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What is the Defence Production Sharing Agreement (DPSA)?

The Defence Production Sharing Agreement (DPSA) is a long-standing Canada-United States defence procurement framework that allows the U.S. Department of War (DoW) to acquire eligible supplies and services from Canadian industry through the Canadian Commercial Corporation (CCC). The agreement entered into force on October 1, 1956, and remains in effect.

What the DPSA is

The DPSA provides a framework for defence procurement between Canada and the United States. It supports greater integration of the two countries’ defence industrial bases and facilitates access by Canadian suppliers to eligible U.S. DoW procurement opportunities. The agreement:
  • promotes closer defence production cooperation between Canada and the United States
  • supports greater standardization and interoperability of military equipment and systems
  • establishes procurement procedures for eligible contracts between the U.S. DoW and Canadian suppliers through CCC
  • helps ensure Canadian suppliers receive consideration for eligible U.S. defence requirements

Why the DPSA matters

The DPSA strengthens Canada-U.S. defence industrial cooperation by enabling Canadian companies to participate in the U.S. defence market while providing the U.S. DoW with access to Canadian industrial capabilities. For seven decades, the agreement has helped support an integrated North American defence industrial base and contributes to the broader defence and security partnership between the two countries. Explore the History of Canada-U.S. Industrial Cooperation Agreements

What is covered

The DPSA generally applies to contracts for supplies and services placed by U.S. military departments with the Canadian Commercial Corporation on behalf of Canadian suppliers. The agreement typically applies to procurements exceeding the U.S. simplified acquisition threshold, currently identified in program materials as approximately US $350,000.

The agreement supports common procurement practices and procedures, including:

  • contracting arrangements through CCC
  • pricing and profit provisions
  • audits and financial oversight
  • quality assurance and inspection requirements
  • contract performance assurance

What is not covered

The DPSA does not apply to all U.S. DoW procurements from Canada. Exclusions include:
  • food and clothing
  • communications services
  • transportation services
  • utilities
  • vessels and vessel refits
  • U.S. small business set-aside contracts
  • certain goods restricted by U.S. legislation (Berry Amendment, etc.)
The DPSA also does not override statutory requirements related to national security, export controls, Buy American provisions, or other Congressionally mandated restrictions. Suppliers and procurement officials should review individual solicitations carefully.

The role of CCC

The Canadian Commercial Corporation is the Government of Canada’s designated contracting authority for U.S. DoW acquisitions from Canada under the DPSA. CCC supports defence procurement by:
  • acting as the contracting authority with the U.S. DoW
  • conducting due diligence on Canadian suppliers
  • providing contract management and performance assurance
  • supporting quality assurance, audit and compliance requirements
  • facilitating transactions between Canadian industry and U.S. defence buyers
Under the DPSA, no fees are charged to the U.S. DoW or to Canadian businesses supplying goods or services through the agreement.

Dive deeper to learn how it works

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