220 - Standing Offers and Supply Arrangements

The chapters of the Customer Manual pertaining to the acquisition of goods and services are under review. Please refer instead to Treasury Board's Contracting Policy, the PWGSC Supply Manual, and PWGSC Acquisitions Branch Policy Notifications.

220.1 INTRODUCTION

Public Works and Government Services Canada (PWGSC) has two methods of supply which allow customers to order directly from suppliers - standing offers and supply arrangements.

(a) Standing Offers

1. A standing offer is not a contract but an administrative means to provide for the supply of goods or services at prearranged prices with set terms and conditions, for specific periods of time on an 'as requested' basis.
2. No obligation exists until a call-up (order) is placed with the supplier. Each call-up is a separate contract between the Crown and the supplier.
3. When a call-up is made against a standing offer, there are no negotiations and acceptance by the Crown of the supplier's offer is unconditional.

(b) Supply Arrangements

1. Supply arrangements are non-binding agreements between PWGSC and suppliers to provide a range of goods and, more commonly, services on an 'as required' basis. They are lists of qualified suppliers for certain services with a set of predetermined terms and conditions that will apply to subsequent contracts.
2. No obligation exists until the customer issues a contract to the supplier. Each contract issued is considered to be a separate contract established between the Crown and the supplier.
3. Departments create their own contracts within the scope of the arrangement and these contracts are signed on behalf of the minister of the department issuing the contract.
4. Under a supply arrangement, an offer is made by the supplier in response to a department's request for proposal. The prearranged terms and conditions and general requirements of the supply arrangement apply. Only the specific departmental requirements and the price must be agreed to (many supply arrangements include ceiling prices which allow the customer to negotiate prices downward).

220.2 ADVANTAGES OF THE STANDING OFFER AND SUPPLY ARRANGEMENT METHODS OF SUPPLY

These methods of supply offer the following advantages when applied to the acquisition of commercially available goods and services:

1. direct access to a supplier (for exceptions - see article 220.5, paragraph 2e);
2. better prices through consolidation of requirements and increased competition among suppliers;
3. reduction of administrative costs;
4. reduction in lead time; and
5. reduction in inventory investment.

Note: PWGSC personnel can assist you through the acquisition process when using standing offers and supply arrangements.

220.3 FINANCIAL LIMITATIONS ON ORDERS PLACED PURSUANT TO A STANDING OFFER OR SUPPLY ARRANGEMENT

1. Each standing offer/supply arrangement has a call-up or contract limitation. Using form PWGSC-TPSGC 9200, submit to PWGSC individual requirements which exceed the limitation. Do not split requirements into a number of call-ups just to stay within the limits of the standing offer/supply arrangement.
2. Sometimes, above a certain dollar amount or quantity level, better value can be achieved by treating a requirement as a separate acquisition. PWGSC establishes a maximum limit for individual call-ups/contracts as the best-value limitation, to achieve the government's objective of best value for money spent. You are asked to honour such limitations.
3. The call-up/contract limitation is normally based on:
   1. the maximum permissible limits established by Treasury Board;
   2. a best-value limitation;
   3. the estimated dollar value of goods or services expected to be ordered at any one time given the nature of the goods or services;
   4. a combination of the above.

220.4 APPLICABILITY OF TRADE AGREEMENTS TO STANDING OFFERS AND SUPPLY ARRANGEMENTS

1. The applicability of the trade agreements (AIT, NAFTA or WTO-AGP) to standing offers and supply arrangements depends on three factors:
   1. whether the department(s) for which the standing offer/supply arrangement is intended, is (are) covered by the agreements;
   2. whether the product or service is covered by the agreements; and,
   3. whether the total estimated value of all the call-ups against the standing offer/supply arrangement (which determines the total estimated value of the offer or agreement) is within the AIT, NAFTA or WTO-AGP thresholds (see Chapter 215, article 215.3).
2. The total estimated values are determined prior to tendering, at which time it is identified whether or not any of the trade agreements apply. If they do apply, bids are solicited in accordance with the agreements.
3. Subsequent individual call-ups/contracts can be made off the standing offer/supply arrangement without considering trade agreement applicability.

