PN-72R: Review Process for Standing Offers and Supply Arrangements

DATE: November 14, 2006

This replaces the original Policy Notification (PN)-72 of December 13, 2005, in its entirety. This notification provides new direction to all procurement personnel on a new process for the creation, the renewal, and the extension of standing offers (SOs) and supply arrangements (SAs).

This PN must be read in conjunction with the provisions of applicable chapters of the Supply Manual (SM), and PN-70. Please refer to Annex A of this document for changes to the Standard Acquisitions Clauses and Conditions (SACC) Manual. In case of conflict between the SM and this PN, the provisions of this PN-72R will take precedence.

Background

Under the "The Way Forward" initiative, effective April 1, 2005, the use of existing standing offers and supply arrangements for ten commodity groups identified in PN-70 became mandatory. To support this initiative, all contracting personnel must ensure that existing and future standing offers and supply arrangements provide best value, meet client department needs, and demonstrate tangible savings.

Policy

The creation, renewal or extension of all SOs and SAs requires advance review by either the designated Commodity Team (CT) Leader identified for those goods or services, or, if such a team does not exist, by a Regional Reviewer (RR), who is designated for each region. Should a CT Leader or a RR not exist, the Director, Commodity Management Directorate, Acquisitions Branch, will designate a reviewer or will be responsible to perform the review. The review will be conducted in accordance with the procedures and guidelines outlined in this PN. A list of the CT Leaders and RRs is available on the Standing Offer Index (SOI) home page (please note that this list will be updated regularly).

Procedures

1. As of August 15, 2006, PWGSC contracting officers must use the Departmental Plain Language Standard Procurement Documents for the issuance of SOs for goods or services (ref. PN-79U).

2. Effective immediately, PWGSC contracting officers are to send the PDF file (the preferred format) or related electronic link for SOs or SAs for posting on the SOI Website to ncr.soco@pwgsc.gc.ca, within five working days of issuance, in accordance with the Standing Offer Coordinating Office (SOCO) Guide.

3. Prior to the creation, renewal or extension of any SO or SA, regardless of value, and regardless of whether the extension period was pre-approved in the original approval document, the contracting officer must submit a formal procurement plan, Contract Planning and Advance Approval (CPAA), or an agreed upon summary document, as applicable to the CT Leader or RR with a copy to their Manager. The CT Leader or the RR will consider the rationale and conditions of the procurement plan, CPAA, or a summary document, and make recommendations for changes where applicable. The CT Leader or RR endorses the procurement plan, CPAA, or a summary document, prior to submission for approval based upon delegated authorities. Existing contract approval authorities remain in place. Contracting officers are encouraged to contact the CT Leader or RR at any time during the procurement process to obtain input or guidance even before creation of the procurement plan, CPAA or a summary document. This will expedite the review process and could eliminate having to make changes after the submission to the CT Leader or RR for review.

In addition to standard information, the formal procurement plan, CPAA, or a summary document, will address the following elements:

1. For the creation or renewal of Standing Offers or Supply Arrangements:

   1. The intended Goods and Services Identification Number and description must be clearly identified for goods and services, as well as for services related to goods.

   2. The goods or services should not duplicate those already provided under an existing SO or SA at the national or regional level (ref. SM 5.182). If the goods or services are similar, or identical, in nature to goods or services provided under existing SOs or SAs, a full rationale must be provided to justify creating, renewing or extending a SO or SA.

   3. Where possible, goods and services should be standardized to allow the SO or SA to be used by all federal departments and agencies at the national or regional level. If the request is for approval of a national or regional individual standing offer, an explanation must be provided to justify why the standing offer could not be used by other departments.

   4. The procurement plan, CPAA, or a summary document, must address how the proposed standing offer or supply arrangement will help achieve some or all of the departmental savings objectives of a 10 percent reduction in price, 50 percent reduction in processing time, and 10 percent administrative cost saving. It must also highlight how socio-economic factors (such as the Procurement Strategy for Aboriginal Business, Comprehensive Land Claims Agreements, and the Green Procurement Policy) have been considered.

