Eligibility for Indigenous procurement set aside

On this page

• About the Indigenous procurement set aside
• Who is eligible
• Proof of eligibility
• Requirements for bidders in the Set-Aside Program for Indigenous Business
• Business ownership requirements
• Certification of requirements for the Set-Aside Program for Indigenous Business
• Appendix A: Factors to determine Indigenous ownership
• Owner - employee certification form
• Contact us

About the Indigenous procurement set aside

A mandatory set-aside is used for procurements that are destined for an area, community or group in which Indigenous people make up at least 51% of the population and where the Indigenous population will be the recipient of the good, service or construction.

Who is eligible

An Indigenous business, which can be:

• a band as defined by the Indian Act
• a sole proprietorship

or

• a limited company
• a co-operative
• a partnership
• a not-for-profit organization in which Indigenous persons have at least 51% ownership and control,

or

• a joint venture consisting of 2 or more Indigenous businesses or an Indigenous business and a non-Indigenous business, provided that the Indigenous business or businesses have at least 51% ownership and control of the joint venture. The bidder must certify in its submitted bid that it is an Indigenous business or a joint venture constituted as described above.

For more information on the eligibility requirement, consult: Contracting Policy Notice 1996-6

Proof of eligibility

For this program, business owners must be Indigenous: First Nations, Inuit or Métis and ordinarily resident in Canada.

Evidence of being an Indigenous person will consist of such proof as:

• Indian registration in Canada
• membership in an affiliate of the Métis National Council or the Congress of Aboriginal Peoples, or other recognized Indigenous organizations in Canada
• acceptance as an Indigenous person by an established Indigenous community in Canada
• enrolment or entitlement to be enrolled pursuant to a comprehensive land claim agreement, or membership or entitlement to membership in a group with an accepted comprehensive claim

Evidence of being resident in Canada includes a provincial or territorial driver's licence, a lease or other appropriate document.

Requirements for bidders in the Set-Aside Program for Indigenous Business

In respect of a contract, (goods, service or construction), on which a bidder is making a proposal which involves subcontracting, the bidder must certify in its bid that at least 33% of the value of the work performed under the contract will be performed by an Indigenous business.

Value of the work performed is considered to be the total value of the contract less any materials directly purchased by the contractor for the performance of the contract. Therefore, the bidder must notify and, where applicable, bind the subcontractor in writing with respect to the requirements that the Indigenous Set-Aside Program may impose on the subcontractor or subcontractors.

The bidder's contract with a subcontractor must also, where applicable, include a provision in which the subcontractor agrees to provide the bidder with information, substantiating its compliance with the program and authorize the bidder to have an audit performed by Indigenous Services Canada (ISC) to examine the subcontractor's records to verify the information provided. Failure by the bidder to exact or enforce such a provision will be deemed to be a breach of contract and subject to the civil consequences referred to in this document.

As part of its bid, the bidder must complete the Certification of Requirements for the Set-Aside Program for Indigenous Business (certification) stating that it:

• meets the requirements for the program and will continue to do so throughout the duration of the contract
• will, upon request, provide evidence that it meets the eligibility criteria
• is willing to be audited regarding the certification
• acknowledges that if it is found not to meet the eligibility criteria, the bidder shall be subject to one or more of the civil consequences set out in the certification and the contract

It is not necessary to provide evidence of eligibility at the time the bid is submitted. However, the business should have evidence of eligibility ready in case it is audited. The civil consequences of making an untrue statement in the bid documents, or of not complying with the requirements of the program or failing to produce satisfactory evidence to ISC regarding the requirements of the program, may include:

• forfeiture of the bid deposit
• retention of the holdback
• disqualification of the business from participating in future contracts under the program
• termination of the contract

In the event that the contract is terminated because of an untrue statement or non-compliance with the requirements of the program, ISC may engage another contractor to complete the performance of the contract and any additional costs incurred by ISC shall, upon the request of ISC, be borne by the business.

Business ownership requirements

Evidence of ownership and control of an Indigenous business or joint venture may include:

• incorporation documents
• shareholders' or members' register
• partnership agreements
• joint venture agreements
• business name registration
• banking arrangements
• governance documents
• minutes of meetings of Board of Directors and Management Committees
• other legal documents

Ownership of an Indigenous business refers to "beneficial ownership" such as who is the real owner of the business. ISC may consider a variety of factors to satisfy whether Indigenous persons have true and effective control of an Indigenous business.

See Appendix A for a list of the factors which may be considered by ISC.

