4.10. Solicitation Methods
Various methods of solicitation may be used depending upon the circumstances of the particular procurement.
4.10.1 Request for Quotation
- A Request for Quotation (RFQ) may be used to solicit bids for low dollar value commercial goods and/or services valued below $25,000 for goods and $40,000 for construction and services, including all applicable taxes, from one or more suppliers.
- Prior to soliciting a bid using an RFQ, contracting officers are to verify the Ineligibility and Suspension List and ascertain that the bidder is not ineligible.
- Because of its abbreviated nature, a RFQ may not contain all of the terms and conditions that are typically used to form a contract, but must include the Integrity Provisions – Bid found in Standard Instructions 2003 or 2004.
- The contract requirement must be well defined such that bids may be evaluated and compared on the basis of price and delivery and where contract award may be determined on the basis of lowest-priced bid that meets the requirements.
- RFQs are not publicly posted. Contracting officers may have suppliers submit their RFQs directly to them if a specific date and time is set for the receipt of the quotation.
- See section 5.16 Integrity Compliance for details on the process to be followed before contract award or before issuing a purchase order.
4.10.5 Telephone Buy
- A telephone buy (T-buy) is a form of Request for Quotation (RFQ), where bids are solicited from one or more selected suppliers verbally, in-person or over the telephone, for requirements below $25,000 for goods and $40,000 for construction and services, including all applicable taxes.
- Prior to soliciting a telephone bid, the contracting officer must verify the Ineligibility and Suspension List and ascertain that the bidder is not ineligible.
- When soliciting bids through telephone buy, the contracting officer must ensure that the bidder is informed that they will be subject to the Ineligibility and Suspension Policy, and that they must be compliant to the Policy to be awarded a contract. The contracting officer must request that the bidder familiarizes themselves with the Policy.
- A verbal contract may be entered into by telephone (and order may be placed) if the contracting officer has the appropriate authority.
- Written confirmation from the bidder is not required for bids received by telephone, however the contracting officer must record the details of the telephone bid on the procurement file and the order must be confirmed in writing by issuing the applicable contract document and providing a copy to the contractor.
- See Chapter 7 Award of Contracts and Issuance of Standing Offers and Supply Arrangements and section 5.16 Integrity Compliance for details on the process to be followed before contract award or before issuing a purchase order.
4.10.10 Invitation to Tender
- An Invitation to Tender (ITT) is used where selection is based on the lowest price. It should be used when all of the following criteria apply:
- two or more sources are considered capable of carrying out the requirement;
- the requirement is adequately defined to permit the evaluation of bids against clearly stated criteria;
- the market conditions are such that bids can be submitted on a common pricing basis;
- it is intended to accept the lowest-priced responsive bid without negotiations; and
- the evaluation of bids will exclude any Product, Resource, Operating and Contingency (PROC) costs or socio-economic considerations, other than the employment equity provisions.
- An ITT can be used to solicit bids:
- through public advertisement on the Government Electronic Tendering Service (GETS);
- through direct invitation of selected suppliers by means of a source list, where permitted; or
- by invitation of one source only if conditions for a non-competitive process have been met.
- Prior to issuing an ITT, contracting officers are to verify the Ineligibility and Suspension List and ensure that the invited suppliers are not ineligible, if they have not been selected from a prequalified list.
- An ITT must include the Integrity Provisions – Bid found in Standard Instructions 2003 or 2004.
- An ITT can be opened publicly. Public opening should be considered for all ITTs estimated to exceed $25,000. ITTs for requirements less than $25,000 may be opened publicly if circumstances warrant. Public openings should be considered for any bid where the contract award will have a high degree of public visibility.
- See section 5.16 Integrity Compliance for details on the process to be followed before contract award.
4.10.15 Bid solicitation
- A bid solicitation may be used for low dollar value (Simple), medium complexity (MC) and higher complexity (HC) requirements. It can be used when the bidder selection is based on price or best value. The Standard Instructions 2003 and 2004 of the Standard Acquisition Clauses and Conditions (SACC) Manual must be used in bid solicitations for goods and/or services. Contracting officers establishing bid solicitations for low dollar value, medium and higher complexity requirements must use the standard procurement templates following the Standard Procurement Template Procedures, which provides instructions on how to use the templates.