   5. The term of the SO or SA should typically be one year in length. For those that require significant effort or timelines to establish, or may generate better value by offering longer terms, optional extension years may be included.

   6. The method of selection to identify the supplier(s) who will be given SOs or SAs must be identified and supported. For commercially available goods or services, lowest-priced technically acceptable offers usually offer the best value to Canada. Any other method of selection must be fully justified.

   7. If multiple SOs or SAs will be issued, the intended number of suppliers must be rationalized, explained and supported. To ensure that Canada makes the best use of its buying power while providing optimal effectiveness and efficiency in support of client programs and ensuring best value resulting in tangible savings for departments, a clear ranking and selection process must be identified. If no ranking or selection method can be identified, a full explanation must be provided (Ref. SM 5.180 and SM 5.181).

   8. Clear pricing information, maximum value of client call-ups, procedures for call-ups that exceed the client authority (e.g. contracting officers approved call-ups), volume discounts and use of Government of Canada Acquisitions Cards as a call-up and payment instrument must be addressed.

   9. Quarterly reporting on the use of multi-departmental (master) SOs and SAs by suppliers is mandatory, in the format provided by the Value Management Office (VMO). The VMO business volume report detailing the data elements is available on the Business Access Canada Info-Plus Website, under "Publications, Manuals, Forms". Standard Acquisition Clauses and Conditions (SACC) Manual clauses M7010C and A7010C, as revised at Annex A, must be included in all multi-departmental (master) SOs and SAs, respectively. As some CT Leaders or RRs may want to continue receiving more complete or specific information on specific multi-departmental (master) or individual SOs or SAs to ensure comprehensive commodity management, customized reporting remains the responsibility of each CT Leader or RR.

2. For the extension of Standing Offers or Supply Arrangements:

   1. The requirements of the creation or renewal of SOs or SAs, as listed above, must also be addressed in the request to extend the existing SO or SA.

   2. The reason(s) to extend the existing SO or SA and the duration of the extension must be provided. The extension, unless otherwise approved, must be for a period not longer than one year.

   3. If there are any other changes to the existing SO or SA, e.g., basis of payment, prices or rates, all changes must be identified and supported.

   4. For repetitive type SOs or SAs, a complete summary of the intended renewal procurement strategy addressing requirement, method of supply, geographic coverage, schedule and coordination with CT Leader or RR, plus other important elements must be provided in the request to amend.

A summary checklist is provided at Annex B, which will be utilized as the basis of review by the CT Leader or RR. Annex B also provides further instructions for contracting officers.

Inquiries

Any inquiries are to be addressed to Denise Brassard, Commodity Management Directorate, Acquisitions Branch, either by phone at 819-956-1650 or by e-mail at: denise.brassard@pwgsc.gc.ca.

Annex A

Changes to the SACC Manual

M7010C    (XXXX-XX-XX)    Standing Offer Reporting

Usage:  Full Text

Remarks:

Unless otherwise authorized by the responsible Commodity Team, use the following clause in multi-departmental (master) standing offers (SOs) when more than one department is identified as a user of the standing offer. The clause refers to the business volume report format provided by the Value Management Office (VMO) and is available on the Business Access Canada, Info Plus Website, under "Publications, Manuals, Forms" at the following address: http://www.contractscanada.gc.ca/en/infoplus-e.htm. The Standing Offer Authority must forward to the VMO, on a quarterly basis, the completed reports provided by the offerors to the following e-mail address: ncr.acqbvmo@pwgsc.gc.ca.

Some Commodity Team (CT) Leaders or Regional Reviewers (RR) may want to receive more complete or specific information on specific multi-departmental (master) or individual SOs to ensure comprehensive commodity management. Customized reporting remains the responsibility of each CT Leader or RR. If a customized format is identified by the CT Leader or by the RR, the alternate report must contain as a minimum the list of data elements required by the VMO and the clause below must be modified to reflect the additional requirements.

