Here is a comprehensive summary of the key treaties, agreements, and MOUs that govern and enable U.S. Department of War (U.S. DoW) acquisitions from Canada and Canadian access to the U.S. DoW market.
Defence Production Sharing Agreement between Canada and the United States of America
The Defence Production Sharing Agreement (DPSA) is a Canada-United States framework that helps Canadian businesses sell defence-related goods and services to the U.S. DoW. Under the DPSA, Canadian suppliers can compete for eligible U.S. DoW contracts.
Objectives
- Promote greater integration and standardization of military development and production between Canada and the U.S.
- Establish Canada as a trusted defence procurement partner, giving Canadian suppliers equal consideration in U.S. DoW bidding processes.
- Define reciprocal procedures to facilitate defence procurement by each country through the Canadian Commercial Corporation.
Description of the program
What the DPSA covers:
- Applies to contracts “for supplies and services” placed by U.S. military departments with CCC on or after October 1, 1956 – generally over the Simplified Acquisition Threshold of USD $350,000.
- Supports reciprocal procurement practices and procedures, including profit regulations, currency use, audits, and inspection [Defence Production Sharing Agreement]
What the DPSA does not cover:
- Excludes contracts for communication, transportation, utilities, food, clothing, fibres, vessels and vessel refit, small business set-asides, and certain legislated items (e.g. chemical antidotes, naval circuit breakers).
- Does not override Congressionally mandated limitations for national security or export-controlled items.
- Some solicitations may still include Buy American provisions. Always read the solicitation carefully.
Funding
- Funding for this program in Canada is via an annual Parliamentary appropriation to the Canadian Commercial Corporation.
- Under the DPSA, no fees shall be charged to the U.S. DoW or to Canadian businesses supplying goods or services to U.S. DoW.
About CCC’s role
- S. DoW’s designated contracting authority for acquisitions from Canada.
- Ensures standard procurement practices, quality assurance, financial oversight, due diligence, audits, and contract performance assurance.
Who qualifies
- Canadian suppliers of defence-related goods or services through CCC are eligible to participate.
- Contracts exceeding the simplified acquisition threshold of USD $350,000.
How to access support
- CCC provides support to get Canadian businesses registered to sell to the U.S. DoW. under the DPSA
- Canadian businesses submit bids through CCC, which negotiates contracts with U.S. DoW on the company’s behalf.
- U.S. DoW Prime Contractor Service (CCC)
Supersession of prior arrangements
- This agreement amends and supersedes the Canadian Letter of Agreement dated July 1956 and its subsequent amendments, effective October 1, 1956.
Effect and duration
- The agreement is effective from October 1, 1956.
- This agreement will remain in force indefinitely, subject to modification or termination at any time by mutual agreement or to termination six months after receipt by either party of written notice of the intention of the other party to terminate it.
Related Agreements
- Ogdensburg Declaration (1940)
- Purpose: Created the Permanent Joint Board on Defense, the first formal mechanism for military cooperation between the two countries.
- Impact: Set the foundation for integrated continental defense planning.
- Hyde Park Declaration (1941)
- Purpose: Integrated wartime production so Canadian factories could produce goods for U.S. defense needs and vice versa.
- Impact: Marked the start of deep industrial cooperation between the two nations.
- Defence Development Sharing Agreement (1963) – Canada-U.S. agreement supporting research and development projects that meet U.S. DoW requirements.
- National Technology and Industrial Base (1993)
- What it is: A strategic framework that formally integrates Canada (1993) into the U.S. defense industrial base, alongside the United States, the United Kingdom (2017), and Australia (2017).
- Purpose: To strengthen collaboration by promoting interoperability, shared research and development, and secure supply chains for defense programs. It provides a policy foundation for closer industrial integration and coordinated acquisition planning.
- Impact: While it does not override statutory restrictions such as the Berry Amendment or small business set-asides, it underpins streamlined processes and policy alignment. It supports mechanisms like the Defence Production Sharing Agreement (DPSA) and related DFARS provisions, ensuring Canada’s defense industry can contribute to U.S. requirements in a secure and coordinated way.
- A strategic framework that integrates Canada (1993) into the U.S. defense industrial base, alongside the United Kingdom and Australia (added in 2017). It provides a policy foundation for closer industrial integration and coordinated acquisition planning.
Foundational defence industrial agreements
Defence procurement and R&D agreements
Defence Production Sharing Agreement (DPSA) (1956)
- Established in 1956, the DPSA creates a bilateral treaty allowing Canadian suppliers to compete for U.S. DoW contracts on equal terms. The U.S. waives Buy American preferences and import duties for eligible Canadian defense goods.
- CCC acts as the prime contractor for U.S. DoW contracts over USD $350,000.
- The DPSA applies primarily to defense-related parts, components, and subsystems, but excludes items covered by the Berry Amendment, Byrnes-Tollefson restrictions, small business set-asides, and other security-sensitive categories.
Defence Development Sharing Agreement (DDSA) (1963)
- Established in 1963, this Memorandum of Understanding (MOU) between the U.S. DoW and Canada’s Department of Defence Production (now DND) to promote cost-shared collaborative research & development between Canadian firms and the U.S. DoW.
- Innovation, Science, and Economic Development (ISED) acts as the Canadian program lead.
- The DDSA requires that Canadian-led R&D that meets U.S. requirements is jointly funded (minimum 25% by U.S. DoW), and designs adhere to U.S. military standards.