12.10.1 Subsection 41(2) of the Financial Administration Act states that the Government Contracts Regulations do not apply to federal or provincial Crown corporations unless the legislation of the Crown corporation specifically requires that it be subject to Subsection 41(1) of the Act. Consequently, the Treasury Board Contracts Directive and relevant policies do not apply to Crown corporations. Arrangements between departments and Crown corporations cannot be contracts in a strictly legal sense (the Crown cannot contract with itself).
12.10.2 Reserved.
12.10.3 Agency status. When a department or agency has been designated as an "agent" of a Crown corporation, the contracting procedures and authority limits of the contracting authority continue to apply. As stated in article 4.2, Related requirements, the contracting authority cannot assume the powers of a Crown Corporation even when undertaking work on its behalf. In practice, the department or the Crown corporation will seek Treasury Board authority when a proposed contract exceeds the limits prescribed in the Contracts Directive.
12.10.4 Contractual arrangements with other governments. There are situations where contracting authorities obtain goods and services from other government entities such as provinces, municipalities and provincial Crown corporations. There are also times when the federal government co-operates with a provincial or municipal body to carry out a project. Usually, these arrangements are embodied in federal-provincial agreements, normally governed by legislation or related to the overall mandate of the federal authority. When this formal federal-provincial relationship is not applicable, a contractual relationship between the federal contracting authority and the other government entity may be appropriate. As called for by article 4.2, all contracting policies, including the dollar limits for contracting (Appendix C),apply to the federal organization.