Terms of Reference

The purpose of the terms of reference is to establish the project requirements, define the work to be performed and the components of the contract specifications, and illustrate what the successful results will look like.

Note that some ministries may have their own approved processes and/or templates related to business cases; refer to the ministry links found on the Plan webpage or contact the ministry's Procurement Specialist.

The terms of reference are used as a basis for:

  • Solicitation packages;
  • Submission evaluation criteria;
  • Works/services schedules; 
  • Payment schedules;
  • Post-completion contract evaluations; and
  • Securing of necessary approvals and financing to initiate a contract.

Terms of Reference Content

An effective terms-of-reference document will minimize costly corrections during the course of the contract. While each terms of reference is unique, they typically include the following:

  • Background – a definition of the problem or issue requiring action;
  • Inputs, outputs/deliverables and outcomes/objectives of the assignment;
  • Scope, including deliverables – how they will be measured, to what standards, etc.;
  • Critical success factors – e.g. contractor experience / expertise, technologies, and equipment;
  • Location(s) where the work is required;
  • Time frames – milestones and tentative target dates;
  • Risk assessment – how these may be reduced, and the risk management strategies;
  • Ministry responsibilities, including governance and change management processes;
  • Financial and administration processes;
  • Monitoring and evaluation – the monitoring strategies and the post-contract evaluation process;
  • Communication strategies, including dispute resolution processes;
  • Acquisition process – establish the appropriate process and documentation to acquire what’s needed, which may include purchasing through the responsible government entity (see the Core Policy and Procedures Manual section 6.3.2.a.1), ordering through an existing supply arrangement, competing the opportunity, or direct award;
  • Contingency planning; and
  • A glossary of terms, background information and various appendices.

Note:  Projects cannot be subdivided to avoid policy or trade agreement requirements (see the Core Policy and Procedures Manual section 6.3.2.a.12).  When subdivision of a major project into two or more component parts occurs, the terms of reference and solicitation document for each component should disclose the potential combined scope of the project.

Refer to guidance on defining scope or the following guide that walks through the process of putting together a terms of reference document: