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Approved Project Applications
If your project application has been approved, your company has passed its first milestone under the Strategic Aerospace and Defence Initiative (SADI). With such approval comes a number of responsibilities for successful applicants, and they are explained in detail here.
Contribution agreement
When a project application is approved by the Deputy Minister, Minister of Industry, Treasury Board and/or Cabinet, a detailed contribution agreement is prepared by the Industrial Technologies Office (ITO) in consultation with the recipient.
This contribution agreement is then signed by the successful applicant (now known as the recipient) and the Crown. This legally binding contract outlines the obligations and responsibilities of both parties and the conditions under which payment will be made.
Among other things, the contribution agreement contains provisions concerning:
- regulations regarding a recipient's use of lobbyists;
- anticipated milestones and timelines of a project;
- eligible project costs and the reimbursement of claims;
- the calculation of repayments and a recipient's obligation to repay;
- ITO's right to undertake audits to monitor SADI contributions; and
- the terms outlining what will take place in cases of default.
ITO will manage the contribution agreement and other administrative matters according to the authority authorized by the Minister.
Claims
Project claims are paid based on incurred eligible costs, as per the contribution agreement and must be submitted monthly or quarterly.
In addition, progress reports, which detail both the project work completed and work in progress, must be submitted along with documents that list the eligible costs being claimed.
Project claims must undergo a rigorous verification process to validate the eligibility and accuracy of claimed costs and cost breakdowns.
All projects are subject to being audited to ensure they are in compliance with the provisions outlined by the contribution agreement. Project claims are included in audits.
Repayments
Repayment plan options are limited because ITO takes a standardized formula-based approach to SADI repayments. ITO applies interest charges on overdue repayments.
Repayments, which are based on the gross business revenue of a company or the relevant company division, begin approximately one year after a project's R&D phase has been completed. On average, the repayment period will last 15 years.
Monitoring
ITO monitors a project's progress through detailed status reports submitted by the recipient on a regular basis.
Once a project has been completed, the recipient must submit annual reports on project benefits for the length of the repayment period, as well as financial information relevant to the calculation of repayments. This lets ITO:
- carry out post-contribution monitoring;
- manage the repayment of the contribution after the R&D phase ends; and
- evaluate the effectiveness of the contribution.
Audits
ITO ensures that projects contracted through its programs are monitored, in order to verify compliance with provisions of the contribution agreement.
This monitoring includes audits, a regular function of ITO. Audits may be performed by either government or external auditors. Audits verify various aspects of the obligations under the contribution agreement, including eligible costs claimed, project completion, sales reported and royalties paid.
Audits performed for ITO are consistent with the procedures for contribution audits in the Treasury Board publication, A Guide on the Audit of Federal Contributions.
The Project Portfolio section details R&D projects underway courtesy of SADI repayable contributions.
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