Mandatory Standing Offers

When the federal government mandated the use of specific Standing Offers in Budget 2005, it fundamentally changed how departments procure common goods and services. These arrangements—which you must use before exploring other options—were designed to consolidate purchasing power and drive down costs across government. Think of them as pre-negotiated deals that you're required to check first.

How It Works

The Treasury Board revised its Contracting Policy in April 2005 to make Standing Offers mandatory for 10 specific commodities. According to the Procurement Practices Review, this meant that all government departments had to use Standing Offers or other methods of supply established by Public Works and Government Services Canada (now PSPC) before considering alternative procurement approaches. The original 10 commodities included Information Processing and Related Telecom Services, Professional and Administrative Management Support Services, Motor Vehicles and Ground Effect Vehicles, Telecommunications Equipment, and General Purpose Automatic Data Processing Equipment, among others.

Here's the thing: a Standing Offer isn't actually a contract until you issue a call-up against it. As detailed in the Government of Canada Supply Manual, these are offers from suppliers to provide well-defined goods or services at prearranged prices, under set terms and conditions, for a specific period. When your department needs something covered by a mandatory Standing Offer, you must use that vehicle first. You can't establish your own arrangements for those commodities. You also can't skip to a competitive process without solid justification and the right approvals.

In practice, PSPC maintains a wide variety of these instruments to cover frequently required items across government. The 2011 Audit of Standing Offers and Supply Arrangements clarified that these provide administrative agreements with suppliers at pre-arranged prices or pricing methods—essentially framework agreements ready for your use. The mandatory requirement means you're obligated to check these centralized vehicles before pursuing other procurement methods, ensuring consistent pricing and terms across departments.

Key Considerations

• Limited exceptions exist. While the policy makes these Standing Offers mandatory, there are circumstances where you can pursue alternative procurement—but you'll need solid justification and appropriate approvals before deviating from the mandatory vehicle.

• No contract until call-up. Many procurement officers misunderstand this point. The Standing Offer itself is just an agreement framework. Your department only enters into a binding contract when you actually issue a call-up order against it.

• Centralized control matters. You cannot establish your own Standing Offer for commodities where PSPC has already created a mandatory vehicle. This centralization is intentional—it's how government achieves volume pricing and consistent terms.

• Compliance is monitored. The Procurement Ombudsman and internal auditors regularly review departmental use of mandatory Standing Offers. Non-compliance without proper justification can trigger reviews and corrective action.

Related Terms

Standing Offer, Supply Arrangement, Methods of Supply

Sources

• Government of Canada Supply Manual - Official federal procurement policy and procedures

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

• 2011 Audit of Standing Offers and Supply Arrangements - Public Works and Government Services Canada

Before you start a competitive process for common goods or services, always verify whether a mandatory Standing Offer exists. It'll save you time and potential compliance headaches down the road.