Text:

The Offeror must compile and maintain records on its provision of goods, services or both to the federal government under contracts resulting from the Standing Offer. This data must include all purchases paid for by a Government of Canada Acquisition Card. The data must be submitted on a ____________ (The Standing Offer Authority must insert "quarterly basis" or specify an alternate reporting period) to the Public Works and Government Services Canada (PWGSC) Standing Offer Authority.

(If an alternate reporting period is required, the Standing Offer Authority must delete the quarterly periods provided below and define the alternate reporting period.)

Quarterly periods are defined as follows:

1st quarter: April 1, to June 30;
2nd quarter: July 1 to September 30;
3rd quarter: October 1 to December 31;
4th quarter: January 1 to March 31.

Electronic reports must be completed and forwarded to the PWGSC Standing Offer Authority no later than 15 calendar days after the end of the (The Standing Offer Authority must insert "quarterly period" or the alternate reporting period as identified in the first paragraph above). An electronic version of the form in Excel and/or Lotus spreadsheet format ___________ (The Standing Offer Authority must choose "will be provided to the Offeror electronically by the Standing Offer Authority" or "is available on the Business Access Canada, Info Plus Website, under "Publications, Manuals, Forms" at the following address: http://www.contractscanada.gc.ca/en/infoplus-e.htm.)

All data fields of the report must be completed as requested. If some data is not available, the reason must be indicated in the report. If no goods or services are provided during a given period, the Offeror must provide a "NIL" report.

Failure to provide fully completed reports in accordance with the above instructions may result in the setting aside of the Standing Offer and the application of a vendor performance corrective measure.

*********************

A7010C    (XXXX-XX-XX)    Supply Arrangement Reporting

Usage: Full Text

Remarks:

Unless otherwise authorized by the responsible Commodity Team, use the following clause in supply arrangements. The clause refers to the business volume report format provided by the Value Management Office (VMO) and is available on the Business Access Canada, Info Plus Website, under "Publications, Manuals, Forms" at the following address: http://www.contractscanada.gc.ca/en/infoplus-e.htm. The Supply Arrangement Authority must forward to the VMO, on a quarterly basis, the completed reports provided by the suppliers to the following e-mail address: ncr.acqbvmo@pwgsc.gc.ca.

Some Commodity Team (CT) Leaders or Regional Reviewers (RR) may want to receive more complete or specific information on SAs to ensure comprehensive commodity management. Customized reporting remains the responsibility of each CT Leader or RR. If a customized format is identified by the CT Leader or by the RR, the alternate report must contain as a minimum the list of data elements required by the VMO and the clause below must be modified to reflect the additional requirements.

Text:

The Supplier must compile and maintain records on its provision of goods, services or both to the federal government under contracts resulting from the Supply Arrangement. This data must include all purchases paid for by a Government of Canada Acquisition Card. The data must be submitted on a ______________ (The Supply Arrangement Authority must insert "quarterly basis" or specify an alternate reporting period) to the Public Works and Government Services Canada (PWGSC) Supply Arrangement Authority.

(If an alternate reporting period is required, the Supply Arrangement Authority must delete the quarterly periods provided below and define the alternate reporting period.)

Quarterly periods are defined as follows:

1st quarter: April 1, to June 30;
2nd quarter: July 1 to September 30;
3rd quarter: October 1 to December 31;
4th quarter: January 1 to March 31.

Electronic reports must be completed and forwarded to the PWGSC Supply Arrangement Authority no later than 15 calendar days after the end of the (The Supply Arrangement Authority must insert "quarterly period" or the alternate reporting period as identified in the first paragraph above). An electronic version of the form in Excel and/or Lotus spreadsheet format ___________ (The Supply Arrangement Authority must choose "will be provided to the Supplier electronically by the Supply Arrangement Authority" or "is available on the Business Access Canada, Info Plus Website, under "Publications, Manuals, Forms" at the following address: http://www.contractscanada.gc.ca/en/infoplus-e.htm).

