Price the contract sustainably — Canada

Objective: Reconcile the local price schedule, currency, tax basis and delivery assumptions.

Study this companion alongside the shared-method lesson. The country is the target procurement market, not your nationality.

Common to all countries

Build cost from the promised service and then choose the price. Keep price, tax and cash flow distinct. A recoverable tax may affect cash timing differently from an irrecoverable cost. A fixed-price offer exposes the supplier to movements that an expressly permitted revision clause may allocate differently.

Country specific — what to verify — Canada

Federal recourse can involve the Canadian International Trade Tribunal for covered procurements and other mechanisms with different mandates. Check jurisdiction and strict filing limits promptly; discussing a concern with the buyer does not automatically suspend a deadline.

This companion uses federal procurement as the entry point. Provinces, territories, municipalities and other entities have their own arrangements. Identify buyer, trade-agreement coverage and current domestic procurement policies before deciding eligibility.

Apply these points to the dossier

Check the tender’s currency, tax presentation, options, unit-price rules, exchange-rate basis and price-adjustment clauses. For cross-border supply, identify customs and delivery responsibilities and obtain suitable tax or customs advice for unresolved treatment. Do not infer a tax rate from the academy language. Keep the numeric total consistent between schedules, narrative and portal fields.

The federal examples do not replace provincial or territorial rules. Check the buyer, applicable agreements and current procurement policies, including any access or content conditions relevant to the solicitation.

Official entry point: CanadaBuys / AchatsCanada. Reference authority or resource: Public Services and Procurement Canada (PSPC). Technical support, the purchasing office and the review body perform different functions.

Worked example

This is a fictional teaching case. Quantities, prices and contractual conditions below are assumptions for the exercise, not legal requirements or market benchmarks.

The teaching cost is 24,000 currency units and the desired profit is 20% of selling price. A further 3,000 of delivery cost was omitted. The example excludes tax and financing; the actual tender would specify their treatment.

Model answer

The original price is 24,000 ÷ 0.80 = 30,000. At that unchanged price, the corrected cost is 27,000 and profit is 3,000, or 10% of price. Preserving 20% would require 33,750. This calculation supports a pre-submission decision; it does not create a right to increase a signed contract price. A 20% markup on cost would instead have produced 28,800 before the correction.

Put it into practice

Build the price schedule for the case, separating net cost, margin calculation and locally unresolved tax/currency items. Explain how a 10% fall in ordered volume affects fixed cost recovery if no minimum quantity is promised.

Country application. Add a check drawn from the context above and its source to your worksheet. For example, what action follows from this point: “This companion uses federal procurement as the entry point. Provinces, territories, municipalities and other entities have their own arrangements. Identify buyer, trade-agreement coverage and current domestic procurement policies before deciding eligibility.”? A successful answer specifies a verifiable action, an owner and a document or status to check, rather than merely copying the portal name.

Self-check: your document separates official facts, case assumptions and points to confirm. A colleague should be able to find the source and identify the action required before the next commitment. The references below are dated; check their version for each new procurement.