Business to Government in Canada | Types of contracts an SME can have with Government – Part 1

Business to Government in Canada | Types of contracts an SME can have with Government - Part 1 There are several types of contracts that a small and/or medium (or for that matter, large) enterprise can have with the federal government. Other than one-off types of contracts awarded as a result of a tender call, or a procurement under $5000.00, most of the contracts will either be a type of Standing Offer, or a Supply Arrangement. Standing Offer Standing Offers come in many types – but the principle to bear in mind is that they are NOT contracts. They are offers from potential suppliers “to provide goods and/or services at pre-arranged prices, under set terms and conditions, when and if required”. You don’t get an actual contract until the government issues a call-up against the Offer. Typically, this type of procurement is used for common products, used on a repetitive basis, by more than one department. Standing Offers come in different varieties, and this is a quote from PWGSC:

  • National Master Standing Offer (NMSO) – for the use of many departments or agencies throughout Canada.
  • Regional Master Standing Offer (RMSO) – for the use of many departments or agencies within a specific geographic region.
  • National Individual Standing Offer (NISO) – for the use of a specific department or agency throughout Canada. Regional Individual Standing Offer (RISO) – for the use of a specific department or agency within a specific geographic area.
  • Departmental Individual Standing Offer (DISO) – only PWGSC may issue call-ups against this type of standing offer on behalf of specified departments and agencies

You get to participate in a Standing Offer in the usual way – respond to a bid request. Typically, once suppliers are qualified in meeting the Terms and Conditions, they are listed by price for the offering. Client departments are required to start at the top of the list (lowest price) and solicit a response from each supplier until they reach one who can meet the need. That supplier gets the call-up.

Supply Arrangement

Again, to be clear it is appropriate to quote from PWGSC material. “Supply arrangements save time and money by prequalifying suppliers and establishing the basic terms and conditions that will apply to a specified range of goods or services. They also give departments the flexibility to either negotiate or tender competitively their specific requirements to obtain best value for the scope of work desired. Supply arrangements include a set of predetermined terms and conditions that will apply to any subsequent contracts. Supply arrangements allow departments to solicit bids based on their specific scope of work and in this way they differ from standing offers which only allow departments to accept a portion of a requirement already defined and priced. Many supply arrangements include ceiling prices which allow customer departments to negotiate the price downward based on the actual requirement or scope of work”.

Again, you get a Supply Arrangement by responding to a request for a bid – but there is more work required after you get one than there is with a Standing Offer. More on this in the next installment

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