The current contract does not contain a provision for a penalty per se for cancellation. However, there are two possible scenarios for cancelling the current contract with Lockheed Martin Canada: 1) Terminating the contract for convenience; and 2) Exercising the contract's Exit Plan--Off Ramp. The main intent of the Exit Plan is to provide for a transition, logically after the Census Test in 2004, in the event that Canada decides not to proceed with contracting with Lockheed Martin Canada for the subsequent systems development, hardware procurement, printing and follow-on operations contract. The costs resulting from this scenario would be dependent upon how Canada wanted to move forward. The options are: for Statistics Canada to operate the system developed by the contractor, expected in March 2006, or to totally abandon the developed system.
PWGSC has been advised by Statistics Canada that if the contract were to be cancelled now, it would not be possible for Statistics Canada to deliver a full comprehensive census. Statistics Canada might only be able to collect basic demographic information and only provide population estimates required for the fiscal transfer program. The agency could not provide the information needed by a number of statutes and regulations (Canada pension plan, official languages, multiculturalism, employment equity regulations, etc.) that require a comprehensive census. Statistics Canada is exploring the possibility of re-scoping the contract with Lockheed Martin Canada following the census test. The proposed re-scoping of the contract would permit a comprehensive census to be delivered as well as ensuring that Statistics Canada alone would process the completed questionnaires.
Should Canada terminate the current contract for convenience, the contractor would be entitled to be paid the cost for all completed and partially completed work and capital expenditures, as well as all cost of the termination of the contract including the cancellation of obligations incurred by the contractor. The actual cost would be dependent upon when the contract was terminated and could be as much as the cost to complete the contract. The cost to terminate the current contract could reach $12-15 million.