Plan the Procurement Strategy

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What is a procurement strategy?

A procurement strategy defines in general terms how a good, service, or construction will be procured. It will include, at the highest level, the determination to proceed competitively or non-competitively and applicable details in support of industrial and regional benefits or other national objectives. The strategy could be quite basic, such as the decision to use a standing offer, or could be more detailed, which would be used for major projects.

Thresholds for buying goods

For goods, departments can generally buy up to a maximum of $25,000 CAD.

Low dollar value procurements are mainly bought by credit card; cards are gradually replacing the local purchase order as a method of purchase. The credit card is simple and leaves a sufficient audit trail for your client to be able to report such purchases.

A higher procurement threshold to buy goods is available to departments through the use of call-ups against a PWGSC issued standing offer or the awarding of contracts under a PWGSC issued supply arrangement. The procurement threshold for departments to use these agreements to buy goods are specified within the individual standing offer or supply arrangement.

Goods purchases that exceed Treasury Board contracting limits must obtain Treasury Board approval.

International and internal trade agreements, as well as Comprehensive Land Claims Agreements have a considerable impact on buying goods. Procurements of goods valued at or in excess of the following values may be subject to specific agreements:

  • $26,400 CAD - Canadian Free Trade Agreement (CFTA)
  • $100,000 CAD - Canada-Korea Free Trade Agreement
  • $238,000 CAD - World Trade Organization - Agreement on Government Procurement (WTO-AGP)
  • $238,000 CAD – Canada-European Union Comprehensive and Economic Trade Agreement (CETA)

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Thresholds for buying services

Service purchases in departments have higher procurement thresholds but are also subject to additional contracting rules and regulations.

For services, departments can generally do their own buying up to the following thresholds:

  • $400,000 CAD for competitive procurements
  • $100,000 CAD where there is no competition (sole sourcing)
  • $2 million CAD by competing services requirements on the Tenders minisite.

Treasury Board approval must be sought when the purchase exceeds $2 million CAD.

Directing services contracts of $25,000 CAD to $100,000 CAD to suppliers without competition (or sole sourcing) must be justified in accordance with the Government Contracts Regulations. Although you should strive as much as possible to buy in open competition, you may buy services valued up to $25,000 CAD from one supplier.

Contracting for services is more complex than buying goods. Where technical specifications or performance specifications are important in the purchase of goods, in contracting for services, you must ensure, as you saw earlier, that the Statement of Work clearly describes the work to be carried out, the objectives to be attained and the time frame during which the work must be carried out.

International and domestic trade agreements, as well as Comprehensive Land Claims Agreements have a considerable impact on buying services. Procurements of services valued at or in excess of the following values may be subject to specific agreements:

  • $100,000 CAD - Canada-Korea Free Trade Agreement
  • $105,700 CAD - Canadian Free Trade Agreement (CFTA)
  • $238,000 CAD - World Trade Organization - Agreement on Government Procurement (WTO-AGP)
  • $238,000 CAD – Canada-European Union Comprehensive and Economic Trade Agreement (CETA)

Competitive procurement

Contracts above $25,000 CAD

Many of the requirements over $25,000 for goods, and over $40,000 for services and construction contracts, including all applicable taxes, are published on the Government Electronic Tendering Service (GETS) available on the Tenders minisite. Various databases (such as ProServices and SELECT) allow contracting officers to purchase up to $100,000 of professional services and real property consulting services and up to $100,000 for construction services without publishing on the Tenders minisite.

For more information on these database systems, consult the Register to Provide Services Web page.

Contracts below $25,000 CAD

For requirements below $25,000 for goods, and below $40,000 for services and construction contracts, including all applicable taxes, contracting officers may request quotations from suppliers directly. These requirements are considered by PWGSC as low dollar value procurement. In this case, contracting officers will determine the most appropriate procurement strategy for each requirement to obtain best value and ensure the timeliness and cost-effectiveness of each contract. They may use various methods of supply to identify and select a supplier on either a competitive or non-competitive basis. Often, suppliers may be selected from the Supplier Registration Information system.

Standing Offers and Supply Arrangements

Standing offers and supply arrangements are two types of non-binding agreements between the federal government and potential suppliers for the supply of specified goods or services. These agreements outline the terms and conditions that will apply to future requirements to be ordered on an "as and when required" basis.

For more information, please see the PWGSC Supply Manual:

Non-competitive procurement or sole source buying

This refers to a requisition which specifies that a particular supplier is the only one acceptable. The sole source requisition must contain justification for requesting this specific course.

The Government Contracts Regulations require the competitive soliciting of bids before any contract is entered into. However, contracts may be entered into without soliciting bids when:

  • There is a pressing emergency such as natural disasters like earthquakes or floods; or
  • The estimated expenditure is less than;
    • $25,000 CAD for goods and services (buyers are still expected to solicit bids below this value whenever it is cost effective to do so); or
    • $100,000 CAD for architectural and engineering services and other services required in respect of the planning, design, preparation or supervision of the construction, repair, renovation of a work; or
    • $100,000 CAD for the Canadian International Development Agency (CIDA) service contracts related to international development programs or projects; or
  • A competition is not in the public interest; or
  • Only one supplier is capable of performing the work, as in the case of a supplier who owns a copyright or software license.

For more information, please see the PWGSC Supply Manual, Chapter 3: Section 3.15 Non-competitive Contracting Process.