- A Request for Proposal (RFP) is a form of bid solicitation that is used when the bidder selection is based on best value rather than on price alone. A RFP should be used when, owing to the nature of the requirement, suppliers are invited to propose a solution to a problem, requirement or objective, and the selection of the contractor is based on the effectiveness of the proposed solution.
- Bids must be evaluated and the successful supplier must be selected in accordance with specific criteria and procedures as set out in the bid solicitation.
- A bid solicitation can be used to solicit bids through public advertisement on GETS, through direct invitation of selected suppliers by means of a source list where permitted, or by invitation of one source only if conditions for a non-competitive process have been met.
- Responses to the bid solicitation may result in negotiations before contract award when the bid solicitation states the right to negotiate in accordance with the international trade agreements and/or the Canadian Free Trade Agreement (CFTA).
- The preparation of bids is often costly to suppliers. To keep the total cost down while ensuring freedom of access to suppliers, consideration should be given to soliciting bids in two steps.
- during the first step of this process, suppliers are requested to provide letters of interest and qualifications, from which a short list is developed. During the second step, suppliers on the short list are requested to submit detailed bids;
- suppliers not included on the short list are still able to request the bid solicitation and submit bids.
- Such a process might be appropriate where many suppliers are known. When doing a two-stage procurement, contracting officers must follow procedures required under the applicable international trade agreements and the Canadian Free Trade Agreement (CFTA) related to selective tendering and prequalification of suppliers, respectively.
- The bid solicitation should include, as a minimum, the following information:
- a clear definition of the requirement;
- bidder instructions;
- bid preparation instructions;
- clear evaluation procedures;
- certification requirements;
- security and financial requirements;
- validity of the bid;
- resulting contract clauses; and
- instructions informing bidders that they may request information about the results of the RFP and how their bid was evaluated. (See 7.40 Debriefings to Unsuccessful Bidders/Offerors/Suppliers for information to be included in debriefings.)
4.10.20 Request for Standing Offers
- A Request for Standing Offers (RFSO) is used to solicit offers for standing offer methods of supply. For more information on the application of standing offers, see 3.40 Standing offer method of supply.
- A RFSO can be used to solicit offers through public advertisement on GETS, through direct invitation of selected suppliers by means of a source list where permitted, or by invitation of one source only if conditions for a non-competitive process have been met.
- The RFSO must give instructions on the use, purpose and limitations of the proposed standing offer. The Standard Acquisition Clauses and Conditions Manual (SACC) Standard Instructions 2006 (competitive) and 2007 (non-competitive) and General Conditions 2005 are designed specifically for standing offers and must be incorporated by reference in each RFSO. Contracting officers establishing an RFSO must use the RFSO template following the Standard Procurement Template Procedures, which provides instructions on how to use the templates.
- A RFSO must include the following information, as a minimum:
- a clear definition of the requirement and the period for making call-ups;
- information on the number of standing offers intended to be authorized for use;
- offer preparation instructions;
- clear evaluation criteria;
- clear evaluation procedures and basis of selection;
- instructions informing offerors that they may request information about the results of the RFSO and how their offer was evaluated. (See 7.40 Debriefings to Unsuccessful Bidders/Offerors/Suppliers for information to be included in debriefings.)
- clear ranking methodology where applicable;
- clear call-up procedure(s) including the method of allocating the work among multiple standing offers;
- a notice to offerors regarding disclosure of their unit prices (see SACC Manual General Conditions 2005);
- conditions applicable to the RFSO;
- conditions applicable to the standing offer;
- resulting contract clauses applicable to ensuing call-ups; and
- the estimated utilization, whenever practical.
184.108.40.206 Standing Offer Procedures
- Call-up Limits: A call-up issued against a standing offer constitutes an individual contract and Treasury Board (TB) contracting limits apply. Contracting officers will set the maximum call-up limit for identified users in the standing offer document using Appendix A – Contracting Approvals of the Directive on the Management of Procurement as a guide. However, PWGSC has the authority to further limit the value of individual call-ups.
- Financial Limitation: The inclusion of a limitation of expenditure in standing offers is optional. The standing offer authority will determine, if applicable, the need for inclusion of a limit on the basis of the type of standing offer (Master or Individual), the degree of control over total expenditures and the needs of the client department(s). SACC Manual clause M4506C may apply.
- Identified Users: The identified users authorized to make call-ups against standing offers could include any government department, agency or Crown corporation listed in Schedule I, Schedule I.1, Schedule II, Schedule III of the Financial Administration Act. See SACC Manual RFSO template, Part 7A, article 7.7.
