5.0 Model Contract — Eligibility Criteria for IRB Transactions

• 5.1  Causality — each IRB Transaction shall be one which was clearly and demonstrably brought about by either the Contractor or one of the Contractor's Eligible Parties as a result of a current or anticipated IRB Obligation to Canada. It shall not be one which probably would have been entered into if an IRB obligation had not existed. Causality may be demonstrated to a specific project or more broadly to a company's IRB obligation in general.
• 5.1.1  The responsibility for demonstrating Causality lies with the Contractor or its Eligible Party, not the IRB recipient.
• 5.1.2  Given the large volume of defence procurements, Contractors and their Eligible Parties are often engaged in IRB planning and execution on several projects with IRB obligations. Therefore, causality may be demonstrated to a specific project or more broadly to a company's IRB obligations in general.
• 5.1.2.1  The Contractor or its Eligible Party must demonstrate causality beyond generic statements on the transaction sheet. They should provide a clear statement on Causality, which outlines the details involved in their decision about a procurement or investment activity.
• 5.1.2.2  As IRB activities should make good business sense to the Contractor or Eligible Party, the causality provision does not require that the IRB obligation be a company's only decision-making factor. However, the Contractor or its Eligible Party must show the link between Canada's IRB Policy and their decisions related to the IRB activity.
• 5.1.2.3  As further demonstration of Causality to this Contract, the IRB Authority's written approval for a proposed IRB Transaction shall be obtained prior to the Contractor, on behalf of itself, its Eligible Parties and Canadian recipients, making public announcement, media or press releases related to the proposed business activities. Failure to do so may result in the rejection of the business activity as an IRB under the Contract.
• 5.1.3  The Contractor or its Eligible Parties must provide clear evidence of causality. Failure to provide sufficient evidence of causality will result in the ineligibility of the IRB Transaction.
• 5.1.3.1  Evidence of Causality includes a history of events in the development of an IRB Transaction and any supporting written documentation. Contractors or its Eligible Party should provide as much detailed supporting documentation as possible at the time of the IRB Transaction submission that supports the statement on Causality. This documentation may include but not be limited to: internal emails, official correspondence, meeting notes, corporate presentations, etc. The IRB Authority seeks documentary evidence that links decisions regarding the IRB transaction to the donor's IRB obligation.
• 5.1.4  Wherever possible, the IRB Authority will confirm causality prior to a proposed IRB Transaction being accepted into the contract.
• 5.1.4.1  The IRB Authority reserves the right to validate Causality for any or all IRB Transactions identified in Annex A within one year of Contract Award. The IRB Authority shall submit to the Contractor within one year of Contract Award a written notice, through the Contracting Authority, of the IRB Transactions that the IRB Authority wishes to validate. Once the request is made, the Contractor shall have 60 calendar days to submit a package in support of their Causality claims.
• 5.1.4.2  Should the Contractor be unable to satisfy the IRB Authority that the IRB Transaction has met the Eligibility Criteria, future IRB Credits will not be granted and a substitute IRB Transaction will be sought from the Contractor.
• 5.1.5  Contractors should note that all IRB transactions are subject to annual reporting and verification before IRB credits are confirmed. Should new information arise during verification that seriously calls in to question the Causality of an IRB Transaction, the IRB Authority will review and investigate as soon as possible.
• 5.2  Timing — IRB Transactions shall be implemented within the Achievement Period. IRB Transactions or substitute IRB Transactions identified after the Effective Date will only be accepted provided the activity meets the IRB Eligibility Criteria and does not occur prior to the date of identification of the IRB Transaction.
• 5.3  Incrementality — where an Indirect IRB Transaction is for the purchase of goods or services from a Canadian source, and such goods and services are similar to those that the purchaser had acquired in Canada prior to the date of identification of the IRB Transaction:
• 5.3.1  The CCV of the IRB Transaction shall be determined only with respect to the increase that the IRB Transaction will provide over the average amount of orders placed by that purchaser for those goods or services from the Canadian source during the three years preceding the date of identification of the IRB Transaction.
• 5.4  Eligible Party — IRB Transactions shall be undertaken by an Eligible Party as defined in this Contract. In any case, the Contractor shall be 100% responsible for IRB Commitments, regardless of flow down to Eligible Parties. A list of approved Eligible Parties for the (Insert Project Name) Contract is found in Article 30.