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Trade agreements

Canada is a Party to the following trade agreements which include obligations aimed at reducing trade barriers between the Parties in the area of government procurement:

If a procurement is subject to any of the trade agreements, PWGSC is required to comply with specific procedures when completing the procurement. Therefore a process must be followed to determine whether or not the requisition is subject to a particular agreement, or a combination of agreements. While procedural rules and coverage of the trade agreements are generally similar, all trade agreements, including the bilaterals, should be consulted.

For more information, please see the PWGSC Supply Manual, Chapter 1: Section 1.25 Agreements.

Indigenous considerations

The federal government has a duty to consult and, where appropriate, accommodate when it contemplates conduct that might adversely impact established or potential section 35 rights of the Constitution Act of 1982.

The scope of the required consultations can vary significantly. The strength of the claim, the nature of the right and severity of the potential harm or a federal government decision or action on section 35 rights will determine the level of consultation required.

The following must be considered when planning your procurement:

  • assessing the procurement’s potential adverse impacts on Indigenous groups;
  • determining if consultation should form part of your procurement process and if required;
  • consulting with Indigenous groups that may be impacted early in the planning, design or decision making processes, well before contracting details are finalized.

For more information, departments should refer to the Government of Canada Updated Guidelines for Federal Officials to Fulfill the Duty to Consult. Consultation-related queries can be sent to Crown-Indigenous Relations and Northern Affairs Canada (CIRNA) at aadnc.cau-uca.aandc@canada.ca

The federal government has a number of Comprehensive Land Claims Agreements (CLCAs) with Indigenous peoples. Treaties (also known as Comprehensive Land Claims Agreements (CLCAs)) with Indigenous peoples. Most of these Modern Treaties/CLCAs contain obligations that impact the overall procurement strategy. These obligations apply where the deliverable(s), or a portion of the deliverable (s), include final delivery or performance in or into a Modern Treaty/CLCA area. For more information, please see the Supply Manual, Chapter 9: Section 9.35 Modern Treaties.

In addition, the Procurement Strategy for Aboriginal Businesses (PSAB) initiative was developed to provide Indigenous businesses with greater opportunities to sell their goods and services in the federal marketplace. For more information on PSAB, please see Indigenous Services Canada website and the Supply Manual, Chapter 9: Section 9.40, Procurement Strategy for Aboriginal Business.

Nunavut Directive

On August 15, 2019, the Government of Canada announced the new Treasury Board Directive on Government Contracts, Including Real Property Leases, in the Nunavut Settlement Area . The Directive was developed in close consultation with the Nunavut Tunngavik Incorporated (NTI), the Designated Inuit Organization (DIO) for the Agreement between the Inuit of the Nunavut Settlement Area and Her Majesty the Queen in right of Canada (Nunavut Agreement).

The implementation of this Directive supports Government of Canada’s obligations under Article 24 (Government Contracts) of the Nunavut Agreement to provide reasonable support and assistance to Inuit firms to enable them to compete for government contracts, for the supply of goods, services, construction services and real property leases. The Directive prescribes procurement measures designed to provide support and assistance to Inuit firms to compete for government contracts, including the supply of goods, services, construction services and real property leases. The Directive also requires bid evaluation criteria related to Inuit and Nunavut Benefits in certain circumstances.

A government-wide guide titled Guide on Government Contracts in the Nunavut Settlement Area (the Guide) has been developed to assist contracting authorities and technical authorities to fulfill the obligations of the Directive.

Guide on Government Contracts in the Nunavut Settlement Area:

Green procurement

The purchase of green goods and services is an objective for many Canadian government departments and agencies.

There are online resources available to identify green products and services including the following:

For more information, please see the PWGSC Supply Manual, Chapter 3: Section 3.65 Green Procurement Strategy.

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Small and medium enterprises

The Office of Small and Medium Enterprises (OSME), Public Services and Procurement Canada, helps small and medium enterprises (SMEs) participate in the federal government procurement process.

For more information, please see PWGSC Supply Manual, Chapter 3: Section 3.75 Small and Medium Enterprise.

For more information about SMEs and procurement strategies, please see the section entitled: Tips for Developing Inclusive Procurement Strategies.

Security requirements

Requisitions containing a requirement for physical security, information technology security or personnel security screening must include a Security Requirements Check List (SRCL) - Treasury Board of Canada, particularly if the contracting is being done by PWGSC.

For more information, please see the PWGSC Supply Manual, Chapter 3: Section 3.55 Industrial Security Requirements (Personnel or Organization).

Official languages

The policy about the use of the two official languages is that both official languages must be used when you buy goods and services for your clients. The rules are simple:

  • When you open a competition nationally or you buy in a bilingual area, all regular or standard documents for the competition, as well as the contract document, must be prepared in both English and French; this rule applies equally to public notices, statements of terms and conditions, basic forms, bid solicitations, standards, and purchase descriptions.
  • If specifications, for example, are part of your solicitation documents, you must find out if they should be in both official languages to ensure information to contractors is provided in the language of their choice.
  • Such documents may be in only one official language when it is certain that they won't be requested in the other, but must be made available if they are requested in the other official language by a significant number of potential bidders.

For more information, please see the PWGSC Supply Manual, Chapter 4: Section 4.20 Official Languages Obligations in Procurement.

For more information

For more information, please see the PWGSC Supply Manual, Chapter 3: Procurement Strategy.