- Standing Offers Reporting: The standing offer authority may indicate in the standing offer the reporting requirement for the offeror, and/or the client department, as applicable. In such case, the standing offer must indicate the time frame within which each report must be submitted following the reporting period. See SACC Manual clause M7010C. See also 8.75.1 Reporting for Standing Offers and Supply Arrangements for more details on reporting.
220.127.116.11 Ranking and Methodology for Standing Offers
- One Standing Offer:
Where only one standing offer will be authorized for use as the result of a competitive RFSO, the resulting call-ups are considered competitive and the competitive call-up authorities can be used.
- Multiple Standing Offers:
If more than one standing offer will be authorized for use based on a reasonable expectation of business activity such that a single offeror would lack the capacity to meet the demands, clear ranking methodologies and call-up procedures must be described in the RFSO, so that suppliers are aware of these when preparing their offer. The two models of ranking methodology are described below:
- right of first refusal basis:
The call-up procedures require that when a requirement is identified, the identified user will contact the highest-ranked offeror to determine if the requirement can be satisfied by that offeror. If the highest-ranked offeror is able to meet the requirement, a call-up is made against its standing offer. If that offeror is unable to meet the requirement, the identified user will contact the next ranked offeror. The identified user will continue and proceed as above until one offeror indicates that it can meet the requirement of the call-up. In other words, call-ups are made based on the "right of first refusal" basis. When the highest-ranked offeror is unable to fulfill the need, the identified user is required to document its file appropriately. The resulting call-ups are considered competitive and the competitive call-up authorities can be used.
- proportional basis:
The call-up procedures require that call-ups be issued on a proportional basis such that the highest-ranked offeror receives the largest predetermined portion of the work; the second highest-ranked offeror receives the second largest predetermined portion of the work, etc. (for example, 50 percent to the highest-ranked offer, 30 percent to the next highest-ranked offer and 20 percent to the third highest-ranked offer). This predetermined distribution of the resulting work is to be described in the RFSO so that potential offerors are aware of these when preparing their offer. It is also known as "collective best value". The highest-ranked standing offer represents the best value for Canada, and its offeror receives the largest portion of the work. A clear advantage in terms of distribution of expected business volume should be given to the highest-ranked offeror (for example, 20 percent or more than the next offer) and the same for the others. The determination of what constitutes a clear advantage is the responsibility of the contracting officer and may vary by commodity, service or by business case. The resultant call-ups are considered competitive and the competitive call-up authorities can be used.
Where individual standing offers are to be authorized based on the proportional basis approach, the contracting officer should inform the authorized user of his/her obligation to monitor call-up activities to ensure work is allocated in accordance with predetermined work distribution.
- In both cases above, contracting officers should clearly state in the RFSO the expected number of standing offers that are intended to be authorized for use. If the intention is that multiple standing offers will be authorized for use, the RFSO should state the basis upon which call-ups will be issued, whether right of first refusal, proportional or another method. If call-ups must be issued against standing offers under the proportional basis approach, the breakdown must be stated (for example, 50 percent, 30 percent and 20 percent) in the RFSO.
- In addition to the above, when the intention is that multiple standing offers will be authorized for use, contracting officers could include a condition that only those standing offers, which are within, for example, 10 percent of the best-priced offer, will be considered. The method of such calculations should be explicitly described in the RFSO.
- right of first refusal basis:
- Non-competitive call-ups:
In other instances, more than one SO will be authorized for use but no ranking is established. This would occur, for example, when prices are sought for a full range of items contained in a catalogue where items and ranking of offers is impossible. The authorized call-up authority may choose whichever SO to use. For some requirements, the contracting officers may set parameters to guide the authorized users in the selection of one of the standing offers. Call-ups made against these standing offers are non-competitive and only the non-competitive call-up authorities can be used.
18.104.22.168 Standing Offer Forms
The following forms are used for call-ups against a standing offer and are available through PWGSC Forms Catalogue Web site:
|Forms Number||Forms Title|
|PWGSC- TPSGC 942||Call-up Against a Standing Offer|
|PWGSC- TPSGC 944||Call-up Against Multiple Standing Offers|
|PWGSC- TPSGC 8251||Call-up Against a Standing Offer for Temporary Help|
|PWGSC- TPSGC 7169-1||Call-up Against a Standing Offer for Security Guard Services|
|PWGSC- TPSGC 191||Acquisition Card Application (MasterCard)1 may also be used at the time of the call-up against standing offers, as an alternative to other payment methods identified in the standing offer2.|
1Because use of a credit card results in immediate payment to the contractor, the normal payment period and interest on overdue accounts provisions do not apply. (See SACC Manual template RFSO, Part 6B, article 2.)
