Standing Offers and Supply Arrangements
Standing offers and supply arrangements are two types of non-binding agreements between the federal government and potential suppliers for the supply of specified goods or services. These agreements outline the terms and conditions that will apply to future requirements to be ordered on an "as and when required" basis.
Important New Standing Offer Information for Suppliers
Table of Contents
Standing Offers
What they are
A standing offer is not a contract. It is an offer from a potential supplier to provide goods and/or services at pre-arranged prices, under set terms and conditions, when and if required. No contract exists until the government issues an order or "call-up" against the standing offer and there is no actual obligation, by the government, to purchase until that time.
When they are used
Standing offers are used to meet recurring needs. Common products purchased this way include food, fuel, pharmaceutical and plumbing supplies, tires and tubes, stationery, office equipment and electronic data processing equipment. Common services include repair and overhaul, and temporary help services.
Standing offers are usually considered when:
- one or more departments repeatedly order the same goods or services, but the actual demand is not known in advance; or,
- a need is anticipated for a range of goods or services for a specific purpose, but the actual demand is not known at the outset and delivery is to be made when a requirement arises.
Standing offers are most suited to goods or services that can be clearly defined to allow suppliers to offer firm pricing. Public Works and Government Services Canada (PWGSC) sets up standing offers when it is determined that this is the best method of supply. Departments may also establish their own standing offers.
Why we use them
The standing offer is a convenient method of supply that saves time and money. Once a standing offer is in place, the government department that needs the goods or services, deals with you directly. Call-ups against a standing offer have a faster processing time and reduced paper work because prices and terms have been settled in advance and there is no need for further negotiation. From the taxpayers' point of view, the advantages are lower administrative costs and less need for government departments to carry inventory.
How do I get a Standing Offer?
The process of setting up a standing offer is subject to the normal contracting policies and procedures (including procedures required under the trade agreements). You bid on standing offers the same way you bid on other opportunities (see The Bidding Process). In PWGSC, for example, most Requests for standing offers with an estimated value of $25,000 or more are advertised on MERX™. Some standing offers with an estimated value below $25,000 are tendered using the department's source lists.
When a standing offer is set up with your company, you're offering to provide certain products or services at specified prices over a specified period of time. If and when the government issues a call-up or order against your standing offer, only then do you have a contract for the amount called up or ordered.
Types of Standing Offers
There are five types of standing offers. The type used depends on the geographical area involved (i.e. regional or Canada-wide) and the number of government departments or agencies involved.
- National Master Standing Offer (NMSO) - for the use of many departments or agencies throughout Canada.
- Regional Master Standing Offer (RMSO) - for the use of many departments or agencies within a specific geographic region.
- National Individual Standing Offer (NISO) - for the use of a specific department or agency throughout Canada.
- Regional Individual Standing Offer (RISO) - for the use of a specific department or agency within a specific geographic area.
- Departmental Individual Standing Offer (DISO) - only PWGSC may issue call-ups against this type of standing offer on behalf of specified departments and agencies.
How goods and services are ordered
Goods or services covered under a standing offer are ordered, usually by the customer department and occasionally by PWGSC, using a call-up document. The call-up document indicates acceptance of the standing offer to the extent of the goods or services being ordered and 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.
There is no contractual obligation on either party until a call-up is made
Standing offers are not contracts in the legal sense and either party may withdraw from a standing offer by notification to the other party. However, all call-ups received by a supplier prior to withdrawing are legally binding and must be honoured. Departments order only the goods or services actually required.
Financial limitations
Individual call-ups are limited to a maximum total dollar value as specified in the standing offer.
Are Standing Offers arranged with more than one supplier?
Yes. Standing Offers may be arranged with more than one firm for the same products or services. This way we can be sure that the product/service is available in urgent situations.
Is there a particular time of year when Standing Offers are issued?
There is no set rule as to when standing offers are issued. Generally, standing offers are issued to begin at the start of the federal government's fiscal year (April 1 to March 31) but there are many exceptions. Normally standing offers are in effect for one year but some standing offers cover different periods of time (more or less than one year). Procurement activities for a standing offer start long before the issue date, depending on the nature and complexity of the requirement, so it is important to watch for opportunities which may be published several months before the anticipated effective date of a standing offer.
Debriefing
If you bid on a standing offer requirement and are not successful, ask for a debriefing. We'll tell you who won and why, and where improvements can be made for future submissions. We can also provide you with the individual unit pricing information contained in goods and services standing offers.
Supply Arrangements
What they are
Supply arrangements are non-binding agreements between PWGSC and suppliers to provide a range of goods or, more commonly, services on an "as required" basis. They are lists of qualified suppliers identified as potential sources from which departments can obtain firm price quotations on specific requirements.
Supply arrangements include a set of predetermined terms and conditions that will apply to any subsequent contracts. Supply arrangements allow departments to solicit bids based on their specific scope of work and in this way they differ from standing offers which only allow departments to accept a portion of a requirement already defined and priced. Many supply arrangements include ceiling prices which allow customer departments to negotiate the price downward based on the actual requirement or scope of work.
When they are used
Supply arrangements are used when goods or services are bought on a regular basis but a standing offer is not suitable because of variables in the resulting call-ups (for example, varying methods/bases of payment; statement of work or commodity can't be adequately defined in advance). Individual requirements are either tendered competitively or negotiated based on a specific scope of work.
Why we use them
Supply arrangements 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 departments the flexibility to either negotiate or tender competitively their specific requirements to obtain best value for the scope of work desired.
How do I get a Supply Arrangement?
To establish a supply arrangement, PWGSC prepares and issues a competitive Request for supply arrangement. After the evaluation of bids is completed, qualified suppliers' ceiling prices and contact information are collected and published along with a complete guide for government departments on how to use the supply arrangement.
Types of Supply Arrangements
Supply arrangements can be issued for national or regional use by departments. The geographic range and intended users are outlined in the supply arrangement.
Issuing a contract against a Supply Arrangement
Either PWGSC or user departments create contracts within the scope of the supply arrangement. 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 MERX, to alert other potential suppliers to the opportunity to qualify and submit a proposal for the specified requirement. A Request for Proposal (RFP) is issued, proposals are evaluated and a supplier is selected. The pre-arranged terms and conditions and general requirements of the supply arrangement must form part of the RFP and any resulting contract. Only the specific departmental requirements and price must be agreed upon. Where a competitive bidding process is not used, and ceiling prices are established within the supply arrangement, departments generally negotiate a lower price or rate from the stated ceiling prices based on the actual work or commodity required.
Contractual obligations
A legal contract does not exist and there is no obligation to purchase until the supply arrangement Solicitation/Contract document has been submitted by the supplier and accepted by the ordering department. Each contract issued is considered to be a separate contract established between the ordering department and the supplier.
Financial limitations
Each Supply Arrangement has a maximum contract limitation.
Is there a particular time of year when supply arrangements are issued?
Just as for standing offers, there is no set rule as to when supply arrangements are issued. Generally, it is important to watch for opportunities which may be published several months before the anticipated effective date of a supply arrangement.
For more information
For more information about about standing offers or supply arrangements contact the:
Contracts Canada Information Centre
14A1, Portage III
Gatineau, Quebec, K1A 0S5
InfoLine: 1-800-811-1148
Fax: (819) 956-6123
or your local PWGSC office.
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