Questions and Answers
REQUEST FOR STANDING OFFER – PRINTERS
November 28, 2006
Q1. Why is the government changing the way it procures printers?
A1.The Government of Canada (GC) is streamlining and transforming the way it buys printers.
PWGSC is committed to ensuring that procurement is both accountable and cost-effective, supporting the goals of the GC’s Accountability Act and Action Plan.
The Government of Canada spends more than $22M a year on printers. The proposed Request for Standing Offer (RFSO) for printers is expected to generate significant savings over the next five years.
The goal of this procurement transformation initiative is to ensure better value and accountability for Canadian taxpayers, make procurement simpler, and ensure fair, simple and open access for suppliers – both small and large.
Q2. How is the government currently procuring printers?
A2. 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 does not always result in government buyers obtaining best value prices, for several reasons:
- There are 11 suppliers who hold a NMSO for printers but, because there are so many printers listed and any can be chosen under $25K, suppliers who offer the best value do not always get the business.
- There are too many models of printers available – over 200 models of printers have been bought from more than 30 sub-categories of printers on the current NMSOs. The multitude of choices creates confusion among buyers and users.
- Periodically, Requests for Volume Discount (RVDs) are undertaken for specific departments, resulting in increased administrative burden for both suppliers and the government. (Although discounts were obtained through this process, RVDs were not used consistently – less than 25% of the expenditure on printers resulted from using RVDs.)
- Generally speaking, large printer manufacturers compete to be listed on the standing offer as suppliers and most choose to deliver their printers to government clients across Canada through reseller networks, which include SMEs.
- Having their printer listed as the best value in a category offers no guarantee that a supplier will receive orders. Once suppliers have a standing offer with the government, they must then invest resources to market their products across government to obtain business.
- Under the current system, out of the 11 companies that have a standing offer for printers with the government, two suppliers get 93% of the business volume.
Q3. What is going to change?
A3. 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 (Category 1 and Category 2), and the process will be the same for each of 9 sub-categories of Group 2. It is important to note that the same supplier may submit offers for multiple categories/sub-categories.
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.
In addition, the printers offered must:
- Be Energy Star qualified;
- Meet eco-labelling certification standards.
Call-up limits will be structured to reward the top-ranked supplier but to manage exceptions where warranted.
Q4. How will the government get better value for Canadians through the RFSO?
A4. The government will get better value for Canadians by doing business with firms that offer good value on their behalf in an open, fair and transparent way and offer products that are environmentally friendly.
At the end of each month, the government will invite suppliers to submit a revised price for their approved products. All suppliers within 15% of the Best Value Factor (a combination of total life cycle cost, quality, performance, usability and features) will qualify to sell to the government for the following month.
Q5. How much is the government currently spending on commercial offset print services?
A5. Currently, the Government of Canada spends more than $22M a year on printers.
Q6. How much is the government hoping to save through the new RFSO?
A6. The proposed Request for Standing Offer (RFSO) for printers is expected to generate significant savings over the next five years.
Q7. How will the RFSO impact small and medium sized enterprises?
A7. This RFSO will lower the cost of bidding for Government of Canada contracts through a streamlined process and standardization. There is a potential increase in business volume for suppliers offering good value.
Firms who do not demonstrate that they can offer competitive pricing representing good value, will have a reduced opportunity for government business.
Regional distribution and warranty service continues to be required and 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.
Q8. Will the RFSO have an environmental element to it?
A8. 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.
In addition, the printers offered must:
- Be Energy Star qualified;
- Meet eco-labelling certification standards.
Q9. Has the government consulted with the industry before issuing the RFSO for printers?
A9. Yes. 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 made further changes to the approach. Informal discussions have also been had with industry associations, which has allowed for the presentation of alternative approaches.
Q10. Are aboriginal businesses considered?
A10. There are no Aboriginal set-asides for this RFSO as there are no Aboriginal companies specializing in manufacturing printers.
Q11. When will the RFSO be issued?
A11. The Request for Standing Offer (RFSO) will be published on the Government’s Electronic Tendering Service (MERX) on November 16th, 2006 and will close on January 12th, 2007.
