ARCHIVED Mandatory Standing Offers

Introduction

In Budget 2005 the government announced that as part of its action plan to realize procurement savings it will be mandatory for departments to use 'standing offers' negotiated by Public Works and Government Services Canada (PWGSC).

'Standing offers' (the quotation marks were in the actual Budget document), for this purpose was a broad term that includes standing offers, supply arrangements and other procurement instruments put in place by PWGSC. However, for the purposes of this Policy Notification, the terms 'standing offers', and 'supply arrangements' are explicit.

Policy

Effective April 1, 2005, the use of standing offers and supply arrangements within ten commodity groups listed below becomes mandatory across the government. Treasury Board confirmation of this is anticipated soon.

In coming months, more standing offers and supply arrangements may be added within these commodities, and more commodities will be added. Also, again based on commodity reviews, the mandatory concept may be extended to include government-wide contracts.

On receipt of a requisition for any goods or services within these identified commodity groups, PWGSC contracting officers must determine if an existing standing offer or supply arrangement can meet the requirement. If so, that standing offer or supply arrangement must be utilized. There are only a few exceptions (listed below) whereby a contracting officer may use another method of supply.

For goods and services not in the ten commodity groups listed below, and for goods and services within those groups where no standing offer or supply arrangement exists, all other contracting procedures and approaches remain applicable and available for use.

As of April 1, 2005, the use of standing offers and supply arrangements within the following commodity groups becomes mandatory. Any such standing offer and supply arrangement becomes a 'Mandatory Standing Offer' as described in the Budget.

• N23 Ground Effect Vehicles, Motor Vehicles, Trailers, and Cycles/Véhicules à l'effet de sol, véhicules-moteur, remorques et cycles
• N58 Telecommunications Equipment and Accessories/Équipements des télécommunications, de détection et à rayonnement cohérent
• N70 General Purpose Automatic Data Processing Equipment (including Firmware), Software, Supplies and Support Equipment/Équipement pour le traitement automatique de données à usage général, logiciel, comprenant la microprogrammation, fournitures et équipement de soutien
• N71 Furniture/Mobiliers
• N74 Office Machines, text processing systems and visible recording equipment/Machines de bureau, systèmes de traitement des textes et équipement à classement visible
• N75 Office Supplies and Devices/Fournitures de bureau
• N84 Clothing, Accessories and Insignia/Vêtements, équipement individual et insignes
• N91 Fuels, Lubricants, Oils and Waxes/Carburants, lubrifiants, huiles et cires
• D Information Processing and Related Telecom Services/Traitement de l'information et services de télécommunications connexes
• R Professional, Administrative and Management Support Services/Services professionnels, administratifs, et de soutien à la gestion

Background

The Way Forward is a wide-ranging strategy led by Public Works and Government Services Canada (PWGSC) to find innovative ways to deliver services smarter, faster and at a reduced cost, and to improve how the Government of Canada does business.

PWGSC provides services that are common to all federal government departments and agencies to help them focus on their own vital roles of serving Canadians — services that include real estate management, goods and services purchasing, IT, as well as translation and consulting and audit.

The Way Forward is part of PWGSC's ongoing commitment to help modernize government and provide the best service to Canadians. It is also part of the government's agenda to improve management and accountability, save money and reallocate the savings to higher priorities such as health care, early childhood development, a new deal for communities and the environment.

Achieving significant savings through improved procurement processes is a core element of The Way Forward, and making the use of standing offers and supply arrangements mandatory is the first step down that road.

Standing offers and supply arrangements have always been recognized as a fast way to obtain goods and services, with low costs to government of handling the transaction. In many cases they also offer significant price savings, compared to going to the open market.

The first stage of the 'Way Forward Initiative' will start to produce savings for the Government of Canada through the mandatory use of PWGSC standing offers and supply arrangements. In subsequent stages we will work to improve our approach to standing offers, supply arrangements and other procurement approaches such that we provide more savings and better service to all Government of Canada users.

Procedures

(a) Departments

Departments and agencies continue to be able to acquire goods and services as they have in the past. However, as of April 1, they must first verify whether a mandatory standing offer or supply arrangement exists that meets their requirements. If it does, they must use it.

