Standing offers and supply arrangements

Standing offers

A standing offer is not a contract. It is an offer from a potential supplier to provide goods or services at pre-arranged prices, under set terms and conditions. Once the government issues a call-up against the standing offer it then becomes a contract.

Types of standing offers

PSPC issues five types of standing offers. The type used depends on the geographical area involved and the number of federal departments or agencies involved. The types are:

• National Master Standing Offer (NMSO), which is used by many departments or agencies throughout Canada
• Regional Master Standing Offer (RMSO), which is used by many departments or agencies within a specific geographic area
• National Individual Standing Offer (NISO), which is used by a specific department or agency throughout Canada
• Regional Individual Standing Offer (RISO), which is used by a specific department or agency within a specific geographic area
• Departmental Individual Standing Offer (DISO), which is used only by PSPC on behalf of specific departments and agencies

When we use standing offers

PSPC uses standing offers to meet recurring needs when departments or agencies are repeatedly ordering the same goods or services. They may be used when a department or agency anticipates a need for a specific purpose and the demand is not known. 

Standing offers are most suited to goods or services that can be clearly defined to allow businesses to offer firm pricing. PSPC issue standing offers when it is determined that this is the best method of supply. Departments and agencies may also establish their own standing offers.

Benefits of using standing offers

The standing offer is a convenient method of supply that saves time and money. Once a standing offer is issued, the department or agency deals with you directly to obtain the goods or services they need. Some benefits to standing offers include:

• Their call-ups against a standing offer are processed faster
• They involve less paperwork 
• They have pre-set prices and terms
• They have lower government administrative costs
• They have reduced inventory

How and when standing offers are issued

The process of issuing a standing offer is subject to the normal contracting policies and procedures, including procedures required under the trade agreements. You bid on standing offers in the same way you bid on other bid solicitations. 

There is no set rule as to when standing offers are issued. Generally, they are issued at the start of the federal government's fiscal year (April 1 to March 31) but there are many exceptions. The procurement process for a standing offer starts long before the issue date, depending on the nature and difficulty of the requirement, so it is important to watch for Requests for Standing Offers that may be published several months before the anticipated effective date of a standing offer.

> Access the weekly updated Standing Offers and Supply Arrangements data

Once a standing offer is issued

Goods or services covered under a standing offer are ordered using a call-up document. This document is an acceptance of the standing offer and it than becomes legally binding. It serves as a notice to the supplier to deliver the goods or to provide the service. A separate contract is entered into each time a call-up is made against a standing offer.

Important: There is no contractual obligation on either party until a call-up is made.

Financial limitations

Individual call-ups are limited to a maximum total dollar value as specified in the standing offer.

Standing offers with more than one supplier

Standing offers can be arranged with more than one supplier for the same goods or services. This way we can be sure that goods or services will always be available.

Supplier debriefing

If you bid on a standing offer and are not successful, ask for a debriefing. We will tell you who won and why and how you can improve future submissions.

> Find out how to follow up on a bid

Supply arrangements

A supply arrangement is a method of supply used by PSPC to procure goods and services. Like standing offers, it is not a contract and neither party is legally bound as a result of signing a supply arrangement alone.

Supply arrangements include a set of predetermined conditions that will apply to bid solicitations and resulting contracts. They allow client departments to solicit bids from a pool of pre-qualified suppliers for specific requirements. Many supply arrangements include ceiling prices which allow client departments to negotiate the price downward based on the specific requirement.

PSPC can issue supply arrangements for national or regional use by departments or agencies. The geographic range and intended users are outlined in the supply arrangement.

When we use supply arrangements

PSPC uses supply arrangements when goods or services are bought on a regular basis but when a standing offer is not suitable because of variables in the resulting call-ups. Individual requirements are either procured on a competitive basis or negotiated based on a specific requirement.

Why we use supply arrangements

PSPC uses supply arrangements to save time and money by prequalifying suppliers and establishing the basic terms and conditions that will apply to a specified range of goods or services. They also give client departments the flexibility to either solicit bids competitively or negotiate for their specific requirements to obtain the best value possible.

How and when supply arrangements are issued

Supply arrangements are generally issued following a Request for Supply Arrangement (RFSA) process that have been posted on CanadaBuys. Except for those procurements where public advertising is not required or used. 

Businesses that are interested in responding to bid solicitations are invited to submit an arrangement to become pre-qualified suppliers. The list of pre-qualified suppliers is used as a source list for the procurement and only suppliers who are pre-qualified at the time individual bid solicitations are issued are eligible to bid.

Just as for standing offers, there is no set rule as to when supply arrangements are issued. Generally, it is important to watch for RFSAs that may be published several months before the anticipated effective date of a supply arrangement.

> Access the weekly updated Standing Offers and Supply Arrangements data

Award of a contract resulting from a supply arrangement

Either PSPC or client departments prepare contracts within the scope of the supply arrangement. There are two ways a bid is solicited depending on the requirements:

• For requirements that are not subject to the trade agreements, bids are solicited only from qualified suppliers that have a supply arrangement
• For requirements that are subject to the trade agreements, a Notice of Proposed Procurement is published on Tender opportunities, an RFSA is issued, and bids are evaluated and a supplier is selected

Supply arrangements include a set of predetermined conditions that apply to all following bid solicitations and contracts. Only the specific client department requirements and price must be agreed upon. When the competitive process is not used, and ceiling prices are set within the supply arrangement, client departments generally negotiate a lower price or rate from the stated ceiling prices based on the actual work or commodity required.

Contractual obligations

No legal contract exists, so there is no obligation for the department or agency to buy until the supplier has submitted its bid and it has been accepted. Each contract awarded is considered to be a legally binding contract established between the client department and the supplier.

Financial limitations

Contracting officers will set the contracting limits for the client department as defined in the supply arrangement. For goods, services or construction, they may set the maximum contracting limits using the Treasury Board Contracts Directive (Appendix C) as a guide.

More information

For more information about standing offers or supply arrangements, contact your nearest Procurement Assistance Canada regional office.