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Public Services and Procurement Canada

3.45. Supply arrangement method of supply

  1. A supply arrangement (SA) is a non-binding arrangement between Canada and a pre-qualified supplier that allows departments and agencies to award contracts and solicit bids from a pool of pre-qualified suppliers for specific requirements within the scope of the SA.
  2. An SA is not a contract for the provision of the goods and services described in it and neither party is legally bound, as a result of signing a supply arrangement alone. The intent of a supply arrangement is to establish a framework to permit expeditious processing of individual bid solicitations, which result in legally binding contracts for the goods and services described in those bid solicitations.
  3. An SA may be used when:
    1. the overall requirement cannot be clearly defined at the outset and it is proposed to establish a pool of screened suppliers from which clients and PWGSC solicit bids for individual requirements;
    2. a commodity is procured on a regular basis (goods or services);
    3. a standing offer is not suitable, due to variables in resulting call-ups (e.g. varying methods/basis of payment, or the statement of work or commodity cannot be adequately defined in advance);
    4. a simplified solicitation, undertaken by users/clients, can be used to obtain competitive bids from the pre-qualified suppliers;
    5. selection will be based on best value, as described in the SA and the subsequent solicitation; and
    6. it is more efficient for PWGSC to operate as the provider of the framework on behalf of other users/clients and not as the contracting authority.
  4. Supply arrangements are generally issued following a Request for Supply Arrangement process. For more information on the solicitation process, see Chapter 4 - Solicitation Process. When developing the procurement strategy, contacting officers should consider the following:
    1. if national and international trade agreements apply to the solicitation (see 3.50 Procurements Subject to Trade Agreements);
    2. whether or not ceiling prices will be included in the SAs;
    3. how security requirements will be managed (i.e. what are the base security requirements and how are different security requirements managed.). The contracting officer must ensure that a contract resulting from an SA contains the proper security requirements and that the client is aware of its responsibility in the confirmation of the actual security status of the organization/personnel prior to issuing the contract;
      IMPORTANT: When security clearances such as IT, Production and/or COMSEC are required, seek assurance of these specific security types from the Canadian Industrial Security Directorate (CISD) as they are contract specific and not blanket clearances held by the organizations.
    4. how the use of the SA will be monitored and reported.
  5. Each SA should contain clear instructions on how to use the SA and identify which departments and agencies can use them.
  6. A requirement that would normally be covered by the trade agreement is still covered when solicited or contracted through the use of a supply arrangement method of supply.
    1. The use of this method of supply is considered selective tendering under the international trade agreements. A Notice of Proposed Procurement (NPP) must be posted for each separate procurement under a supply arrangement (SA) that is equal to or over the relevant trade agreement threshold(s) and rules with respect to minimum solicitation periods must be followed. For more information, see International trade agreements and use of supply arrangements and 4.75.5 Determining the solicitation period.
    2. The use of this method of supply is considered to be a standing arrangement under the Canadian Free Trade Agreement (CFTA). For standing arrangements under the CFTA, the procuring entity must indicate how subsequent purchases will be made from a supplier when issuing the call for the standing arrangement.