2Contracting officers should verify if the client(s) need such a service and include appropriate details in the standing offers. In such cases a call-up form may, or may not, be warranted.
4.10.25 Request for Supply Arrangements
- A Request for Supply Arrangements (RFSA) is used to solicit arrangements from suppliers for the establishment of supply arrangements (SA). For more information, see 3.45 Supply arrangement method of supply.
- Contracting officers establishing an RFSA must use the Standard Acquisition Clauses and Conditions Manual Standard Instructions 2008, General Conditions 2020 and the RFSA template following the Standard Procurement Template Procedures, which provides instructions on how to use the templates.
- The RFSA should include, as a minimum, the following information:
- a clear definition of the requirement;
- supplier instructions;
- arrangement preparation instructions;
- clear evaluation procedures and basis of selection for the establishment of the list of qualified suppliers;
- certification requirements;
- conditions applicable to the SA, including the terms of the solicitation;
- resulting contract clauses applicable to any contract resulting from each solicitation; and
- instructions informing suppliers that they may request information about the results of the RFSA and how their offer was evaluated. (See 7.40 Debriefings to Unsuccessful Bidders/Offerors/Suppliers for information to be included in debriefings.)
- The list of qualified suppliers as a result of a RFSA is considered to be a source list under international trade agreements.
22.214.171.124 Supply Arrangement procedures
- Before establishing a supply arrangement (SA), the contracting officer will prepare and issue an RFSA, which will allow for a suitable pool of suppliers who meet the stated evaluation criteria. Industrial security requirements (that is, personnel, physical and information technology security) should be identified at this time, when any or all of these security aspects will be applicable to all client departments of the SA.
- The following forms must be used by client departments for the first page of the bid solicitation issued under a SA and for the first page of the resulting contract:
PWGSC-TPSGC 9400-3, Bid Solicitation
PWGSC-TPSGC 9400-4, Contract
- Contracting officers will set the contracting limits in the SA document for the identified users as defined in the supply arrangement, as the case may be. For supply arrangements for goods, services or construction, contracting officers may set the maximum contract limit using the Appendix A: Contracting Approvals of the Directive on the Management of Procurement, as a guide. The Directive sets the dollar limit for contract entry for goods, services and construction, above which departments must seek the approval of TB to enter into the contract.
- A legal contract does not exist between Canada and the supplier until a contract is awarded through the completion of form PWGSC-TPSGC 9400-4.
- Supply Arrangement Reporting: The supply arrangement authority may indicate in the supply arrangement the reporting requirements for the supplier, or the client, as applicable. The SA should indicate the time frame within which each report must be submitted following the reporting period. See SACC Manual clause S0010C. See also 8.75.1 Reporting for Standing Offers and Supply Arrangements for more details on reporting.
- Financial Viability: Supply arrangement authorities should note that since the statement of work or requirement cannot be adequately defined in advance, only a preliminary review of the supplier's financial viability will be conducted for the sole purpose of pre-qualifying suppliers for SAs. See SACC Manual clause S0030T. See also 5.60.1 Financial Capability for more details on financial capability.
- Identified Users: The identified users authorized to use supply arrangements could include any government department, agency or Crown corporation listed in Schedule I, Schedule II, Schedule III of the Financial Administration Act. See SACC Manual template RFSA, Part 6A, article 6.
126.96.36.199 International trade agreements and use of supply arrangements
- Requests for Supply Arrangements (RFSAs) subject to international trade agreements must be published at least once a year on Government Electronic Tendering Service (GETS) and made available continuously on GETS. Notices for RFSAs subject to international trade agreements must include the following components:
- a description of the goods or services, or categories of goods and services, for which the RFSA may be used;
- the conditions for participation/criteria to be satisfied by suppliers for inclusion on the list;
- the methods the procuring entity will use to verify that a supplier satisfies the conditions;
- the name and address of the procuring entity, and any other information necessary to contact the entity and obtain all relevant documents relating to the list;
- the period of validity of the list and the means for its renewal or termination, or where the period of validity is not provided, an indication of the method by which notice will be given of the termination of use of the list;
- an indication of which trade agreements apply to the RFSA.
