Mandatory Standing Offer (MSO)

A Mandatory Standing Offer (MSO) is a standing offer that Government of Canada departments and agencies are required to use when it meets their requirement. A standing offer is an arrangement in which a qualified supplier offers goods or services to Canada at predetermined prices and terms for a specified period. Buyers then purchase as and when needed through individual call-ups.

The standing offer itself is not a contract, and the government is not obligated to buy the goods or services it describes, as a Government of Canada procurement review explains. The word "mandatory" refers to the buyer's duty to use the instrument. It does not guarantee any supplier a set volume of work.

Who must use a mandatory standing offer

PSPC's buyer guidance on choosing a method of supply says departments and agencies must determine whether a mandatory standing offer or supply arrangement exists. If one meets the requirement, they must use it. The obligation applies to all departments and agencies defined in section 2 of the Financial Administration Act, including the Canadian Forces.

The Treasury Board policy behind it

The requirement comes from Treasury Board policy. Section A.7.2 of the Directive on the Management of Procurement makes the use of PSPC standing offers and supply arrangements mandatory for the commodity classes listed in Table A7. The directive includes an exception for Comprehensive Land Claims Agreements.

Commodity areas and exceptions

Federal mandatory instruments have covered a wide range of purchases. Examples include:

• Clothing and individual equipment
• Communications and detection equipment
• Fuels and lubricants
• Furniture
• Information-processing equipment and software
• Vehicles
• Telecommunications services
• Office machines and office supplies
• Professional and administrative support services

For professional services, the ProServices program page describes standing offers and supply arrangements as mandatory procurement instruments. Client departments, or PSPC when it handles a requisition, must use them unless an exception applies. The listed exceptions are:

• The instrument does not meet justified operational requirements.
• The value exceeds the applicable trade-agreement threshold.
• An existing contract already covers the work.
• Certain land-claims obligations apply.
• The work is an Indigenous-business set-aside for which no mandatory instrument exists.

What it means for a supplier bidding on Canadian public contracts

A Government of Canada supplier guide states that where a mandatory standing offer exists for your goods or services, you must become a standing-offer holder to obtain government business. Qualification happens through the relevant request for standing offer. Each offer is reviewed against the mandatory requirements of the solicitation, as in this federal request for standing offer. Be ready to show compliance with each mandatory requirement and to submit the pricing requested, including rates by category, region or metropolitan area where the solicitation specifies them.

Once you hold a standing offer, work arrives through call-ups or other ordering procedures set out in its terms. Being on the instrument does not itself guarantee purchases. Bid teams should treat qualification as the entry point and plan to compete for call-ups, since buyers must check for a mandatory instrument before considering other methods of supply.