All data fields of the report must be completed as requested. If some data is not available, the reason must be indicated in the report. If no goods or services are provided during a given period, the Supplier must provide a "NIL" report.

Failure to provide fully completed reports in accordance with the above instructions may result in the withdrawal by Canada from the Supply Arrangement, the removal of the Supplier from the list of qualified suppliers and the application of a vendor performance corrective measure.

Annex B

Summary Check List

Introduction:

PN-72R contains the applicable policy and procedures to be considered before the creation, renewal or extension of all standing offers and supply arrangements.

Objectives:

The priority of Government of Canada Commodity Management objectives can be summarized as follows:

1. Obtain the best value.
2. Reduce procurement, administrative, compliance and reporting costs through more effective use of other available instruments, including technology.
3. Reduce the time taken to complete the procurement.
4. Consider socio-economic factors.

The Commodity Management Directorate, CT Leaders, or RRs will review each requirement and make recommendations on contributions to the above objectives.

Instructions for Requesting Contracting Officer:

1. Verify that the correct GSIN is being used for goods and services, as well as for services related to goods.

2. Validate the existence of any other methods of supply, within the same geographical area, for similar requirements and determine if the requirement may be combined with others. The Standing Offer Index and Help Desk is a good starting point. Another option is to review the Acquisition Information Service reports by supplier or by Goods and Services Identification Number, available from the Commodity Management Directorate on request.

3. Assess usage reports from suppliers and/or clients to determine the need for the renewal and/or extension or assess how the value was determined in the case of new requirements.

4. In the remarks area of your procurement plan, CPAA, or a summary document, address all elements outlined in PN-72R, as applicable.
   
   Note: If a summary document is being used as an alternative document, the following statement must be included in the formal procurement plan or CPAA.
   
   "In accordance with PN-72R the procurement strategy has been reviewed by the Commodity Team (CT) ______ (insert: team designation) for _____ (state: commodity class). The CT has endorsed the proposed strategy as acceptable under "The Way Forward" initiative."

5. Once reviewed by the Manager, send the procurement plan, CPAA, or a summary document, for review by e-mail with the subject line as follows: PN-72R - GSIN and title - document type and Serial Number. For example: PN-72R - N7030 - Software- NISO - 660EZ-05005XX as soon as possible to:

   1. Commodity Team Leader; or
   2. Regional Reviewer; or
   3. Director, Commodity Management Directorate or designated commodity area.
   
   Note: Contracting officers may contact the reviewer at any time for assistance with addressing any of the elements to be considered for the review.

6. A PDF file or related link posted on the Standing Offer Index (SOI), not only provides basic background tombstone information, it also provides a copy of the entire SO or SA document in PDF format and related amendment(s) and/or catalogues. SOI has become the main source of SO and SA information for departments and agencies and fully supports objectives of greening government operations by allowing printing of applicable pages of the SO and SA documentation on demand or simply viewing the information directly on screen. PDF documents are the preferred format for posting on SOI Website. For more information, please contact the Standing Offer Coordinating Office.

Instructions for the Reviewer:

Reviews will be made by either the Commodity Management Directorate (CMD), CT Leaders or RRs in conjunction with the commodity OPI in the following manner:

1. For all requirements, regardless of value and document type (SO or SA), the review will take into account the PN-72R requirements; specifically the 10-50-10 savings objectives, efforts to eliminate duplication, and socio-economic factors.

2. Upon sending final recommendations, all reviewers will copy the Commodity Management Directorate for for reporting and sharing purposes. The CMD will also copy this information, if requested, to the Standing Offer Management Office, Value Management Office, Office of the Greening Government Operations and the Office of Small and Medium Enterprises.

3. All review requests will be responded to within a reasonable time frame (2-4 business days) and where extensive consultation is required, an agreement as to resolution timing will be obtained between the reviewer and the originating contracting officer/manager.