PROC (Product, Resource, Operating and Contingent)

PROC is an acronym for Product, Resource, Operating and Contingent costs. It names a total life cycle costing methodology that aggregates those four cost categories into a single view of what a procurement will cost. The term appears in the Government of Canada's buyer guidance on defining requirements on CanadaBuys.

In that guidance, PROC sits within comprehensive green procurement practices. It is presented as a technique that helps buyers bring environmental considerations into the procurement process while still assessing value for money. Canadian suppliers are most likely to meet the term when a federal buyer explains how it will weigh cost, quality and availability alongside environmental performance.

The four cost categories in PROC

The methodology takes its name from the four categories it combines: product costs, resource costs, operating costs and contingent costs. PROC does not look at one of these in isolation. It aggregates all four so that a buyer can compare options on their combined cost rather than on a single figure.

This is what makes PROC a form of total life cycle costing. The CanadaBuys guidance lists PROC as a method used within Total Life Cycle Costing, so the two terms are closely linked. Total life cycle costing is the broader approach, and PROC is the specific methodology that sets out which cost categories are added together.

How PROC fits into green procurement on CanadaBuys

CanadaBuys is the Government of Canada's procurement information platform, and its buyer's guide covers how to plan a procurement and define the requirement. PROC is described there in connection with comprehensive green procurement practices. The stated purpose is to help integrate environmental considerations into procurement processes.

The guidance places PROC next to other value factors. It is intended to support a value-for-money assessment that takes account of cost, quality and availability. In other words, PROC is one input to a buyer's judgment about value, and it is not a stand-alone scoring system.

Procurements where PROC is recommended

The CanadaBuys guidance recommends PROC particularly for significant projects with substantial operating costs. Two examples are named:

• Major construction projects
• Motor-vehicle purchases

In both cases, the cost of running the asset is a large part of what the buyer will spend, so a view limited to the purchase price would leave out a material share of the total. PROC is aimed at that kind of purchase.

What PROC means for a supplier bidding on Canadian public contracts

If a solicitation uses PROC, a supplier should provide pricing and cost information detailed enough to cover the product, resource, operating and contingent categories that the buyer will aggregate. Thin pricing that shows only a purchase price gives the buyer little to work with when the evaluation is built around total life cycle cost.

The CanadaBuys guidance does not set a universal supplier form or submission requirement for PROC. The solicitation documents control. Read the instructions to suppliers and the evaluation criteria closely, and ask questions through the contact named in the notice if the cost format is unclear. For general background on how federal bidding works, see the Government of Canada pages on the procurement process and on bidding on opportunities.