Fact Sheet - Request for Standing Offer for Accommodation Services

The Government of Canada (GC) is streamlining and transforming its procurement approach to provide better value for Canadian taxpayers. The goal of procurement transformation is to improve the design, management and delivery of procurement across government so that the government becomes not only a better buyer, but a better customer.

As part of this transformation, the government is inviting suppliers of accommodation services to compete for standing offers. Once awarded, standing offers allow the government to call on pre-qualified suppliers if and when their services are needed, based on an agreed price.

The government will reach its goal in keeping with the following commitments:

• Ensuring increased transparency and accountability in the procurement process;
• Making it easier and less costly for suppliers to do business with government;
• Improving access for SMEs to compete for procurement;
• Considering economic and social impacts (Aboriginal, regional and environmental);
• Consulting with affected industry sectors.

What is the current situation for Accommodation Services?

Each year, PWGSC solicits discounted, non-commissionable room rates from hotels, motels and other similar commercial properties in Canada, the USA and other countries worldwide. These discounted rates are published in the Accommodation Directory for Government Employees. National Master Standing Offers are usually issued to an estimated 2,000 hotels around the world.

The GC Accommodation Directory is currently open to any property that meets the mandatory requirements. For example, they must be a licensed property, show that they offer clean, safe and comfortable accommodation, and offer the government a rate of less than $200 a night.

What is changing?

A new method of supply has been developed for the Accommodation Program, and a number of “Select Markets” have been identified where the new method will be applied:

The downtown areas of Calgary, Edmonton, Halifax, Montreal, Ottawa, St. John's, Toronto, Vancouver and Winnipeg, and the airport areas of Montreal, Toronto and Vancouver. Stipulation of boundaries and definition of each Select Market is contained in the new RFSO.

In past years, all suppliers of government accommodation have been sent the same Request for Standing Offer package. For suppliers located outside the Select Markets listed above, the method of supply utilized in the past will not change for the 2007 Accommodation Directory. However, suppliers located within the Select Markets will be sent a different package, with a different method of supply with the goal of consolidating volume.

Additional changes include:

• Reducing and standardizing the type of rooms available to four instead of seven.
• Having an annual rate instead of monthly rates.
• Introducing volume consolidation for increased competition between hotels in the same category.

How will these changes impact the industry?

There will be no impact to small and medium enterprises (SMEs) in non-select markets. All SMEs will get the same treatment as other potential suppliers in the select markets, as long as they are fulfilling the mandatory criteria. Also there is no requirement on the size or capacity of accommodation properties that can bid.

The RFSO will offer a level playing field to both individual properties and corporate owned chain properties. Select markets will likely have individual properties among winning suppliers, which are not corporate owned (chains).

There will be no consolidation of suppliers in non-selected markets ensuring small hotels have an equal opportunity of business.

Supplier Consultations:

A letter was posted on MERX – the Government’s electronic tendering service - and was sent to accommodations suppliers located within the identified select markets ahead of time to inform industry of the changes in the method of supply. The letter spoke of the Government of Canada’s transformation agenda and explained the RFSO process.

A bidders conference will also be held to walk the suppliers through the solicitation document and through the bidding process in detail.

In addition, this approach was introduced through pilots twice in the past two years. While the pilots were not implemented, we were very pleased with the interest demonstrated by industry members in the form of bids received in response to these two requests for proposals.