Advantages of Standing Offers

A standing offer is a pre-arranged offer from a supplier to provide specified goods or services at established prices and under set terms and conditions when the government needs them. It is not a contract. A contract exists only when an authorized government user issues a call-up against the standing offer, as Public Services and Procurement Canada (PSPC) explains.

The advantages of standing offers are the benefits this method of supply brings to buyers and to the suppliers that hold them. Documented advantages include faster purchasing, less paperwork, pre-set prices and terms, lower administrative costs, reduced lead times and lower inventory requirements. The method is administered primarily by PSPC and used across federal departments and agencies.

Benefits federal buyers gain from standing offers

Standing offers suit recurring requirements, where a department orders the same goods or services repeatedly but cannot know the exact timing, quantity or scope in advance. CanadaBuys identifies the following benefits:

• Faster call-ups, because the terms are already settled.
• Less paperwork for each purchase.
• Pre-set prices and terms and conditions.
• Lower government administrative costs.
• Reduced inventory, since departments order as needs arise.

The Department of National Defence describes the same advantages in its procurement overview: quicker processes, less paperwork, pre-set and negotiated terms, and lower administrative costs.

Why a call-up replaces a new competition

The main efficiency comes from the structure of the method. The competition or qualification happens once, when the standing offer is established. After that, a department whose requirement is covered by an existing standing offer does not need to repeat a full competition. The Office of the Procurement Ombudsman notes in its procurement practice review that suppliers who compete successfully for a standing offer may obtain business without competing again for each individual requirement, subject to the applicable call-up process.

Defence Construction Canada uses the same approach. It describes standing offers as establishing pre-arranged rates, terms and conditions for goods or services required on an as-needed basis, and it states that a contract forms only when it issues a call-up. Its procurement process page sets this out. Until a call-up is issued, the government has no obligation to purchase.

Standing offers compared with supply arrangements

The advantages of a standing offer depend on prices and terms being fixed in advance. A supply arrangement works differently. Under a supply arrangement, departments generally run a further competition among qualified suppliers for each requirement. Under a standing offer, the applicable prices and terms are already established, so the buyer can go directly to the holder. The Office of the Procurement Ombudsman covers the distinction on its low-dollar-value procurement page.

What standing offers mean for a supplier bidding on Canadian public contracts

For a supplier, a standing offer can be a route to repeat federal business without bidding on every requirement. To get there, a supplier must first compete successfully or otherwise qualify. It must then comply with the standing offer terms and conditions and fulfill each call-up it receives.

Holding a standing offer does not guarantee any call-ups. Bid teams should price carefully, because the terms are fixed in advance, and should plan to be responsive when departments issue call-ups. Current opportunities are listed on CanadaBuys.