Alternate Sources of Supply

Alternate Sources of Supply means other suppliers or supply sources capable of meeting the same requirement, or equivalent materiel or support, as the proposed source. The Government of Canada uses the term when it assesses whether a procurement has alternatives to a proposed sole source. The wording appears in the Supply Manual published on CanadaBuys.

In practice, it is a question that procurement officials answer in the procurement strategy. If other suppliers can deliver the same or equivalent materiel or support, the requirement has alternatives. If none can, the strategy must explain why. Related terms include sole source, single source, substitute materials, alternative products, supply arrangements and supply-chain resilience.

How the Supply Manual asks about alternative suppliers

The Supply Manual includes procurement-strategy questions that ask whether there are alternative sources of supply for the same or equivalent materiel or support. The question is not limited to identical products. A supplier offering equivalent materiel or support counts as an alternative when it can meet the requirement.

The question sits at the front of the procurement process. The answer shapes whether a requirement is competed or directed to one supplier, so it carries weight well before any solicitation is published. The guidance is in Chapter 3 annexes of the Supply Manual.

Exception 6(d) and the sole-source justification

When the answer to the alternative-sources question is no, the procurement strategy must explain why. The Supply Manual links this analysis to exception 6(d) of the Government Contracts Regulations, which covers a contract where only one person or entity can perform the contract. The applicable conditions and justification must be met.

Under this guidance, officials relying on the exception indicate that no alternate source can meet the client's mandatory performance specifications. They also refer to the attached sole-source justification. The absence of alternate sources is therefore the factual basis for the exception, and it has to be documented.

Supply arrangements as the competitive counterpart

The same CanadaBuys guidance describes the competitive side of the picture. A Request for Supply Arrangement establishes a pool of suppliers that meet the evaluation criteria stated in the solicitation. Once an arrangement is in place, identified users can solicit bids from the pre-qualified suppliers for requirements within the arrangement's scope.

A supply arrangement is a way of holding several qualified sources ready at once. Where a pool exists, the question of whether alternate sources are available is already answered in the affirmative for requirements within its scope.

How NATO uses the idea in supply-chain resilience

NATO uses related concepts in defence supply-chain work. Its guidance on public-private cooperation for resilience calls for engagement with private-sector stakeholders to secure alternate sources, identify substitute materials, enable surge production and mitigate cross-border bottlenecks.

NATO's defence supply-chain roadmap factsheet adds work on recycling and substituting key strategic materials, and on engaging industry about strategic stockpiling and substitute materials. In this setting, alternate sources are a way to reduce the effect of supply disruptions on defence-critical materials.

What it means for a supplier bidding on Canadian public contracts

• If you can meet a requirement that a department is considering directing to one supplier, you may be an alternate source. Be ready to show that your goods or services meet the mandatory performance specifications.
• Present your offering as an independent, technically compliant alternative, and state how it matches the same or equivalent materiel or support.
• Pre-qualification through a supply arrangement puts you in the pool of suppliers that users can solicit for requirements within its scope.
• On defence work with allied dimensions, expect interest in secure alternate sources and substitute materials.

The Supply Manual supports the requirement to assess whether alternatives can meet mandatory specifications. Check each solicitation or notice for its own response instructions.