Item-by-item basis: A Comprehensive Guide

I. Introduction

What Is Item-by-item basis, and Why Does It Matter?

• Purpose:

  A method of awarding contracts where each item in a multi-item requirement is evaluated and awarded separately, allowing for flexibility in meeting Canadian Content Policy requirements.

• Context:

  Item-by-item basis is critical in Canadian government contracting, guiding departments like Public Services and Procurement Canada and the Treasury Board of Canada Secretariat to ensure adherence to procurement policies and supplier diversity goals.

• Overview:

  This guide examines core elements of Item-by-item basis, its role in compliance and efficiency through AI and data analytics, and strategic benefits for Canadian departments managing complex procurements.

II. Definition

A. Clear and Concise Definition

• What it is:

  A method of awarding contracts where each item in a multi-item requirement is evaluated and awarded separately, allowing for flexibility in meeting Canadian Content Policy requirements.

• Key Terms:

  Canadian Content Policy, multi-item requirement, evaluation criteria, award separation

B. Breakdown of Key Components

1. Individual Item Evaluation: Departments assess each line item against defined technical and financial criteria to optimize value for money.

2. Award Segmentation: Awards are issued per item, allowing multiple suppliers to win components of a single solicitation.

3. Additional Components: Reporting Mechanisms: Detailed tracking of compliance with Canadian Content Policy and procurement regulations.

C. Illustrative Examples

• Example 1: In an infrastructure tender, PSPC evaluates steel beams, electrical work and site services separately, using an existing standing offer for concrete delivery while opening bids for specialized trades.

• Example 2: The Department of National Defence issues a supply arrangement for IT hardware where servers, networking gear and support services are scored and awarded independently to meet security and content thresholds.

III. Importance

A. Practical Applications

Item-by-item basis standardizes how Canadian departments evaluate supplier proposals, for example using contract workspaces to manage awards in SAP Ariba Discovery and ensuring each deliverable meets PSPC guidelines.

B. Relevant Laws, Regulations, or Policies

This approach aligns with the Exceptions to Government Contracts Regulation section 6, the Trade Agreement Exceptions and Exclusions, and Treasury Board directives on procurement planning and reporting.

C. Implications

By separating awards by item, organizations achieve cost savings, reduce single-vendor risk and improve post-award performance monitoring through metrics such as vendor performance score.

IV. Frequently Asked Questions (FAQs)

A. Common Questions

• Q: What does Item-by-item basis mean?
  A: It is a procurement method where each element in a multi-item solicitation is evaluated and awarded on its own merits.

• Q: Why is Item-by-item basis important?
  A: It enhances competition, ensures compliance with Canadian Content Policy and delivers tailored value for each requirement.

• Q: How is Item-by-item basis used in practice?
  A: See the examples above, where departments use it to manage complex bids and leverage specialized suppliers.

• Q: Who benefits most from this method?
  A: Both government bodies and small to medium enterprises benefit by focusing evaluations on specific capabilities.

• Q: Can Item-by-item basis speed up contract awards?
  A: Yes, by parallelizing evaluations departments can shorten award timelines for discrete components.

B. Clarifications of Misconceptions

• Misconception 1: Item-by-item basis is complicated.
  Truth: Clear criteria and modern tools like AI analytics simplify implementation and tracking.

• Misconception 2: Item-by-item basis is only for large agencies.
  Truth: Ministries of all sizes can adopt this method to improve transparency and value for money.

V. Conclusion

A. Recap

Item-by-item basis promotes fair competition, compliance and flexible procurement pathways in Canadian government contracting.

B. Encouragement

Government professionals should explore applying this approach in upcoming solicitations to maximize efficiency and policy alignment.

C. Suggested Next Steps

• Learn more from the Treasury Board of Canada Secretariat guidelines.

• Explore training on e-procurement and sourcing events.

• Consult with experts in Supplier Relationship Management for tailored advice.

Related Terms

• Basis of Payment