Do we or don’t we will we or won’t we…
compete for Standing offers
The federal government may deal with “standing offers” while Ontario
establishes “vendors of record,” but across the country, governments use
similar procedures to evaluate and arrange terms and conditions for the
purchase of goods and services by their ministries, departments and
agencies before any contracts with suppliers are signed.
Standing offers, as they are more commonly known, are offers from
would-be providers to supply materials and/or services during a set period
– often one to three years. There is no actual contract until the
government issues an order or “call-up” against the standing offer, thus
suppliers with these offers have no guarantee of government purchases.
“What is unknown is who is going to order, when they are going to
order, and how much they are going to order. But everything has been put
in place so that the actual buying process is about as quick and painless
as it could possibly be,” says John Read, director of risk management and
quality assurance at Public Works and Government Services Canada (PWGSC),
and president of the Canadian Public Procurement Council.
Dave Collison, executive director of the British Columbia Purchasing
Commission maintains standing offers rationalize the contracting process.
“It’s a way of pre-qualifying that reduces administrative costs,” he says.
Read says although standing offers save the government time in the long
run, most of the time, when a purchase is actually made, the standing
offer price is not today’s best price. Rather, a company’s price will
reflect the risk taken in offering a price for purchases to be made in the
future. “For a company to give you an open offer that they will do
business with you, they are taking a chance as to what will happen between
the day of the deal, and the deal of the day you actually do it,” he says.
According to Read, in the case of commodities whose prices may
fluctuate widely, “We’ll build in a flexible approach to pricing – people
can change their prices every so many months, even weeks in the volatile
food business. This is in everyone’s best interest.” He adds that
provisions also are place to reflect technical and other innovations in
Office equipment, stationery, food, automobile parts and information
technology are examples of commodities needed on an ongoing basis for
which standing offers are frequently arranged. These items can be easily
defined, thus enabling vendors to make informed offers. “When you get into
the services business, it is slightly more complicated. The less tangible
whatever you buy is, the more interesting the whole process of standing
offer gets,” Read states.
Often, a central entity like PWGSC sets up standing offers for the
whole government on a national or regional basis, while in other cases,
departments or ministries may also establish their own. According to Read,
standing offers can also be used to provide the government with lists of
anywhere from one, to several suppliers. Sometimes the processes are
competitive, while when a large pool of suppliers is needed, any company
that fulfills basic requirements can be included. To aid buyers in the
process of mulling through the choices presented by different companies
with standing offers in the same field, in some cases, online catalogues
of products and services are available via intranet sites.
Putting a standing offer in place includes following regular
contracting policies and procedures, including internal and international
trade regulations. Many requests are posted on MERX, although some
jurisdictions, like British Columbia and Nova Scotia, have their own free
websites. Publications are also used in some instances. In Ontario, even
if a supplier misses out on responding to a standing offer, he or she is
not always relegated to waiting until the current period is over, as
frequently there is flexibility built into the process, often known as a
“refresh provision,” according to Neil Sentance of Procurement Policy and
Information Technology at Ontario’s Management Board Secretariat.
While successfully landing a standing offer is no guarantee work will
follow, some vendors respond to requests whenever they feel they are
qualified, seeing it as an important marketing tool. “We always bid on
standing offers when we feel we are qualified,” says Barry Benevoy,
manager of Cohen’s New Office Furniture, in Ottawa, which has won federal
government standing offers. “Even if we aren’t successful, it’s a way of
getting our name out there,” he says.
Others see the process as a waste of time and resources, given the
paperwork involved. And some perceive it as a closed shop if you don’t
have friends among the right decision-making bureaucrats. “It’s a farce,”
says an Ottawa computer dealer who prefers to remain anonymous, saying he
has never bothered responding to a standing offer request. “It’s almost
impossible for local suppliers both because of the connections you need,
and the bureaucracy involved.”
Xerox’s Des Smith, government programs manager for the office printing
business, maintains that responding to requests for standing offers is
well worth it. He currently manages standing offers both at the federal
and provincial levels. Smith says that to be successful in actually
landing a contract, ongoing communication with buyers is important to make
sure they know about new products and their capabilities. “It’s really
incumbent on the vendors to understand a market and be in constant contact
with buyers,” he states.
Contracts Canada explains standing offers
A Standing Offer is … an offer from a
potential supplier to provide goods and/or services at pre-arranged
prices, under set terms and conditions, when and if required. No
contract exists until the government issues an order or "call-up"
against the Standing Offer and there is no actual obligation, by the
government, to purchase until that time.
Standing Offers are used to meet recurring
needs. Standing Offers are usually considered when:
- one or more departments repeatedly order
the same goods or services, but the actual demand is not known in
- a need is anticipated for a range of
goods or services for a specific purpose, but the actual demand is
not known at the outset and delivery is to be made when a
The process of setting up a Standing Offer
is subject to the normal contracting policies and procedures
(including procedures required under the trade agreements). You bid
on Standing Offers the same way you bid on other opportunities. In
PWGSC, for example, most Requests for Standing Offers with an
estimated value of $25,000 or more are advertised on MERX™ and in
the Government Business Opportunities (GBO) publication. Some
Standing Offers with an estimated value below $25,000 are tendered
using the department's source lists.
Types of Standing Offers
1. National Master Standing Offer (NMSO) -
for the use of many departments or agencies throughout Canada.
2. Regional Master Standing Offer (RMSO) -
for the use of many departments or agencies within a specific
3. National Individual Standing Offer (NISO)
- for the use of a specific department or agency throughout Canada.
4. Regional Individual Standing Offer (RISO)
- for the use of a specific department or agency within a specific
5. Departmental Individual Standing Offer (DISO)
- only PWGSC may issue call-ups against this type of Standing Offer
on behalf of specified departments and agencies.