority of the individual
approving the purchase.
 Used for local purchases generally not exceeding $5,000
 Purchases with a card may be made directly from a merchant without a formal
PSPC or DND contract therefore it should only be used for simple purchases that
don’t require additional terms and conditions other than quantity, price and delivery.

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 Review of Stage 3

Q1 When amending the LPO who must you advise prior to the
contractor making any changes?

Q2 Who is responsible for the control of the payment cards?

Q3 Is the issuance of the payment card the delegation of

contracting auth?

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 Stage 4

MTP 9 – Describe AF Supply Chain

MTP 10 – Understand AF Fleet Specific Supply Chain

Challenges

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 MTP 9

 CAF Supply Chain:

 End-to-end processes from raw materiel, right through to product
receipt by customer, to eventual disposal.
 Dynamic and involves constant flow of goods, materiel and info
between each link from the original supplier to the soldier, and
when consumed, back for storage or repair.
 Provides materiel to the customer/soldier and situational
awareness to the Commander

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 MTP 9 (cont)

 RCAF Supply Chain:

 Needs to be a rapid and assured resupply system;
 Must take into consideration the myriad of different AF Fleet
types;
 Must be flexible and optimize human & materiel resources, as
well as be highly integrated; and
 Provide efficiency and effectiveness to deployed / expeditionary
operations (minimize risks)

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 MTP 9 - AF Supply Chain
Fleet Process Manager Supply Chain IT System Asset Holder DRMIS

Available
L3 Vertex Consumption Pt Movement Plan FMS Yes

Unavailable COLOG
CH-147 Chinook

DND Maint DND Sup DRIMIS Depot Stocked Yes

CP-140 Aurora

DND Main Contract Managed Sup

Contractor embedded Sup Techs MAINTENIX
Supported Contractor
Maint maintained PUK contract Owned Until No
owned and controlled PUK Installed
CH-148 Cyclone DND Maint
MAINTENIX
parts (no sup tech touch)
DND Sup Tech

LM Managed WHSEDND Contractor Owned

DND Maint Sup Thin Front DRMIS Yes
until Receipted by Sup

CC-130 J Hercules

DND Maint DND Sup DRMIS Depot Stocked Yes

CC-130 Hercules
 MTP 9 (cont)
Fleet Process Manager Supply Chain IT System Asset Holder DRMIS

DND/Contractor Boeing Managed WHSE GOLD & DRMIS Contractor Yes

Maint DND Minimal Line in hrs Provided

CC-177 Globemaster III

Bell Coop System Contractor Provided

DND Maint DND Sup No
Spacing

CH-146 Griffon

DND Maint DND Sup DRMIS Depot Stocked Yes

CT-142 Dash-8

DND Maint DND Sup DRMIS Depot Stocked Yes

CH-124 Sea King

DND Maint DND Sup DRMIS Depot Stocked Yes

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CT-114 Tutor
 MTP 9 (cont)
Fleet Process Manager Supply Chain IT System Asset Holder DRMIS
DND Maint DND Sup DRMIS Depot Stocked
Yes
Contractor Maint Contractor Sup DRMIS DND Owned
CF-18 Hornet

Contractor Contractor System Contractor No

Contractor Sup
Maint Owned

CT-155 Hawk

Contractor Contractor System Contractor

Contractor Sup No
Maint Owned

CT-156 Harvard II

DND Maint Contractor Sup DRMIS Depot Stocked Yes

CC-115 Buffalo

Contractor Contractor System

Contractor Sup DND Owned No
Maint

CC-144 Challenger 30
 MTP 9 (cont)
Fleet Process Manager Supply Chain IT System Asset Holder DRMIS

CH-149 Cormorant
Contractor Contractor System Contractor
Contractor Sup No
Maint Owned

CC-150 Polaris
Contractor Contractor System Contractor
Contractor Sup No
Maint Owned

CC-138 Twin Otter

Yes
DND Maint DND Sup DRMIS Depot Stocked

31
 MTP 10
 RCAF Supply Chain Challenges:
 RCAF Supply Chain chart demonstrates that the supply chain for spares
operates on a fleet-by-fleet basis;
 MOB vs Deployed Operations – problems dealing with multiple systems;
 Requirements – IT, Infra, Personnel, Trg, etc; and
 Optimal Handover (between Contractor & DND).

32
 Review of Stage 4

Q1: Describe some key features of the AF Supply Chain?

Q2: What are the areas that would demand Log attention
when dealing with AC Spares?

33