Phased Delivery

When you're managing a complex procurement, delivering everything at once can create headaches—budget strain, implementation challenges, or requirements that shift mid-project. Phased delivery breaks your contract into distinct stages, letting you receive goods or services progressively as your project evolves. It's a practical way to manage risk while maintaining flexibility.

How It Works

Under phased delivery, you structure your contract so that deliverables arrive in predetermined stages tied to project milestones, budget cycles, or operational readiness. The Government of Canada Supply Manual recognizes this approach as particularly valuable for IT implementations, infrastructure projects, and service contracts where requirements may need refinement between phases.

Each phase typically has its own acceptance criteria and payment schedule. You might release payment only after verifying that Phase 1 deliverables meet your standards, which gives you negotiating power to ensure quality before committing to subsequent phases. PSPC often structures major IT procurements this way—think system design in Phase 1, development in Phase 2, and deployment in Phase 3. This mirrors how departments like SSC manage large-scale network modernization projects, where rolling out changes to all systems simultaneously would be operationally disastrous.

The approach also aligns well with federal budget realities. Instead of requiring full funding upfront, you can spread expenditures across multiple fiscal years—each phase becomes its own financial commitment, making it easier to secure Treasury Board approval for high-value initiatives. In practice, this means you can start a multi-year project even when full funding hasn't been confirmed for years two and three, though you'll need appropriate contract language to address what happens if later phases don't proceed.

Key Considerations

• Contract terms need careful attention: Your agreement should clearly define what triggers progression to the next phase, who makes that decision, and what happens if you decide not to proceed. Vague milestone definitions create disputes.

• Price escalation clauses matter more: When your contract spans multiple years through phased delivery, you're exposed to cost increases between phases. Address this upfront—will prices remain firm, or will you allow adjustments based on indices?

• Don't confuse phases with multiple awards: Phased delivery involves one supplier progressing through stages. If you're evaluating performance after each phase to decide whether to continue with the same vendor or compete the next stage, that's a different procurement model entirely.

• Your evaluation criteria should reflect the phased approach: When reviewing bids on Buy and Sell, assess whether vendors understand the staged nature and have realistic plans for each phase. A vendor who assumes simultaneous delivery across all phases hasn't read your requirements.

Related Terms

Task Authorization, Standing Offer, Multiple Release Contract, Incremental Delivery

Sources

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

• Canada Buys - Federal government procurement information portal

• Buy and Sell - Federal tender opportunities database

Phased delivery gives you control and flexibility, but only if your contract clearly defines what each phase entails and how progression decisions get made. Get that foundation right, and you'll avoid the confusion that derails projects halfway through.