Low dollar value (LDV) procurements

Low dollar value (LDV) procurements are Canadian federal purchases valued below $25,000 for goods and below $40,000 for services and construction, with both amounts including applicable taxes. Public Services and Procurement Canada (PSPC) describes them as purchases that are often made directly from vendors, unlike larger requirements that generally go through a tendering process. See the PSPC page on low dollar value opportunities.

The term is used mainly in federal procurement. PSPC's Buyer's Guide treats LDV as a procurement-strategy category and directs departments to follow PSPC procedures when processing these purchases. The same thresholds appear in the CanadaBuys guidance on determining a sourcing strategy.

The $25,000 and $40,000 thresholds

Two thresholds define an LDV procurement. Goods fall under the LDV category when the value is below $25,000. Services and construction fall under it when the value is below $40,000. PSPC's procurement training material applies the higher threshold to both services and construction and names direct purchasing as a common LDV method, as set out in its introduction to the procurement process.

The Office of the Procurement Ombudsman explains how the value is counted. The amount includes applicable taxes, the estimated value of the contract at award, and any foreseeable amendments. A buyer cannot split a requirement or leave out expected changes to stay under the line. The Ombudsman's low dollar value page sets out these rules and ties the thresholds to the Government Contracts Regulations and federal contracting policy.

Direct purchase is common, but competition still applies

LDV does not mean "no competition." Federal guidance says these purchases are often direct, while the Treasury Board contracting policy expects organizations to seek bids when doing so is cost-effective. The Procurement Ombudsman confirms this expectation on its low dollar value page.

An LDV requirement can be handled in several ways, depending on the department's delegated authority and the applicable procedure:

• a direct purchase from a supplier
• a request for quotations
• an acquisition card
• a local purchase order
• a call-up against a standing offer

This list comes from a departmental delegation of spending authority chart, which shows that the method depends on what each department is authorized to use.

Delegated authority for LDV purchases

Not every purchase runs through PSPC. PSPC's acquisitions policy instruments state that the PSPC Minister has delegated authority to procure goods up to $25,000, described there as LDV transactions, to specified departments and agencies listed in Schedules I, I.1 and II of the Financial Administration Act. The details are in the acquisitions program policy instruments on CanadaBuys.

This means the buyer for an LDV purchase is frequently a program or contracting officer inside the department that needs the item, not a central PSPC team.

LDV in professional services and Indigenous procurement

Professional services are a visible part of LDV activity. The Canadian Administrative Tribunal Support Service describes federal LDV professional-services contracts as those with an estimated total expenditure that does not exceed $40,000 including taxes, and notes that such contracts can be awarded without competition under applicable federal rules. Its audit of low dollar value professional services procurement covers this in detail.

Departmental programs also shape LDV buying. Indigenous Services Canada reports that centrally managed internal LDV procurements were considered for competition among Indigenous businesses first, as described on its procurement reporting page.

What LDV means for a supplier

Do not assume an LDV purchase will be posted publicly. Because PSPC states that these purchases are often direct, suppliers generally need to make their capability and pricing visible to departmental buyers. They also need to be ready to answer a request for quotations or an invitation sent directly to them.

Suppliers should check the dollar value against the goods and services thresholds, and remember that taxes and foreseeable amendments count toward the total. PSPC's supplier guidance on low dollar value opportunities is the starting point for understanding how these buys reach the market.