Mandatory Standing Offer

When you're procuring certain goods and services in the federal government, you don't always get to choose your vendor. A Mandatory Standing Offer removes that discretion for specific commodities, requiring departments and agencies to use pre-approved suppliers that have already been competitively selected. Think of it as a pre-set menu—you can choose what to order and when, but you can't go to a different restaurant.

How It Works

The concept gained teeth in April 2005 when Treasury Board revised its Contracting Policy to make standing offers mandatory for 10 specific commodities. According to the Procurement Practices Review, this change was designed to increase the use of these instruments across government. Public Works and Government Services Canada (now PSPC) establishes these arrangements through a competitive process. When your department actually needs something, you use a call-up procedure.

Here's the thing: a standing offer creates no obligation until you issue a call-up against it. The supplier has made a continuous offer to government. When your department needs one of those mandatory commodities—say, Information Processing Services (commodity code D) or Motor Vehicles (N23)—you're required to use the designated standing offer rather than running your own competition. You can't just shop around. Other mandatory categories include Professional Services (R), Telecommunications (N58), and ADP Equipment (N70), among others.

The Supply Manual lays out the framework in Section 1.001, distinguishing these mandatory instruments from optional supply arrangements. While both are methods of supply put in place by PSPC, the mandatory designation removes procurement discretion from client departments and agencies. Your job is straightforward: identify your need, verify it falls under a mandatory commodity, then issue your call-up against the appropriate standing offer.

Key Considerations

• Compliance isn't optional. The Common Services Policy and Treasury Board directives make these mandatory for all federal departments and agencies. Running your own competition for a mandatory commodity will trigger compliance issues during audits.

• Limited to specific commodities. Don't assume every common purchase has a mandatory standing offer. The list of 10 commodities established in 2005 is specific, and requirements outside those categories may have optional supply arrangements or require separate procurement processes.

• No purchase obligation exists until call-up. The standing offer itself doesn't commit government funds or guarantee volume to suppliers. Your department only creates an obligation when it issues a specific call-up for goods or services.

• PSPC manages the competitive process. Individual departments don't establish these instruments—PSPC runs the competition, evaluates offers, and sets up the standing offer. Your role is using it correctly when the need arises.

Related Terms

Standing Offer, Supply Arrangement, Call-Up, Methods of Supply

Sources

• Supply Manual: Standing Offer, Section 1.001 - Government of Canada

• Procurement Practices Review - Chapter 4: Mandatory Standing Offers - Office of the Procurement Ombudsman

• Government of Canada Supply Manual - CanadaBuys

In practice, understanding which commodities require mandatory standing offers saves you from starting unnecessary procurement processes. Check the commodity codes before you plan your acquisition strategy—it's the simplest way to avoid wasting time on a competition you're not allowed to run.