Subcontracts

Evidence of the proportion of work done by subcontractors may include contracts between the contractor and subcontractors, invoices, and paid cheques. Evidence that a subcontractor is an Indigenous business (where this is required to meet the minimum Indigenous content of the contract) is the same as evidence that a prime contractor is an Indigenous business.

Certification of requirements for the Set-Aside Program for Indigenous Business

A bidder who submits, under this program, a bid or proposal in response to a solicitation must complete and submit this certification. Failure to submit this certification will result in the proposal's being found non-compliant.

1. i) I, _________________________________________ (Name of duly authorized representative of business) hereby certify that ______________________________ (Name of business) meets, and shall continue to meet throughout the duration of the contract, the requirements for this program as set out in the attached document entitled "Requirements for the Set-Aside Program for Indigenous Business", which document I have read and understand.

ii) The aforementioned business agrees to ensure that any subcontractor it engages with respect to the contract shall, if required, satisfy the requirements set out in "Requirements for the Set-Aside Program for Indigenous Business."

iii) The aforementioned business agrees to provide to ISC, immediately upon request, information to substantiate a subcontractor's compliance with this program.

Please check the applicable box:

2. i) The aforementioned business is an Indigenous business which is a sole proprietorship, band, limited company, co-operative, partnership or not-for-profit organization, [ ]

OR

ii) The aforementioned business is a joint venture between 2 or more Indigenous businesses or an Indigenous business and a non-Indigenous business. [ ]

3. The aforementioned business agrees to immediately furnish to ISC, such evidence as may be requested by ISC from time to time, corroborating this certification. Such evidence shall be open to audit during normal business hours by a representative of ISC, who may make copies and take extracts from the evidence. The aforementioned business agrees to provide all facilities for audits and to furnish information requested by ISC with respect to the certification.

4. It is understood that the civil consequences of making an untrue statement in the bid documents, or of not complying with the requirements of the program or failing to produce satisfactory evidence to ISC regarding the requirements of the program, may include:

• forfeiture of the bid deposit
• retention of the holdback
• disqualification of the business from participating in future contracts under the program
• termination of the contract

In the event that the contract is terminated because of an untrue statement or non-compliance with the requirements of the program, ISC may engage another contractor to complete the performance of the contract and any additional costs incurred by ISC shall, upon the request of ISC, be borne by the aforementioned business.

5. Date _____________________

Signature ______________________________________

Place ____________________

Title (duly authorized representative of business)

______________________________________

For: (name of business)

_______________________________________

Appendix A: Factors to determine Indigenous ownership

Factors that may be considered in determining whether Indigenous persons have at least 51% ownership and control of an Indigenous business include:

• capital stock and equity accounts, such as preferred stock, convertible securities, classes of common stock, warrants, options
• dividend policy and payments
• existence of stock options to employees
• different treatment of equity transactions for corporations, partnerships, joint ventures, community organizations, cooperatives
• examination of charter documents, such as the corporate charter, partnership agreement, financial structure
• concentration of ownership or managerial control in partners, stockholders, officers trustees and directors based definition of duties
• principal occupations and employer of the officers and directors to determine who they represent, such as banker, vested ownerships
• minutes of directors meetings and stockholders meetings for significant decisions that affect operations and direction
• executive and employee compensation records for indication of level of efforts associated with position
• nature of the business in comparison with the type of contract being negotiated
• cash management practices, such as payment of dividends - preferred dividends in arrears
• tax returns to identify ownership and business history
• good will contribution or contributed asset valuation to examine and ascertain the fair market value of non-cash capital contributions
• contracts with owners, officers and employees to be fair and reasonable
• stockholder authority, such as appointments of officers, directors, auditors
• trust agreements made between parties to influence ownership and control decisions
• partnership and the allocation and distribution of net income, such as the provision for salaries, interest on capital and distribution share ratios
• litigation proceedings over ownership
• transfer pricing from non-Indigenous joint venture
• payment of management or administrative fees
• guarantees made by the Indigenous business
• collateral agreements

Owner - employee certification form

1. I, ________________________________________________, am an owner and/or full-time employee of_____________________________________, and an Indigenous person, as described in the document "Requirements for the Set-Aside Program for Indigenous Business".

2. I certify that the above statement is true and consent to its verification upon the request of ISC.

Date ___________________

Signature of owner or employee

________________________________________________________

Place ___________________

Contact us

10 Wellington Street, room 1105
Gatineau QC  K1A 0H4
Tel: 1-800-400-7677
Fax: 819-956-9837
Email: IndigenousProcurement@canada.ca