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Consolidated Newfoundland Regulation 1996
Under the authority of the Provincial Preference Act and the Subordinate Legislation Revision and Consolidation Act, the Lieutenant‑Governor in Council makes the following regulations.
1. Short title
3. Prescribed minimum provincial content
4. Calculation of provincial overhead allowance
5. Tender submissions
6. Joint venture
7. Provincial cost of labour
8. Provincial material content
9. Calculation of provincial content
10. Preferred general and sub‑ contractors
12. Records to be kept
1. These regulations may be cited as the Provincial Preference Regulations.
2. In these regulations
(a) "Act" means the Provincial Preference Act;
(b) "Atlantic Province" means any one of Newfoundland, New Brunswick, Nova Scotia or Prince Edward Island;
(c) "manufacturer" means a person representing a business which produces items by manufacturing, processing or assembly of raw or prepared materials to give the products significant new form, qualities, properties or value; and
(d) "minister" means the minister appointed under the Executive Council Act to administer the Act.
Prescribed minimum provincial content
3. (1) For the purpose of section 4 of the Act, the prescribed minimum provincial content factor is 1.5.
(2) For the purpose of section 4 of the Act, where in response to a call for tenders issued by a department, agency, commission or Crown corporation listed in the Schedule, where a qualified bid is received from a bidder based in one of the Atlantic Provinces other than Newfoundland and the estimated cost is consistent with the following thresholds:
(a) in respect of goods, $25,000;
(b) in respect of services, $50,000; or
(c) in respect of construction, $100,000,
the prescribed percentage is 5%.
(3) For the purpose of section 4 of the Act, where a bid from a manufacturer based in Newfoundland is determined to have higher Atlantic Province content than competing manufacturers based in Atlantic Provinces other than Newfoundland, notwithstanding subsection (2), the prescribed percentage is 15%.
(4) In all instances other than those described in subsection (2), for the purpose of section 4 of the Act, the prescribed percentage is 15%.
Calculation of provincial overhead allowance
4. (1) The criteria and value of the criteria that shall be used by the minister to calculate the provincial overhead allowance are as follows:
(a) registration or continuation under the Corporations Act or sole proprietorship or a partnership whose principals are ordinarily resident in the province, 5%;
(b) existence of a permanent office in the province, 5%;
(c) liability in the case of a company for provincial corporate tax or in the case of a sole proprietorship or partnership for provincial personal income tax, 5%;
(d) location in the province of authority for decision making of the bidder in relation to major decisions including major capital purchases, investment of bidder's earning, expansion of the bidder by acquisition of other companies, 10%;
(e) performance in full in the province by the bidder of the following accounting functions:
(i) accounts payable, 5%,
(ii) accounts receivable, 5%,
(iii) payroll, 5%;
(f) payment before tax by the bidder to a head office or affiliate located outside the province of management fees or administrative overhead charges, minus 10%;
(g) in the case of bidders who are contractors or construction companies
(i) location in the province of authority for decision making of the bidder in relation to contracts including quoting for and entering into contracts of whatever value, 10%,
(ii) location in the province of work performed by the bidder for projects tendered in the province in relation to
(A) engineering, 5%,
(B) shop drawings, 5%,
(iii) acceptance of full responsibility by the bidder in the province for estimates on projects bid for in the province, 10%,
(iv) acceptance of full responsibility by the bidder in the province for the purchase and procurement of all goods, materials and services including contracts and subcontracts required for the bidder's office in the province and for projects in the province tendered for by the bidder in the province, 10%,
(v) full responsibility in the province by the bidder of general administration, including the hiring of all personnel for work in the bidder's office in the province or in relation to projects tendered for, 5%,
(vi) utilization by the bidder of the following that are located in the province
(A) auditors or accountants, 5%,
(B) banks, 5%,
(C) solicitors, 2.5%,
(D) maintenance or repair facilities, 2.5%;
(h) in the case of bidders who are manufacturers, processors and other suppliers for government funded bodies
(i) existence of a permanent staff based in the province for
(A) sales, 10%,
(B) servicing, 5%,
(ii) existence of warehousing functions performed in the province either through private or public warehousing facilities, 25%,
(iii) full responsibility in the province by the bidder of general administration including personnel, purchasing and estimating, 10%,
(iv) utilization by the bidder of the following that are located in the province:
(A) auditors or accountants, 2.5%,
(B) solicitors, 2.5%, and
(v) location in the province of authority for decision making of the bidder in relation to contracts including quoting for and entering into contracts of whatever value, 5%.
(2) For the purpose of having a provincial overhead allowance percentage calculated, a person shall submit to the minister the information requested by the minister in the form prescribed by the minister.
