Standing Offers/Supply Arrangements

In Canadian federal procurement, a standing offer is an offer from a supplier to Canada to provide goods, services, or both at pre-arranged prices and under established terms and conditions, when required. It is not a contract. A contract exists only when Canada issues a call-up against the standing offer, as the Government of Canada's policy interpretation on standing offers explains.

A supply arrangement is a non-binding arrangement that sets terms and conditions for a specified range of goods or services, normally supplied by pre-qualified suppliers at negotiable prices. It supports individual bid solicitations and the contracts that result from them. Signing the arrangement alone does not create a contract. Both tools are administered primarily by Public Services and Procurement Canada (PSPC) and are listed on CanadaBuys.

How a standing offer turns into a contract

A department or agency uses a standing offer when it has a recurring requirement but does not know the exact quantity, timing, specifications, or level of effort in advance. Suppliers respond to a Request for Standing Offer (RFSO) with fixed, predetermined prices. Authorized organizations, known as client departments or identified users, then order against the offer as needs arise.

Each order is a call-up, and the call-up creates the contract. Canada has no obligation to purchase anything merely because a standing offer exists. A supplier that submits an RFSO response generally agrees to provide the goods or services at the offered prices during the stated period if a valid call-up is issued. PSPC describes this approach in its guidance on bidding.

How a supply arrangement creates a pool of suppliers

A Request for Supply Arrangement (RFSA) invites suppliers to qualify for a defined range of goods or services. Those that qualify become pre-qualified suppliers. When a department has a specific need within the arrangement's scope, it defines the requirement and solicits bids from that pool. The winning bidder receives the contract for that requirement.

Prices under a supply arrangement are generally negotiable within the arrangement's terms or any stated ceiling price. Qualification alone does not guarantee work, because the supplier must still win each competition. The Department of National Defence describes supply arrangements in the same way in its procurement overview.

Choosing between the two methods

The two tools suit different situations. A standing offer works when terms and prices can be fixed in advance. A supply arrangement is used when a standing offer is unsuitable because variables in the resulting call-ups make fixed terms or pricing inappropriate. PSPC sets out this distinction in How the government buys.

• Standing offer: predetermined and fixed prices, with contracts formed through call-ups.
• Supply arrangement: pre-qualified suppliers, with a competitive process for each specific requirement.

CanadaBuys also covers both tools in its buyer's guide.

The $3 million limit in public opinion research

Some programs attach value limits to supply arrangements. In federal public opinion research, eligible projects valued at no more than $3 million including applicable taxes may be contracted through supply arrangements, and a competitive process is still required for each individual requirement. PSPC states this on its public opinion research contracting page. PSPC also notes that standing offers provide federal departments with an inventory of pre-qualified suppliers.

What this means for a supplier

Getting onto a standing offer or supply arrangement is a first step, not a sale. With a standing offer, your prices are locked for the stated period, so price them to hold across every call-up you may receive. With a supply arrangement, you must qualify first and then respond to each competitive solicitation to win contracts. Watch the CanadaBuys listings for RFSOs and RFSAs in your field, and read the scope and eligibility terms closely before you respond.