What is the difference between a standing offer and a supply arrangement?

What is a standing offer?

A standing offer is not a contract. It is an offer from a potential supplier to provide goods or services at pre-arranged prices, under set terms and conditions, when and if required. It becomes a contract only when the government issues a call-up against it.

Public Services and Procurement Canada (PSPC) uses standing offers for recurring needs, when departments or agencies repeatedly order the same goods or services, and for goods or services that can be defined clearly enough for suppliers to offer firm pricing. Each call-up is a separate contract, capped at the maximum value set in the standing offer, and there is no contractual obligation on either side until a call-up is made.

PSPC issues five types of standing offer, depending on the geographic area and how many departments use it:

• National Master Standing Offer (NMSO): used by many departments or agencies throughout Canada.
• Regional Master Standing Offer (RMSO): used by many departments or agencies within a specific geographic area.
• National Individual Standing Offer (NISO): used by a specific department or agency throughout Canada.
• Regional Individual Standing Offer (RISO): used by a specific department or agency within a specific geographic area.
• Departmental Individual Standing Offer (DISO): used only by PSPC on behalf of specific departments and agencies.

A standing offer can be issued to more than one supplier for the same goods or services. When that happens, the request for standing offers must set out the call-up procedures, including how work is allocated among the standing offers.

What is a supply arrangement?

A supply arrangement is also not a contract, and neither party is legally bound by signing one. It sets predetermined conditions that will apply to later bid solicitations and contracts, and lets client departments solicit bids from a pool of pre-qualified suppliers for specific requirements.

PSPC uses supply arrangements when goods or services are bought regularly but a standing offer does not fit, because the individual requirements vary and cannot be fully defined in advance. Many supply arrangements include ceiling prices, which departments can negotiate down based on the actual work. A legally binding contract exists only once a department awards one under the arrangement.

How do call-ups differ from competitions under a supply arrangement?

This is the practical difference:

• Standing offer: the goods or services and the prices are already set. A department issues a call-up, and the call-up itself is the contract, within the limits written into the standing offer.
• Supply arrangement: only the framework is set. For each requirement, PSPC or the client department prepares a solicitation and either runs a competition among qualified suppliers or negotiates, then awards a contract for that specific work.

How the competition under a supply arrangement runs depends on value. For requirements not subject to the trade agreements, bids are solicited only from qualified suppliers that hold the supply arrangement. For requirements subject to the trade agreements, a Notice of Proposed Procurement is published on CanadaBuys, and the federal Buyer's Guide notes that these mini-tenders follow the trade agreements' advertising rules. CanadaBuys has a notice type filter called "RFP against Supply Arrangement" for this kind of solicitation.

Why does getting qualified matter?

Because the work flows to suppliers already in the pool. Under a supply arrangement, only suppliers that are pre-qualified at the time an individual bid solicitation is issued are eligible to bid. Under a standing offer, departments order from the suppliers who hold it.

Timing is where most suppliers get caught. PSPC says there is no set rule for when standing offers and supply arrangements are issued. Standing offers are generally issued at the start of the federal fiscal year, which runs April 1 to March 31, with many exceptions, and requests for standing offers (RFSOs) and requests for supply arrangements (RFSAs) may be published several months before the vehicle takes effect.

Some supply arrangements stay open to new suppliers. The federal Buyer's Guide says RFSAs subject to international trade agreements must be published at least annually and remain continuously available, and that suppliers may qualify at any time. PSPC's ProServices supply arrangement, for example, uses quarterly refreshes as an ongoing opportunity to qualify.

How do I find RFSOs and RFSAs on CanadaBuys?

1. Go to the Tender opportunities page on CanadaBuys.
2. Open Filters and, under notice type, select Request for Standing Offer, Request for Supply Arrangement or RFP against Supply Arrangement. A separate filter lets you choose by contract instrument type, such as Standing Offer or Supply Arrangement.
3. Add your keywords or commodity codes, and set the status filter to Open to see current opportunities.
4. Use "Follow this search" to get email, RSS or Atom updates when new matching notices or amendments are published.
5. Read the RFSO or RFSA itself for the evaluation criteria, the call-up procedures or how later competitions will run, any security requirements, and how long the arrangement lasts.
6. To see who already holds federal standing offers and supply arrangements, use the weekly updated Standing Offers and Supply Arrangements dataset on the Open Government Portal, which CanadaBuys links to.

You respond to an RFSO the same way you bid on any other solicitation, following the submission method in the notice. If your offer is unsuccessful, you can ask for a debriefing, which applies to standing offers and supply arrangements as well as contracts.

Where do suppliers miss standing offer and supply arrangement opportunities?

What I see most often:

• Watching only for requests for proposal. If your search or alerts cover RFPs alone, you will not see the RFSOs and RFSAs that decide who can receive the later work.
• Missing the window. RFSOs and RFSAs can appear months before the vehicle takes effect, and the Buyer's Guide says that once a solicitation under a supply arrangement closes, the buyer should not delay award to let a supplier go through qualification.
• Not checking refresh schedules. Some arrangements, like ProServices, reopen on a published schedule. Read each RFSA to see whether and when it reopens.
• Treating a standing offer as guaranteed revenue. There is no obligation until a call-up, and where several suppliers hold standing offers, the allocation method in the standing offer decides who gets each order.
• Leaving registration and security for later. CanadaBuys says a CRA business number is required before a standing offer or supply arrangement is issued, and organization security screening needs a sponsor.