Standing offer method of supply

A standing offer is a method of supply used in Canadian federal procurement, also called a standing offer arrangement (SOA). It is a continuous offer from a supplier to provide defined goods or services, as requested, at prearranged prices and under set terms and conditions for a specified period.

A standing offer is not a contract by itself. Departments use it when they expect recurring requirements for commercially available goods or services but cannot determine in advance exactly when, where or how much they will need. A contract is formed only when the government issues a call-up and the supplier accepts it. The CanadaBuys page on standing offers and supply arrangements sets out this basic structure.

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

The standing offer fixes the commercial terms in advance, including prices, conditions and the period of the offer. It does not commit the department to buy anything. When a department has a requirement, it issues a call-up against the standing offer. The supplier's acceptance of that call-up creates the contract for that specific order.

Federal departments and agencies use call-ups to obtain the goods or services available under a standing offer. The Office of the Procurement Ombud describes this approach in its review of standing offers. Once a supplier is selected, it must honour the terms of the standing offer whenever a valid call-up is issued.

How standing offers are established through an RFSO

Public Services and Procurement Canada (PSPC) establishes standing offers for federal departments and other authorized users. The usual vehicle is a Request for Standing Offer (RFSO), published on CanadaBuys. A standing offer is set up through a competitive RFSO or another procurement process that is subject to normal contracting policies and procedures, as noted in the Procurement Ombud's 2023 report.

Suppliers compete by submitting offers that meet the stated requirements. These can include prices, discounts, technical conditions and other mandatory terms. For hand tools, for example, PSPC has suppliers compete through discounts off manufacturer list prices, as described in its hand tools fact sheet.

Standing offers compared with supply arrangements

A supply arrangement is a related method of supply, but it works differently. It creates a pool of pre-qualified suppliers, and individual requirements are normally competed among them. A standing offer is not based on competing each requirement. It rests on accepting a supplier's pre-established offer.

Where several standing offers exist for the same requirement, the department must apply the selection method and any distribution rules written into the standing offers. When proportional allocation is used, identified users must follow the predetermined work-distribution rules. The CanadaBuys buyer's guide covers these obligations.

Goods and services bought through standing offers

Standing offers suit commodities that departments buy regularly. Examples include chemicals, hand tools, groceries and translation services. PSPC's Canadian Collaborative Procurement Initiative uses standing offers for chemical supplies, and the related RFSO is published on CanadaBuys. The chemical products fact sheet describes that arrangement.

What it means for a supplier bidding on Canadian public contracts

Winning a place on a standing offer does not guarantee orders. Revenue comes only from call-ups, so your pricing and terms must hold for the full period of the offer. Watch CanadaBuys for RFSOs in your product or service category and read the selection and distribution rules closely, since they decide how call-ups are shared among suppliers. Check whether a notice is for a standing offer or a supply arrangement before you prepare a response, because the competition model differs.