Default by the Offeror

Default by the Offeror is a clause used in Canadian federal standing offers and requests for standing offers (RFSOs). It allows Canada to set aside a standing offer when the offeror fails to meet the obligations, representations, certifications or other conditions that the standing offer sets out. The exact consequences, and any chance for the offeror to respond, depend on the wording of the solicitation or standing-offer clause that applies.

A standing offer is not a contract. The CanadaBuys RFSO for research, evaluation and performance measurement services describes it as an offer to provide goods or services at pre-arranged prices under specified terms and conditions. Authorized users then issue call-ups against it. Because of this, the clause concerns the offeror's continuing eligibility and compliance under the standing offer, not the end of an awarded contract.

Where the clause appears in standing offer documents

The clause is used in federal RFSOs and the standing offers that result from them. The RFSO for research, evaluation and performance measurement services includes a section numbered 6.15 titled "Default by the Offeror." That section sits alongside the other terms that govern how the standing offer operates and how authorized users call up against it.

Some solicitations tie default to specific conditions. A National Defence request for a standing offer states that failure to comply with specified additional information and conditions will constitute the offeror being in default. In that case the solicitation itself defines what counts as non-compliance.

How it differs from termination for default

Termination for default is a remedy applied to an awarded contract when the contractor fails to perform. Default by the Offeror works at an earlier and different level. It lets Canada withdraw or set aside the standing offer itself, which removes the offeror from the arrangement that authorized users draw on.

Since a standing offer commits Canada to nothing until a call-up is issued, setting one aside is a decision about whether the offer remains usable. Suppliers should read it as a compliance condition that applies for as long as the standing offer is in place.

Default by the Offeror under the anti-forced-labour requirements

The clause also appears in federal policy. Policy Notification PN-150U1 on anti-forced-labour requirements identifies "Default by the Offeror" as section 2005 13 of the standing-offer terms. It states that Canada may set aside a standing offer if the offered goods, or any part of them, are classified under a Customs Tariff provision that prohibits their importation.

The notification sets out a process for these cases:

• Before making a final decision, Canada may inform the offeror and give it an opportunity to make written representations.
• Written representations must generally be submitted within 30 days of receiving a notice of concern, unless Canada sets a different deadline.
• A notice setting aside the standing offer may take effect immediately and may not include a cure period, such as time to replace goods connected with forced labour.

What it means for a supplier bidding on Canadian public contracts

Treat the clause as an ongoing obligation, not a one-time bid requirement. Before submitting an offer, read the Default by the Offeror section and any referenced conditions in the RFSO, because the wording sets what triggers default and what response is available.

• Keep certifications, representations and required information accurate for the full life of the standing offer.
• Notify Canada of any change that affects a representation you have made, where the clause requires it.
• Know the tariff classification and origin of the goods you offer, since a prohibited-import classification can lead to the standing offer being set aside.
• If you receive a notice of concern, respond in writing within the stated deadline. Under PN-150U1 that is 30 days unless Canada sets another date.