220.5 TYPES OF STANDING OFFERS

1. Standing offers are categorized by geographic range and customer users. Standing offers for use across Canada are termed 'national'. Those restricted for use within a geographic region are termed 'regional'. Standing offers intended for the use of several customers are termed 'master'. Those restricted to one customer are termed 'individual.'
2. At present, there are five types of standing offers:
   1. A National Master Standing Offer (NMSO) for the use of many departments or agencies through out Canada. NMSOs are arranged by PWGSC without any requisitions from customer departments or agencies.
   2. A Regional Master Standing Offer (RMSO) for the use of many departments or agencies within a specific geographic area. RMSOs are arranged by PWGSC without any requisitions from customer departments or agencies.
   3. A National Individual Standing Offer (NISO) for the use of a specific department or agency throughout Canada. NISOs are arranged by PWGSC on receipt of a funded requisition.
   4. A Regional Individual Standing Offer (RISO) for the use of a specific department or agency within a specific geographic area. RISOs are arranged by PWGSC on receipt of a funded requisition.
   5. A Departmental Individual Standing Offer (DISO) is used by PWGSC as a method of supply to: analyze customer demand, determine quantities and quality, standardize products used by government, manage complex requirements and satisfy requirements for data collection for reports to Treasury Board and the Auditor General's Office. Only PWGSC may issue call-ups against a DISO upon receipt of a funded requisition from a customer department.

220.6 TYPES OF SUPPLY ARRANGEMENTS

Supply arrangements can be issued for national or regional use by customers. The geographic range and intended users are outlined in the arrangements.

220.7 OTHER INFORMATION RELATED TO STANDING OFFERS AND SUPPLY ARRANGEMENTS

1. Customers are made aware of a standing offer or supply arrangement through distribution of a procurement document or publication of a guide or catalogue (see below).
2. PWGSC provides the following information to departments on its mailing lists or upon request:
   1. Index of Standing Offers and Supply Arrangements. The Index lists NMSOs, RMSOs and DISOs, as well as supply arrangements, issued by PWGSC headquarters and regional offices and cross-references goods and services, contractors, serial numbers and expiry dates. The index is available to government employees on the Intranet through Publiservice under 'Programs and Services'.
   2. Catalogues. Individual sectors may issue catalogues (in lieu of the standing offer document) containing details of standing offers/supply arrangements, including specific terms and conditions and pricing information. These are intended to explain the standing offer/supply arrangement process. To obtain more information, contact the Standing Offer Coordination Office (see Directory) or the appropriate sector.
   3. Electronic Format. PWGSC is phasing in the release of standing offer documents and acquisition guides in electronic format, on diskette or through on-line databases. Contact the PWGSC Forms Management Division (see Directory) for more information.

Note: Pricing information contained in standing offer/supply arrangement documents, catalogues or acquisition guides is proprietary to a supplier and should not be distributed to third parties without prior authorization from PWGSC.

220.8 DISTRIBUTION OF STANDING OFFERS AND SUPPLY ARRANGEMENTS

1. National master standing offers issued by PWGSC headquarters are distributed to identified end-users at the head office/regional levels of customer departments and agencies.
2. Regional master standing offers issued by the PWGSC regions are distributed to the customers served by the particular regional purchasing office.
3. Obtain additional copies of master standing offers, if required, as follows:
   1. For standing offers arranged by PWGSC headquarters, departmental materiel managers can request copies (stating the address code and number of copies required) from the Standing Offer Coordination Office (see Directory).
   2. For standing offers arranged by PWGSC regional offices, send requests (with address code and number of copies required) to the nearest PWGSC regional office (see Annex A' Directory' of Chapter 210).
4. Departmental individual standing offers are not sent directly to customers. Instead, bulletins, notices and reference publications issued by PWGSC provide information about these standing offers.
5. National or regional individual standing offers are distributed in accordance with instructions on the customer's requisition.
6. Supply arrangements are distributed to departments and agencies according to the designated geographic scope and intended users.

220.9 REQUESTING AN INDIVIDUAL STANDING OFFER

To request an individual standing offer, submit a requisition form PWGSC-TPSGC 9200 to PWGSC including the following information:

1. applicable period for the offer;
2. estimated quantities;
3. probable consignee locations and codes;
4. inspection requirements (see Chapter 230);
5. the required distribution of the offer (i.e., the applicable ordering offices within the department);
6. a statement indicating if the estimated cost of individual call-ups is expected to frequently exceed the financial limits imposed by Treasury Board, if applicable. In such cases, if a standing offer is still the best method of supply, it will be submitted to Treasury Board for approval;
7. a statement indicating whether an individual call-up or the sum of all call-ups will exceed the AIT/NAFTA/WTO-AGP thresholds (see Chapter 215, article 215.3); and
8. any special requirement such as security clearance of supplier personnel, transmission of confidential information, etc.

