Fact Sheet - Request For Standing Offers For Printers

November 28, 2006

The Government of Canada 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 printers 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 the supply of printers?

Small, medium and large suppliers have been helping the government meet its printer needs through National Master Standing Offers (NMSOs) for over 14 years. The current NMSO had contributed to a complex environment and did not result in obtaining everyday best value prices for several reasons:

• There are 11 suppliers on the NMSO for printers.
• There are too many models of printers available–over 200 models of printers have been bought from the more than 30 sub-categories of printers on the current NMSOs. The multitude of choices creates confusion among buyers.
• Periodically, requests for volume discounts (RVDs) are undertaken for specific departments, resulting in increased administrative burden for suppliers and the government. (Although volume discounts were obtained through this process, RVDs were not used consistently – less than 25% of the expenditure on printers resulted from using RVDs.) Suppliers who provide everyday best value in the pricing of their printers have no guarantee of business volume.

Generally speaking, large printer manufacturers compete to be listed on the Standing Offer as suppliers and they choose to deliver their printers to government clients across Canada through reseller networks, which include SMEs.

Once suppliers have a Standing Offer with the government, they must then invest resources to market their products across government to obtain business. Having their printer listed as the best value in a category offers no guarantee that a supplier will receive orders. Under the current system, out of the 11 companies that have a standing offer for printers with the government, two suppliers get over 90% of the business volume.

What is changing?

The government is simplifying its approach through standardizing and reducing the different types of printers it buys for general use.

The printer requirement will now be divided into two groups – Group 1 comprising of common or standard equipment, and Group 2 for more specialized equipment.

Standing Offers will be issued to qualifying suppliers for each of the Group 1 Categories, and the process will be the same for each of 9 Sub-Categories of Group 2. It is important to note that a same supplier may bid for multiple categories/sub-categories.

Any supplier within 15% of the Best Value Factor (a combination of total life cycle cost, quality, performance, usability and features) in a specified category or sub-category will qualify to sell that printer to the government for that period for requirements under $25,000.

Environmental considerations have been built into the process. Suppliers must now:

• meet consumables containers recycling program requirements;
• meet hardware take-back and packaging recycling program requirements;
• obtain ISO 9001:2000 and ISO 14001 certification.

And the printers offered must:

• be Energy Star qualified;
• meet eco-labelling certification standards.

Regional distribution and warranty service continues to be required. This will benefit SMEs who participate as agents and re-sellers to fulfill some of the mandatory requirements for sales and support.

Call-up limits will be structured to reward the top-ranked supplier but to manage exceptions where warranted.

At the end of each month, the government will invite suppliers to submit a revised price for their approved products. Only suppliers who offer value to Canadians will qualify to sell to the government for the following month.

Supplier Consultations

Industry consultations were held in the second week of June 2006 and suppliers were asked to provide feedback and comments on the changed procurement approach. Based on the feedback received, PWGSC modified the approach in several ways to allow for more inclusivity. After re-issuing the requirement, additional feedback and comments were received from industry and again PWGSC considered the feedback and modified the approach in several ways. Informal discussions have also been had with industry associations, which has allowed for the presentation of alternative approaches.