(3) The provincial overhead allowance shall be calculated by multiplying the bid price by the total value in relation to the bidder calculated under subsection (1) divided by 1,000.
(4) The minister shall publish on a semi‑annual basis the provincial overhead allowance percentages assigned under this section.
(5) The minister may establish a review board composed of persons that the minister considers appropriate to advise the minister on the calculation of provincial overhead allowance with respect to a particular bidder or with respect to bidders generally.
(6) Where a person appeals in writing to the minister for a review of a provincial overhead allowance percentage, the minister may recalculate the provincial overhead allowance percentage in accordance with this section considering the facts supporting the appeal.
5. (1) Where a provincial overhead allowance percentage has been assigned to a person and the person submits a tender, there may not be an increase made in the provincial overhead allowance percentage of that person for the purposes of that tender on the basis of an appeal after the tender is closed.
(2) Where a provincial overhead allowance percentage has not been assigned to a person and the person submits a tender, the person is permitted a period of 5 days from the tender closing date in which to obtain a provincial overhead allowance percentage.
(3) As a result of an appeal under section 4, there may be a decrease in the provincial overhead allowance percentage of a person before or after a tender is closed.
169/87 s5; 19/92 s1
6. Where a bidder is a joint venture, the provincial overhead allowance is to be calculated in relation to each partner of the joint venture and each partner's provincial overhead allowance percentage shall be prorated according to the partner's interest in the joint venture.
Provincial cost of labour
7. (1) The provincial labour content is to be supplied to the government funded body by the bidder during the tender process and means the estimated dollar value of the cost of labour directly related to and traceable to manufactured, processed or assembled products in relation to
(a) the mining or harvesting of raw material in the province;
(b) the further manufacturing and processing of a raw material or resource in the province; and
(c) the further manufacturing, processing or assembly of a partially manufactured material or component imported into the province for the purpose of further manufacturing, processing or assembly to a level or standard acceptable to meet the tender specifications so long as it is performed by persons normally resident in the province.
(2) For the purpose of subsection (1), the cost of labour respecting manufacturing, processing and assembly means salaries and wages paid to employees for the portion of time that they are directly engaged in manufacturing, processing and assembly activities excluding on‑site installation labour by a general contractor, a subcontractor or supplier or manufacturer and excluding transportation costs for moving prefabricated sections from the manufacturing shop to the construction site.
(3) Where provincial labour costs have been included as a portion of the provincial material content, they are not to be included in the calculation of the provincial labour content.
Provincial material content
8. The provincial material content is to be supplied to the government funded body by the bidder during the tender process and means
(a) the estimated dollar value of raw material mined or harvested in the province; and
(b) the estimated dollar value of material manufactured or processed in the province and purchased for the purpose of incorporation into, packaging or otherwise adding value to a finished product.
Calculation of provincial content
9. The provincial content is to be calculated by totalling the dollar value of
(a) the provincial overhead allowance;
(b) the provincial labour content; and
(c) the provincial material content.
Preferred general and subcontractors
10. Notwithstanding section 9, for the purpose of determining the preferred general contractor and the preferred subcontractor for construction contracts other than fabricating and installation contracts, the provincial content is to be calculated by calculation only of the provincial overhead allowance.
11. Where public works, goods or services are acquired through a project that involves funds provided by the federal government, the public works, goods or services are exempt from the provisions of the Act when the federal funding agency requests the exemption.
Records to be kept
12. (1) A person submitting a bid shall keep a record of the calculation of provincial labour content and provincial material content until at least 90 days after tender opening.
(2) The preferred bidder shall keep a record of the calculation of provincial labour content and provincial material content until at least the final completion of the contract.
13. The Provincial Preference Regulations, Newfoundland Regulation 169/87, are repealed.
Departments, Agencies, Commissions and Crown Corporations for the purposes of subsection 3(2)
Academic Institutions, School Boards and
Schools established under the Schools
Advisory Council on the Economy
Alcohol and Drug Dependency Commission
Department of Development and Rural Renewal
Department of Education
Department of Environment and Labour
Department of Finance
Department of Fisheries and Aquaculture
Department of Forest Resources and Agrifoods
Department of Government Services and Lands
Department of Health
Department of Industry, Trade and Technology
Department of Justice
Department of Mines and Energy
Department of Municipal and Provincial Affairs
Department of Social Services
Department of Tourism, Culture and Recreation
Department of Works, Services and Transportation
Economic Recovery Commission
House of Assembly
Hospital Corporations as defined in the Hospitals Act
Newfoundland Liquor Corporation
Provincial Advisory Council Status of Women
Public Service Commission
Workers' Compensation Commission
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