Procurement strategy development

Procurement strategy development is the process by which a buyer and a client decide how a requirement will be acquired. It sets the scope of the procurement, the level of competition, the contracting approach, the evaluation and selection method, the schedule, the pricing approach and the main risks, along with legal, operational and policy considerations.

The Government of Canada treats this as one of the most important steps in the procurement process, because it influences the scope of the requirement and determines the level of competition. The guidance is published for federal buyers on CanadaBuys.

What a federal procurement strategy has to achieve

In Canadian federal procurement, development of the strategy begins with discussions between the contracting buyer and the client department. The strategy must satisfy operational requirements, comply with legal requirements, achieve best value and support broader government objectives.

The CanadaBuys guidance directs buyers to consider a range of factors, including:

• the method of supply;
• total estimated cost and lifecycle cost;
• contract period and extension options;
• delivery requirements and milestones;
• evaluation procedures and the supplier-selection method;
• commercial off-the-shelf versus customized solutions;
• procurement risks and how to mitigate them;
• liability and indemnification;
• whether a fairness monitor is required; and
• renewal, replacement and end-of-life planning.

Policy objectives built into the strategy

The strategy is also where buyers address government-wide objectives. The guidance includes participation by small and medium-sized enterprises, Indigenous-business opportunities, accessibility standards, environmental impacts and consolidation opportunities. These considerations are weighed at the planning stage, before any solicitation is issued.

Pricing is part of the same exercise. Buyers are directed to assess pricing considerations, options and potential risks early and throughout the acquisition lifecycle, and to align the pricing strategy with the procurement strategy. Buyers must also give the approval authority an opportunity to approve or reject the proposed strategy as early as possible, as set out in the CanadaBuys buyer's guide.

The NATO equivalent: contracting strategy

In NATO procurement terminology, the closely related concept is the contracting strategy. NATO's Procurement Manual states that, at the conclusion of the procurement-planning phase, procurement staff must devise a contracting strategy that weighs risks and adequately protects NATO's interests.

NATO also links procurement to capability requirements, multinational cooperation, interoperability and economies of scale in its description of its role in capability development. For suppliers in defence markets, this affects how opportunities are organized and competed.

What it means for a supplier bidding on Canadian public contracts

The guidance assigns development of the strategy to the buyer and the client department, not to suppliers. Its effect reaches suppliers through the solicitation, which reflects the decisions made in the strategy.

A bid team should therefore read the solicitation as the visible result of the strategy. Follow the stated method of supply, mandatory and rated requirements, evaluation procedures, pricing instructions, contract period, delivery requirements, certifications and applicable clauses. Decisions on competition level, contract length and options, and evaluation method are fixed before the bid opportunity is posted, so they shape what a compliant and competitive response looks like.