Standing Offer Agreement (SOA)

A Standing Offer Agreement (SOA) is an arrangement under which a supplier offers to provide specified goods or services to a government organization, as and when requested, at predetermined prices or pricing methods and under stated terms and conditions for a defined period. The Treasury Board defines a standing offer as an offer from a potential supplier to provide goods, services or both on the pricing basis and under the terms and conditions stated in the offer. Treasury Board definitions set out this wording.

The SOA itself is generally not a contract, and the government is not obliged to buy anything under it. A contract is formed only when the organization issues a compliant call-up or order. Standing offers suit recurring requirements, where the general need, terms and pricing can be settled in advance but the exact quantity or timing is not known.

How a call-up turns a standing offer into a contract

The CanadaBuys buyer's guide explains that a standing offer fits situations where Canada may acquire goods or services over a specified period through a call-up process, using predetermined conditions and pricing. It also states that a call-up against a standing offer is a contract. CanadaBuys: choose a method of supply covers this method alongside the other options.

A separate contract is entered into each time a call-up is made. The National Capital Commission (NCC) states this in its own solicitation: the offeror offers to provide the listed goods or services at stated prices or rates as and when requested, the standing offer is not a contract, and a purchase order forms a contract only for the goods or services called up under the standing-offer provisions. See the NCC request for standing offer.

Standing offers, supply arrangements and task authorizations

Three related terms are easy to confuse.

• Call-up: an order or contract issued against a standing offer. The call-up is a contract; the standing offer is not.
• Supply arrangement: a different method of supply in which pre-qualified suppliers compete for individual requirements through a subsequent solicitation.
• Task authorization: a mechanism used under certain service contracts to authorize work as and when requested. It is not the same as a call-up against a standing offer.

The Office of the Procurement Ombudsman describes the difference between standing offers and supply arrangements in its review of procurement practices.

Who uses standing offers in Canada

Federal departments and agencies use standing offers to buy goods and services they need repeatedly. Public Services and Procurement Canada and other common service providers establish and maintain government-wide methods of supply. The Treasury Board Directive on the Management of Procurement requires common service providers to publish and maintain lists of standing offers and supply arrangements available to departments. Read the directive for the requirement.

Organizations such as Canada Mortgage and Housing Corporation use the same approach for products or services that are needed repeatedly, can be delivered as required and can be priced for the standing-offer term. The term is used outside the federal government too. A CanadaBuys-hosted tender notice states that Manitoba will execute a Standing Offer Agreement on behalf of members of a buying group. The legal effect and ordering rules depend on the terms of each solicitation.

Reporting standing offers as SOSA

Treasury Board guidance treats a standing offer agreement and a supply arrangement agreement as instruments that are not procurement contracts, but that must still be reported for transparency purposes. In federal proactive publication, the instrument type for both is SOSA, while a call-up against either is reported as a contract instrument, C. The proactive publication guidance sets out the codes.

What an SOA means for a supplier

Being named on a standing offer does not guarantee revenue, because the government has no obligation to purchase. A supplier responding to an SOA opportunity submits an offer that meets the technical, pricing, eligibility and contractual requirements of the solicitation, and accepts the stated terms if selected. The supplier must then honour the offered prices, rates or pricing method throughout the standing-offer period and deliver when a valid call-up is issued. Each call-up is performed under its own scope, delivery, payment and security requirements. Bid teams should price for the full period of the offer and check how call-ups will be issued before they submit.