Table of Contents
- What are supply arrangements?
- When are supply arrangements used?
- Why are supply arrangements used?
- How are supply arrangements issued?
- When are supply arrangements issued?
- Types of supply arrangements
- Award of a contract resulting from a supply arrangement
- Contractual obligations
- Financial limitations
- For more information
What are supply arrangements?
A supply arrangement is a method of supply used by Public Works and Government Services Canada (PWGSC) to procure goods and services. Like standing offers, it is not a contract and neither party is legally bound as a result of signing a supply arrangement alone.
Supply arrangements include a set of predetermined conditions that will apply to bid solicitations and resulting contracts. They allow client departments to solicit bids from a pool of pre-qualified suppliers for specific requirements. This differs from standing offers that only allow client departments to accept a portion of a requirement already defined and priced. Many supply arrangements include ceiling prices which allow client departments to negotiate the price downward based on the specific requirement.
When are supply arrangements used?
Supply arrangements are used when goods or services are bought on a regular basis but when a standing offer is not suitable because of variables in the resulting call-ups (e.g. there are varying methods or bases of payment, or when the statement of work or commodity required cannot be adequately defined in advance). Individual requirements are either procured on a competitive basis or negotiated based on a specific requirement.
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Why are supply arrangements used?
Supply arrangements save time and money by prequalifying suppliers and establishing the basic terms and conditions that will apply to a specified range of goods or services. They also give client departments the flexibility to either solicit bids competitively or negotiate for their specific requirements to obtain the best value possible.
How are supply arrangements issued?
Supply arrangements are generally issued following a Request for Supply Arrangements (RFSAs) process. Except for those procurements where public advertising is not required or used, RFSAs are published on the Tenders minisite and suppliers who are interested in responding to individual bid solicitations are invited to submit an arrangement to become pre-qualified suppliers. The list of pre-qualified suppliers is used as a source list for the procurement and only suppliers who are pre-qualified at the time individual bid solicitations are issued are eligible to bid.
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When are supply arrangements issued?
Just as for standing offers, there is no set rule as to when supply arrangements are issued. Generally, it is important to watch for RFSAs that may be published several months before the anticipated effective date of a supply arrangement.
Access the weekly updated Standing Offers and Supply Arrangements data to find current supply arrangements in your business sector.
Types of supply arrangements
Supply arrangements can be issued for national or regional use by departments or agencies. The geographic range and intended users are outlined in the supply arrangement.
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Award of a contract resulting from a supply arrangement
Either PWGSC or client departments prepare contracts within the scope of the supply arrangement. For requirements that are not subject to the trade agreements, bids are solicited only from qualified suppliers that have a supply arrangement.
For requirements that are subject to the trade agreements, a Notice of Proposed Procurement is published on the Tenders minisite, to alert other potential suppliers to the opportunity to qualify and submit a bid for the specified requirement. An RFSA is issued, bids are evaluated and a supplier is selected.
Supply arrangements include a set of predetermined conditions that apply to subsequent bid solicitations and contracts. Only the specific client department requirements and price must be agreed upon. When the competitive process is not used, and ceiling prices are established within the supply arrangement, client departments generally negotiate a lower price or rate from the stated ceiling prices based on the actual work or commodity required.
No legal contract exists; therefore, there is no obligation for the department or agency to buy until the supplier has submitted its bid and it has been accepted. Each contract awarded is considered to be a legally binding contract established between the client department and the supplier.
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Contracting officers will set the contracting limits for the client department as defined in the supply arrangement, as the case may be. For goods, services or construction, they may set the maximum contracting limits using the Treasury Board Contracts Directive (Appendix C) as a guide.
For more information
For more information about supply arrangements, contact your nearest PWGSC Regional Office.