Total Estimated Value: A Comprehensive Guide

I. Introduction

What Is Total Estimated Value, and Why Does It Matter?

• Purpose: The projected total cost of all call-ups or contracts under a standing offer or supply arrangement, used to determine compliance with trade agreement thresholds before the tendering process.

• Context: Total Estimated Value is critical in Canadian government contracting for deciding when a procurement is subject to agreements such as the Canadian Free Trade Agreement (CFTA) and the WTO Agreement on Government Procurement, benefiting contracting officers, suppliers, and compliance teams.

• Overview: This guide breaks down Total Estimated Value, explores its calculation and practical applications within Public Services and Procurement Canada workflows, and highlights how analytics and AI tools enhance estimation accuracy.

II. Definition

A. Clear and Concise Definition

What it is: The projected total cost of all call-ups or contracts under a standing offer or supply arrangement, used to determine compliance with trade agreement thresholds before the tendering process.

Key Terms: standing offer, supply arrangement, call-up, trade agreement thresholds.

B. Breakdown of Key Components

1. Standing Offer or Supply Arrangement: The framework agreement defining the overall terms, conditions, and maximum quantities or values.

2. Call-up Value: Each individual procurement request against the arrangement, which contributes to the aggregate estimate.

3. Threshold Compliance: Ensures the combined Total Estimated Value triggers or remains below thresholds set by the Directive on the Processing of Low Dollar Value Procurement and international trade agreements like CETA.

C. Illustrative Examples

• Example 1: A regional office of Public Services and Procurement Canada calculates a Total Estimated Value of CAD 1.2 million for a multi-year IT services standing offer, confirming it exceeds the CETA threshold and requires full competitive tendering.

• Example 2: An environmental agency uses a supply arrangement for lab supplies and projects cumulative call-ups under CAD 25 000, qualifying the purchase as a Low dollar value (LDV) procurement under Treasury Board policy.

III. Importance

A. Practical Applications

Within Canadian government procurement, Total Estimated Value standardizes how departments assess supplier proposals. For example, the Treasury Board of Canada Secretariat requires TEV in planning documents to determine if a construction contract must follow Exceptions to Government Contracts Regulations or full WTO-AGP procedures.

B. Relevant Laws, Regulations, or Policies

• Canadian Free Trade Agreement (CFTA): Establishes threshold values requiring open competition when TEV exceeds CAD 130 000.

• WTO Agreement on Government Procurement (WTO-AGP) and CETA: Set TEV thresholds for supranational tenders under international trade rules.

• Treasury Board Policy on Planning and Reporting: Mandates departments to track TEV in submissions to the TB Secretariat to ensure fiscal transparency.

C. Implications

Accurate TEV estimation mitigates legal risks, ensures equitable supplier access, and secures value for taxpayers. Underestimating TEV can trigger non-compliance audits by the Office of the Auditor General, while overestimating may delay procurement cycles.

IV. Frequently Asked Questions (FAQs)

A. Common Questions

1. Q: What does Total Estimated Value mean?
   A: It’s the aggregated projected cost of all anticipated orders under a standing offer or supply arrangement to assess if formal tendering rules apply.

2. Q: Why is Total Estimated Value important?
   A: It ensures procurement processes comply with trade agreement thresholds, supporting transparency and fair competition.

3. Q: How is Total Estimated Value determined?
   A: Procurement officers sum the maximum potential cost of call-ups plus any renewal or extension options defined in the agreement.

4. Q: Can Total Estimated Value change after award?
   A: Yes; Contract amendments or changes in scope, such as through an amendment or Contract Migration Template, can alter the TEV.

B. Clarifications of Misconceptions

• Misconception: ‚ÄúTotal Estimated Value is too complex.‚Äù
  Truth: Following Treasury Board’s clear calculation steps—focusing on maximum volumes and renewal clauses—makes TEV straightforward.

• Misconception: ‚ÄúOnly large departments need to calculate it.‚Äù
  Truth: Agencies of any size, including those handling LDV procurements, should estimate TEV to avoid threshold breaches.

V. Conclusion

A. Recap

Total Estimated Value is a foundational metric in Canadian government contracting that determines whether procurement actions meet or exceed domestic and international thresholds.

B. Encouragement

Procurement teams should incorporate TEV analysis during the planning phase to streamline compliance under frameworks like standing offers and supply arrangements.

C. Suggested Next Steps

• Review the Directive on the Processing of Low Dollar Value Procurement for detailed LDV thresholds.

• Consult the Treasury Board‚Äôs online guidance on TEV reporting requirements.

• Explore training on procurement platforms such as CanadaBuys and SAP Ariba Discovery.