Non-Competitive Standing Offer

A non-competitive standing offer is a standing offer established without a competitive solicitation. The buyer selects the supplier directly and must record the reason for doing so. Under Government of Canada guidance, call-ups issued against a standing offer that was set up non-competitively are also considered non-competitive. The same treatment applies when the standing offer has no clear ranking methodology. See the CanadaBuys sourcing strategy guidance.

A standing offer is an offer from a supplier to provide goods or services at pre-arranged prices and under set terms and conditions, when and if the buyer needs them. A contract exists only once the buyer issues a call-up, as described in a CBSA audit report. The word "non-competitive" describes how the offer was established, not what the offer contains.

What a standing offer is and is not

Standing offers and supply arrangements are procurement instruments. Public Services and Procurement Canada (PSPC) explains in its briefing material that neither is a legally binding contract, and neither guarantees work to a supplier. Holding a non-competitive standing offer therefore gives a supplier a pre-approved route to work, not a promise of revenue.

PSPC acts as the central purchasing agent for federal departments and agencies and establishes many of these instruments on their behalf. CanadaBuys publishes guidance on standing offers and supply arrangements for buyers. It names the Advance Contract Award Notice (ACAN) as a mechanism associated with a non-competitive request for standing offers.

Rationale and call-up rules

A buyer who issues a non-competitive standing offer must provide a rationale that justifies the procurement method. The client department must also provide the non-competitive rationale for the call-ups that follow. Both requirements appear in the CanadaBuys guidance.

This means the justification is not a one-time step. It is documented when the offer is created and again each time work is ordered against it.

Documented example: the McKinsey benchmarking offer

PSPC established a National Master Standing Offer (NMSO) with McKinsey & Company in 2021 for proprietary benchmarking services. It was set up on a non-competitive basis because of the proprietary nature of the services, according to PSPC briefing material.

Use of the offer was documented in detail. PSPC reported that 19 contracts were issued as call-ups against it between February 2021 and February 2023. A National Defence internal audit found that 12 contracts of the Department of National Defence and the Canadian Armed Forces were call-ups against the same non-competitive NMSO.

PSPC then tightened the process. Client departments were required to prepare their own Statement of Work and to provide a sole-source justification for every contract awarded under a non-competitive standing offer for benchmarking services. This is recorded in a PSPC House of Commons question note. PSPC also stated that it would not renew that type of procurement vehicle.

What it means for a supplier

A non-competitive standing offer is usually tied to a justification such as proprietary services, so a supplier cannot expect to compete its way onto one through an open tender. Suppliers who believe they can meet the same need can watch for an ACAN, which gives them a window to show they are capable.

Suppliers who hold such an offer should expect scrutiny of each call-up. Every order needs its own non-competitive rationale from the client department, and a standing offer does not guarantee that any call-up will come. Bid teams should track how departments document these rationales, because the McKinsey case shows that stricter requirements can follow public review.