220.10 MAKING A CALL-UP PURSUANT TO A STANDING OFFER

1. Order goods and services, unless otherwise specified, using one of the following forms:
   1. PWGSC-TPSGC 942, 'Call-up Against a Standing Offer' (bilingual) and the corresponding Continuation sheet, form PWGSC-TPSGC 942-1 (Figures 220-1 and 220-2). These forms can be used for each separate standing offer.
   2. PWGSC-TPSGC 944, 'Call-up Against Multiple Standing Offers' (English) and the Continuation Sheet, form PWGSC-TPSGC 944-1 (Figures 220-3 and 220-4). These forms can be used to order goods and services from different standing offers which have been issued to the same supplier. Note that in this case, the company will send one invoice to cover all items ordered using the 944. The French versions of these forms are PWGSC-TPSGC 945 and PWGSC-TPSGC 945-1.
   3. Copies of the above forms are available from Canada Communication Group Inc. using a local purchase order (see Annex C - Directory). The stock numbers are:
      PWGSC-TPSGC 942 7540-21-862-7718 Unit of Issue: SE
      PWGSC-TPSGC 942-1 7540-21-855-4848 Unit of Issue: SE
      PWGSC-TPSGC 944 7540-21-911-2185 Unit of Issue: SE
      PWGSC-TPSGC 944-1 7540-21-911-2186 Unit of Issue: SE
   4. Electronic versions of the forms, using 'Perform Pro Plus,' are now available through PWGSC, Forms Management Division (see Directory).
2. Each standing offer states where call-up documents are to be forwarded. Each call-up for goods or services should apply to one destination only, unless otherwise stated in the standing offer, and should be sent to the appropriate supplier's outlet. Each call-up must be funded.
3. Customers are responsible for ensuring that:
   1. sufficient funds are available for the items called-up;
   2. the maximum value for individual call-ups is not exceeded;
   3. the goods or services are for official government use;
   4. the appropriate provincial sales tax licence number, if applicable, is quoted in the call-up;
   5. where special requirements, such as security, are not specified in the standing offer, the responsible PWGSC contracting officer (whose name appears on the standing offer) is informed prior to placing a call-up. Since special requirements usually have an associated cost, the PWGSC contracting officer may either amend the standing offer or take alternate action, such as issuing a separate contract;
   6. the goods and services received are as specified in the standing offer;
   7. the invoiced prices are in accordance with the standing offer, unless otherwise stated by PWGSC.

220.11 ISSUING A CONTRACT PURSUANT TO A SUPPLY ARRANGEMENT

1. 1Customers are responsible for ensuring that:
   1. sufficient funds are available for the call-up;
   2. the maximum value limit of the supply arrangement is not exceeded;
   3. bids are solicited only from suppliers listed in the supply arrangement. Suppliers should be selected from within the customer's region, unless no source is available within that region. The competitive process must be used in accordance with the Treasury Board Manual - Contracting, Appendix B);
   4. the services received are within the parameters of the services outlined in the supply arrangement; and
   5. the invoiced prices are in accordance with the supply arrangement. In the case of a supply arrangement with ceiling prices, invoice prices must be less than or equal to the maximum allowable rates in the supply arrangement.
2. The contracting process for supply arrangements is as follows:
   1. preparation of a bid solicitation (Request for Proposal [RFP]);
   2. evaluation of the proposals and selection of a supplier; and
   3. preparation of the contract.

      Note that the terms and conditions of a supply arrangement form part of the RFP and any resulting contract.

3. Use form PWGSC-TPSGC 9200-11 (Supply Arrangement Solicitation/Contract for Non-consulting Services) for the RFP and subsequent contract. This form is available electronically and in printed format. Printed forms are available under stock no. 7540-21-909-5075 from Canada Communication Group Inc. (see Annex A - Directory).

220.12 SECURITY REQUIREMENTS

1. If the PWGSC Call-up against a Standing Offer/Supply Arrangement or amendment includes provisions for security, form TBS/SCT 350-103 'Security Requirements Check List (SRCL)' must accompany each completed PWGSC-TPSGC 942.
2. In every case before the award of a call-up/contract, confirm with the Canadian and International Industrial Security Directorate of PWGSC, through your Security Office, that the proposed supplier(s) hold the required level of security screening and, if applicable, document safeguarding and/or electronic data processing (EDP) or production approval.
3. All security inquiries from departmental/agency security officers must be directed to the Industrial Security Operations Division, Canadian and International Industrial Security Directorate, PWGSC. (See Directory).