If one or more international trade agreements apply, the RFSA must be posted for at least 25 calendar days before any bid solicitation(s) under the resulting Supply Arrangement can close. If a state of urgency that is duly substantiated by the procuring entity renders this time impracticable, this time period may be reduced to no less than 10 days.
Suppliers must be allowed to apply for qualification at any time, and all qualified suppliers must be included on the SA within a reasonably short time.
For information on determining whether or not international trade agreements apply to a RFSA, see 3.50.5 Applicability of trade agreements to standing offers and supply arrangements.
- For bid solicitations and proposed contracts under a supply arrangement (SA), the following applies:
- Where the estimated value of a proposed contract under the SA is below the applicable trade agreement thresholds, those agreements do not apply.
- Where the estimated value of a proposed contract under the SA is equal to or above the applicable trade agreement thresholds, those agreements apply to the bid solicitation.
- Where one or more of the international trade agreements apply to a bid solicitation under a SA, a Notice of Proposed Procurement (NPP) must be published on GETS. If a supplier that is not included on the SA requests to participate in the bid solicitation under the SA, they must be able to apply for qualification. If qualified, the supplier must be included on the SA within a reasonable period of time and be allowed to participate in the bid solicitation in question. However, after bid closing, the contracting officer does not have to delay the contract award process in order to allow a supplier to go through the qualification process.
For information on determining the solicitation period of bid solicitations under SAs, see 4.75.5 Determining the solicitation period.
188.8.131.52 Ongoing qualification process
In order to simplify and streamline guidance with respect to trade agreements, the information previously found in this Section has been incorporated into 184.108.40.206 International trade agreements and use of supply arrangements.
For reference purposes only, Section 220.127.116.11 is available in the Supply Manual archive, Version 2020-1.
18.104.22.168 Canadian Free Trade Agreement and use of supply arrangements
Where the estimated value of a proposed contract under the supply arrangement is above the CFTA threshold, CFTA applies to the bid solicitation. Otherwise, CFTA does not apply to that proposed contract.
Where CFTA applies to a bid solicitation under a supply arrangement, the CFTA allows the use of source lists without publication of a NPP, provided that all suppliers on the source list be invited to bid and that they be able to apply for qualification at any time. It is PWGSC policy that suppliers must be given at least 15 calendar days to bid.
22.214.171.124 Ongoing qualification process
Pursuant to CFTA, the existence of a list of qualified suppliers must be published at least once a year by an invitation to qualify on GETS or predetermined newspapers. The invitation to qualify must contain the conditions to be fulfilled by suppliers to qualify. Suppliers must be allowed to apply for qualification at any time.
4.10.30 Professional services sourcing tools
Professional services sourcing tools that may help client departments with their requirements are provided below.
- Temporary Help Services
- THS are traditionally used:
- when a public servant is absent for a temporary period of time;
- when there is a requirement for additional staff during a temporary workload increase and there is an insufficient number of public servants available to meet the requirement; or
- a position is vacant and staffing action is being completed.
- THS is a tool to assist federal departments in the National Capital Region in their procurement of THS with a value (including all subsequent amendments and Goods and Services Taxes) below the applicable thresholds indicated in the THS Supply Arrangement business rules section. Some of the sources are:
- Public Works and Government Services Canada (PWGSC) issues Regional Master Standing Offers (RMSOs) to provide for qualified personnel for temporary assignments.
- RMSOs for temporary help services are requested and authorized by the regional offices of PWGSC. Contracting officers must keep client departments informed of contracting processes, procedures and definitions of categories of service with respect to THS.
- There is a temporary help contracting officers' network, which has been working with functional guidance from the Professional Services Procurement Directorate, Services and Technology Acquisition Management Sector.
- For additional information, consult the contact person identified on the Temporary Help Services (On-Line System) Web site.
- THS are traditionally used:
- ProServices is a professional services mandatory method of supply for requirements below the Canada-Korea Free Trade Agreement threshold and is available through the Centralized Professional Services ePortal.
- SELECT is a database of approved firms, providing construction, architectural and engineering services, as well as related maintenance and consulting services. It is used by PWGSC to invite suppliers to bid on real property consulting services and construction services below $100,000.
- In-Service Support Supply Arrangement (ISS SA) is currently limited to a supply arrangement for the professional services related to Human Resources Management, Organizational Management and Project Management.