When the Government of Canada Marketplace (GoCM) becomes operational, and a department with a requirement has access to the GoCM, use of the GoCM becomes mandatory as soon as the required good or service is available through it.

If no such standing offer, supply arrangement or GoCM access exists, departments will acquire the goods or services using their existing procedures.

If such a standing offer or supply arrangement does exist or the GoCM is available, but a department does not wish to use it, it must submit a requisition to PWGSC or follow a new Exception Process described below.

(b) PWGSC

1. On receipt of a requisition for a good or service within one of the mandatory commodity groups, the contracting officer will determine if a standing offer or supply arrangement exists that meets the requirement.
2. If the requirement cannot be met using one of those standing offers or supply arrangements, or if no standing offer or supply arrangement exists, the contracting officer will proceed with another appropriate method of supply.
3. If a standing offer or supply arrangement that meets the requirement does exist, the contracting officer will inform the requisition originator that the item is available on a PWGSC standing offer or supply arrangement, and that it will be used on their behalf. It should be pointed out to the client that in future, if they use this or another mandatory standing offer or supply arrangement themselves (DISOs are excepted), they can receive the goods or services faster and at less administrative cost than by sending a requisition to PWGSC.
4. Should the client indicate to PWGSC that they have a valid reason to not use a mandatory standing offer or supply arrangement, the exception process must be initiated.

Note: 'not wanting to' is not an acceptable reason for not using a mandatory standing offer or supply arrangement: this would defeat the long-term benefits and savings of the PWGSC government-wide approach.

Exceptions

'Mandatory Standing Offers' must be used - by departments acting on their own behalf, or by PWGSC handling a requisition - unless one of the following applies.

1. A lower price is available and confirmed (by the PWGSC contracting officer) for an equivalent product or service, by means other than the mandatory standing offer or supply arrangement, and the standing offer or supply arrangement in question has not been established as the 'exclusive Supplier for the GoC'.
2. The good or service available through the mandatory standing offer or supply arrangement does not meet justifiable operational requirements including specifications or delivery dates.
3. The value of the requirement exceeds the call-up limitation of the standing offer or the scope of the supply arrangement.
4. An existing contract is in place, which guarantees the work to another supplier.
5. The requisitioning department or agency has its own standing offer or supply arrangement in place which better meets needs/price.

Note, however, that departments are not to put their own standing offers or supply arrangements in place, so as to avoid having to use PWGSC standing offers or supply arrangements: this would defeat the long-term benefits and savings of the PWGSC government-wide approach.

Exception Process

1. The PWGSC contracting officer makes the decision as to whether an exception to the use of a mandatory standing offer or supply arrangement will be used.
2. If a department is handling its own procurement, and requires an exception to a mandatory standing offer or supply arrangement, it must contact the contracting officer responsible for the appropriate standing offer or supply arrangement (the one that the department does not want to use), and seek an exception.
3. If PWGSC is handling a requisition, and informs the client that a mandatory standing offer or supply arrangement exists, and the client then requests an exception, the contracting officer must consider the request in light of the exception set out above. If an exception applies, the PWGSC contracting officer will proceed with an alternate procurement approach. If no exception applies, the PWGSC contracting officer will inform the client of the necessary use of the standing offer or supply arrangement.
4. Should the contracting officer's decision be disputed by the client, the client may require that the contracting officer seek a decision from the Standing Offer Arbitrator (to be announced for each commodity group), for an immediate resolution.

   The Arbitrator program is being developed: when it is announced, it is expected that either the contracting officer or the client will be able to request an Arbitrator decision. Until that time, contracting officers with a case requiring such a decision must contact Doug Haferkamp, Acquisition Policy and Process Directorate, by phone at 819-956-0929 or by e-mail at doug.haferkamp@pwgsc-tpsgc.gc.ca, for advice.

5. The contracting officer is to record all procurements where a mandatory standing offer was not used, and the associated reason(s).

   Shortly, a process for reporting all such exceptions within PWGSC will be announced. In the meantime, contracting officers must keep this information easily available for reporting and analytical purposes.