220.13 APPLICABILITY OF SALES TAXES TO STANDING OFFERS AND SUPPLY ARRANGEMENTS

1. Provincial Sales Tax
   1. Since standing offers are not contracts and, since both federal departments and Crown corporations may use standing offers, all prices quoted in standing offers do not have to include provincial ad valorem sales taxes.
   2. Specify on each Call-up Against a Standing Offer, the applicability of provincial sales taxes.
   3. Unless otherwise required by law, federal government departments and agencies are not required to pay any ad valorem sales tax levied by the province in which the taxable goods or services are delivered. The contractor does not invoice or collect any ad valorem sales tax in these cases. This exemption has been provided to federal government departments and agencies under the authority of the applicable provincial sales tax exemption licence number for the provinces listed below:
      Prince Edward Island OP-10000-250
      Ontario 11708174G
      Manitoba 390-516-0
      British Columbia 005521
   4. An exemption certification is required for Quebec, Saskatchewan, the Yukon and the Northwest Territories certifying that the property or services ordered are purchased by the federal government with Crown funds and are therefore not subject to provincial/territorial sales and consumption taxes.
   5. In Alberta, Saskatchewan, the Yukon and the Northwest Territories, provincial sales tax does not apply to goods and services delivered to the federal government.
   6. The contractor is not exempt form paying provincial sales tax under the above Exemption Licence Numbers or Exemption Certification. The contractor is required to pay the provincial sales tax on taxable goods and services used or consumed in the performance of the contract (as per applicable provincial legislation), including material incorporated into real property.
   7. Double taxation could result from failure to quote the applicable licence number or appropriate certification.
   8. Crown corporations are required to pay provincial sales taxes under the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977. However, some Crown corporations hold their own special PST licences which enable them to purchase goods and services for their own use, free of PST at the time of purchase.
   Note: Legislated exceptions exist where federal government departments and agencies may be required to pay ad valorem sales taxes levied by the province in which the taxable goods and services are delivered. The following exceptions are examples and do not represent a complete list of all exceptions under the law:
   1. tobacco products subject to tobacco taxes;
   2. petroleum products subject to gasoline and automotive fuel taxes;
   3. vehicle registration fees;
   4. amusement/admission fees (Nova Scotia and New Brunswick);
   5. insurance premiums (Quebec);
   6. environmental levies for tires, batteries, lubricating oil (British Columbia for tires and batteries, Alberta for tires and lubricating oil); and
   7. transient living accommodation subject to hotel room taxes (Prince Edward Island and British Columbia).
2. Goods and Services Tax (GST) and the Harmonized Sales Tax (HST)
   1. The federal government entity defined by section 2 of the Financial Administration Act is registered as a single entity and must pay, record, and report GST and HST, as applicable, paid on taxable goods and services purchased against a standing offer/supply arrangement.
   2. Departments do not pay GST/HST when the supplies purchased are GST/HST-exempt or zero-rated or when the supplier is not registered with Revenue Canada, Customs and Excise, for the purpose of GST/HST (e.g. the supplier's taxable sales are under $30,000 per year). When certifying that goods or services are exempt or zero-rated, the customer department must define the specific exemption provision(s) governing the supplies purchased.

   Note: There is a GST/HST coordinator for each department to advise departmental staff on the taxable status of supplies and provide advice on GST/HST-related matters. The coordinator contacts Revenue Canada for guidance as appropriate.

220.14 BILLING FOR PWGSC STANDING OFFERS/SUPPLY ARRANGEMENTS

The PWGSC Acquisitions and Traffic Management Service Lines do not charge for standing offer and supply arrangement services. The Department's special operating agencies and other service lines may charge depending on the type of standing offer/supply arrangement. See Chapter 410 concerning PWGSC rates or consult with the appropriate organization.

220.15 ENQUIRIES

1. Direct any enquiries specifically related to a product or service or of a contractual nature to the contracting officer whose name appears on the standing offer/supply arrangement.
2. Direct any questions or recommendations of a general nature to the PWGSC Standing Offer Coordination Office (see Directory). This office is a communication link for standing offer activities between PWGSC, its customers and suppliers.

ANNEX A - DIRECTORY

Forms Management Division
Administration Sector
Public Works and Government Services Canada
Place du Portage, Phase III, 3B3
Gatineau, Quebec
K1A 0S5
Telephone: (819) 956-3153
Facsimile: (819) 956-3155

Standing Offer Management Office
Public Works and Government Services Canada
Place du Portage, Phase III, 7C2
Gatineau, Quebec
K1A 0S5
Telephone: (819) 956-0929
Facsimile: (819) 956-0355

Industrial Security Operations Division
Canadian and International Industrial Security Directorate
Public Works and Government Services Canada (PWGSC)
c/o Central Mail Room
Place du Portage, Phase III, 0B3
11 Laurier Street, Gatineau QC
or
2745 Iris St. 2nd Floor
Ottawa, Ont.
K1A 0S5
Telephone: (613) 948-1629
Facsimile: (613) 948-1710