Indigenous business set-aside (PSIB)

An Indigenous business set-aside is a federal procurement restricted so that only Indigenous businesses may compete for it, under the Government of Canada's Procurement Strategy for Indigenous Business (PSIB). There are two types — mandatory and voluntary — and set-aside solicitations carry specific notice and certification requirements.

What it is

Per CanadaBuys' Buyer's Portal guidance on Indigenous considerations, in support of the Procurement Strategy for Indigenous Business (PSIB) all federal government departments are encouraged to set aside procurements for competition by Indigenous businesses. When a procurement is set aside, the solicitation must include clauses detailing the requirements for Indigenous set-asides — including the definitions of an "Indigenous business" and an "Indigenous person" — and a mandatory certification form with the solicitation package.

Mandatory vs. voluntary set-asides

CanadaBuys describes two types. A mandatory PSIB set-aside applies when the primary recipients or end users of the goods or services are an Indigenous population and the procurement value exceeds $5,000 — in that case the procurement must be set aside under PSIB. The meaning of Indigenous population is set out in Treasury Board Contracting Policy Notice 1996-2, and Indigenous Services Canada is the contact for examples and guidance on mandatory set-asides. A voluntary PSIB set-aside is when the client chooses to restrict any procurement exclusively to qualified Indigenous businesses where qualified Indigenous businesses are known to exist in the marketplace.

Notice and certification requirements

When publishing an NPP or ACAN for a PSIB set-aside, CanadaBuys requires the notice to prominently feature a set-aside statement — for example, for an NPP: "This procurement has been set aside under the federal government's Procurement Strategy for Indigenous Business (PSIB). In order to be considered, a business must certify that it qualifies as an Indigenous business as defined under PSIB and that it will comply with all requirements of PSIB." For each procurement set aside under PSIB, businesses must submit a certification with their offer stating they meet the definition of an Indigenous business on the date the offer was submitted and will continue to meet it throughout the contract duration.

What it means for vendors

If you are an Indigenous business, set-asides shrink your competition to your peer group — watch for the PSIB statement in tender notices, and make sure your certification will hold for the entire contract, not just on bid day. If you are not an Indigenous business, bidding on a set-aside procurement is not an option: only Indigenous businesses as defined under PSIB are eligible, and on a set-aside ACAN only they may challenge the proposed procurement strategy. Treasury Board Contracting Policy Notice 1996-6 (Annex A) addresses collateral arrangements such as guarantees provided through Indigenous business collateral agreements.

Common questions

What qualifies as an Indigenous business under PSIB?

The solicitation itself must insert the definitions of an "Indigenous business" and "Indigenous person", and the business must certify it meets that definition. The programme's historical root is the federal set-aside strategy launched in 1996 under the Treasury Board contracting policy notices noted above; CanadaBuys' Buyer's Portal is the current operational guidance.

Are subcontracts on a set-aside also restricted?

The certification obligation runs through the contract duration, and the Act-level discipline is that the certified Indigenous business must continue to meet the PSIB definition throughout. Detailed eligibility mechanics for specific arrangements are set out in the inserted PSIB clauses of each solicitation — read the certification form and definitions clauses, and direct questions to Indigenous Services Canada.

Where do set-asides appear in the Supply Manual?

Section 4.30.40 of the archived Supply Manual ("Information on the Procurement Strategy for Indigenous Business") required solicitations to carry PSIB information — the same obligation now carried by the Buyer's Portal guidance.

Related definitions

Supplier eligibility & Canadian content · ACAN · Notice of Proposed Procurement · Social procurement