Estimated expenditure

Estimated expenditure is the anticipated amount to be spent under a proposed procurement, contract or requirement. In Canadian government contracting, it is a planning figure. Buyers use it to decide which procedures apply and, in some solicitations, to evaluate bids. It is not a promise that the Crown will spend that amount.

The term appears in Treasury Board guidance on Advance Contract Award Notices (ACANs), in CanadaBuys tender documents and in departmental procurement plans. The Treasury Board ACAN guidance uses the phrase "the estimated expenditure" when setting monetary thresholds. Some CanadaBuys solicitations state that the estimate is for evaluation purposes only.

Estimated expenditure and ACAN thresholds

The Treasury Board uses estimated expenditure to decide whether the ACAN process applies to a proposed contract. The ACAN guidance sets a general threshold of $25,000. It sets a threshold of $100,000 for specified architectural, engineering and other construction-related services, and for certain international-development assistance services.

The buyer compares its estimate against these thresholds. The estimate therefore has a direct effect on how a requirement is competed or notified.

How estimated expenditure is used in bid evaluation

Some tender documents turn the estimate into part of the evaluated price. One CanadaBuys solicitation calculates the extended price for parts and materials by applying the supplier's markup to the total estimated expenditure. The same document states that the estimated expenditure is for evaluation purposes only.

In this use, the figure puts every bidder on the same footing for price comparison. It does not commit the buyer to purchase parts and materials at that level.

Related terms: estimated value and total estimated value

Canadian procurement documents use several close variants. CanadaBuys defines "estimated total procurement value" in its glossary as the total value of the requirement, including taxes and options.

The Practitioner's Guide for Procurement Pricing refers to the "total estimated value" of a potential sole-source procurement. It identifies potential sole-source procurements with a total estimated value of $1,000,000 or more, including applicable taxes, options and amendments, as subject to pricing review.

Estimates in procurement plans and standing offers

Departments publish estimates ahead of solicitations. Correctional Service Canada's national procurement plan lists planned procurements above $250,000 and presents estimated values that include options. The plans cover goods, services, construction and security-related requirements.

Estimates also appear in multi-year arrangements. A CanadaBuys tender notice states that total expenditures over the contract term are estimated at $900,000, excluding GST/HST. The figure describes expected spending over the term, not a fixed amount.

What estimated expenditure means for a supplier

Read the stated amount as an estimate, not as a guaranteed order quantity or a minimum contract value. Check how the solicitation tells you to use it. If it directs you to apply a markup or calculate an extended price from the estimate, follow those instructions exactly, even where the estimate is stated to be for evaluation only.

• Confirm whether the figure includes taxes, options, amendments or the full contract term.
• Use published procurement plans to see where departments expect to spend.
• Watch for ACAN thresholds when a buyer intends to award a contract to a single supplier.