Standing Offer

A standing offer is an offer from a potential supplier to provide goods, services, or both at pre-arranged prices and under set terms and conditions, when and if required. It is not a contract on its own. Canada has no obligation to buy anything until an authorized government buyer issues a call-up against the offer. The CanadaBuys page on standing offers and supply arrangements sets out this definition.

In federal procurement, a standing offer is a method of supply for recurring or anticipated requirements. It suits situations where the government can define the goods or services and the pricing in advance but cannot accurately predict how much it will order or when. Suppliers that qualify agree to hold their prices and terms for the stated period.

How a call-up turns a standing offer into a contract

The call-up is the step that creates a binding agreement. When an authorized user issues a call-up, it acts as an acceptance of the standing offer and becomes legally binding. A separate contract is entered into for each call-up. The call-up also normally serves as the supplier's notice to deliver the goods or perform the services.

This means a standing offer holder can go long stretches without an order, or receive many. The pre-arranged prices and terms apply to every call-up issued during the offer period.

When Canada chooses a standing offer as its method of supply

The CanadaBuys buyer's guide on choosing a method of supply and the Treasury Board policy material both identify uncertain quantities over the period covered by the procurement as the situation where a standing offer is appropriate. A standing offer can be established through competitive bidding or negotiation.

Public Services and Procurement Canada (PSPC) describes standing offers as a tool for recurring needs, where departments or agencies repeatedly order the same goods or services. The Department of National Defence procurement overview lists printing, office equipment and specialized services as examples of recurring requirements met this way.

The Request for Standing Offer and pre-qualified holders

The usual solicitation is a Request for Standing Offer (RFSO). Suppliers respond to the RFSO and must satisfy its evaluation requirements. Those that do become pre-qualified suppliers and holders of standing offers, and they agree to supply at the established prices during the specified period. The PSPC overview of how government buys describes this process.

Standing offers may be national or regional, and they may authorize one or more users to issue call-ups within specified limits. Standing offers commonly establish firm, predetermined pricing for the period they cover.

Standing offers compared with supply arrangements

A supply arrangement is another method for establishing a pool of pre-qualified suppliers. The difference lies in what happens next. Under a supply arrangement, individual requirements generally involve a further competitive process. Under a standing offer, the prices and terms are already set, so a call-up can be issued directly. The PSPC guidance on bidding covers both methods.

One example is information retrieval services, which are procured through a standing offer for commercial professional services such as database subscriptions, advice, analysis and applied research, supplied as and when requested. These standing offers may be negotiated on a limited-tendering basis every two years with firm fixed pricing, according to the PSPC information retrieval services listing.

What a standing offer means for your bid team

• Treat the RFSO as the real competition. Meeting its evaluation requirements is what makes you a holder.
• Price carefully. You must honour the stated prices and terms for the whole offer period.
• Do not forecast revenue from the offer alone. Being a holder gives no guaranteed purchases, because orders arrive only through call-ups.
• Check whether the offer is national or regional, and which users may issue call-ups.
• Watch CanadaBuys for new RFSOs and for renewals of existing offers.