ARTICLE · 09 MAY 2014

Canada Overhauls Its Offsets Program

Dentons Canada LLP

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PWGSC and the Department of National Defence recently announced the launch of a new Defence Procurement Strategy.

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Public Works and Government Services Canada (PWGSC) and the Department of National Defence recently announced¹ the launch of a new Defence Procurement Strategy which will overhaul Canada's Industrial Regional Benefits (IRBs) Policy in a stated effort to better leverage military procurements to provide economic benefits to Canadian industry. Going forward, IRBs and the IRB Policy will be rebranded as Industrial and Technological Benefits (ITB).

The IRB Policy required companies bidding on certain defence and security contracts to undertake business activities in Canada valued at 100 percent of the awarded contract. The new strategy retains this reinvestment requirement but certain industrial considerations (termed "Value Propositions") will now be rated and weighted as part of the bid evaluation process. This marks a significant change from the IRB Policy pursuant to which IRB requirements were evaluated on a pass-fail basis.

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