Eligible Suppliers

When you see a solicitation restricted to "eligible suppliers," you're looking at a procurement where the government has limited competition based on supplier origin—typically favouring Canadian businesses or those from countries with reciprocal trade agreements. This isn't about technical qualifications. It's about where a supplier does business and what they're offering.

How It Works

The foundation for this approach sits in the Policy on Reciprocal Procurement, which allows federal departments to limit who can bid on contracts. Eligibility usually means you're either a Canadian supplier—defined under the Canadian Free Trade Agreement (CFTA) as a supplier with a place of business in Canada where it conducts activities on a permanent basis—or you're from a country that Canada has a trade agreement with.

You'll see this play out in supply arrangements managed by PSPC. Take the Task-based Services Supply Arrangement or the Solution-based Supply Arrangement. Both explicitly state that "eligibility to individual solicitations of offers against the SA may be limited to Canadian suppliers and suppliers of an applicable trading partner." Each Request for Proposal will spell out exactly who can compete. The threshold matters too—for solution-based arrangements, Tier 1 requirements can go up to $3.75 million before you hit different procurement rules.

The mechanism also appears when departments use standing offers or other pre-qualified supplier lists. If fewer than 15 suppliers meet the requirements during the initial qualification phase, they're all automatically selected. But if eligibility is restricted to Canadian suppliers from the start, that pool shrinks before you even begin counting. This is where local content preferences intersect with your solicitation strategy.

Key Considerations

• Trade agreement obligations complicate everything. Canada's international commitments—CFTA, CUSMA, CETA, and others—mean you can't always restrict to Canadian suppliers, even when you want to. Check the thresholds and covered entities before you assume you can limit competition.

• Don't confuse eligibility with qualification. Being an eligible supplier based on origin doesn't mean you're automatically qualified. You still need to meet technical requirements, financial standing, and security clearances if applicable. The Office of Supplier Integrity and Compliance maintains an Ineligible and Suspended Suppliers List—being Canadian won't save you if you're on it.

• Place of business means actual operations. The CFTA definition requires conducting activities "on a permanent basis" in Canada. A mailing address won't cut it. This becomes contentious when foreign companies establish Canadian subsidiaries specifically to access restricted procurements.

• Individual call-ups can have different rules. Within the same supply arrangement, one task authorization might be open to all trading partners while another is Canada-only. Always read the specific solicitation, not just the master agreement terms.

Related Terms

Trade Agreement Thresholds, National Security Exception, Canadian Content Policy

Sources

• Canadian Free Trade Agreement - Chapter Five: Government Procurement

• Task-based Services Supply Arrangement - Canada.ca

• Supply Manual - CanadaBuys

The lesson? Always verify which suppliers are eligible for the specific opportunity you're pursuing. Trade law trumps preference, and the rules change depending on value, department, and what's being bought.