Federal Contractors Program – Standing Offers and Supply Arrangements – IPG-085

Effective Date: June 2017

1. Subject

Application of the requirements of the Federal Contractors Program (FCP) for contractors bidding on standing offers or supply arrangements issued by Canada.

2. Issue

The purpose of this guideline is to explain when and under what circumstances contractors with standing offers and supply arrangements have obligations to implement employment equity under the FCP.

By signing the “Agreement to Implement Employment Equity” (AIEE), contractors who have won no-value agreements (standing offer or supply arrangement) certify commitment to implement employment equity once a contract is in place.

3. Definitions

  1. A standing offer is an offer from a supplier to Canada that allows Canada to repeatedly purchase goods and/or services, or a combination of goods and services at pre-arranged prices, under set terms and conditions, when required. A standing offer is not a contract and Canada is under no obligation to purchase. A standing offer only becomes a contract once Canada issues a “call-up” against the standing offer.
  2. A supply arrangement establishes basic terms and conditions that apply to a specified range of goods and services at negotiable prices provided by pre-qualified suppliers and supplied to Canada. This arrangement may be used when a standing offer is not suitable due to variables in the resulting “call ups”. A supply arrangement is not a contract and neither party is legally bound as a result of signing a supply arrangement but rather a supply arrangement supports the expeditious processing of individual bid solicitations resulting in a contract.
  3. A contract for goods and services is a legally binding agreement of a specific value between Canada and one or more qualified suppliers which creates an obligation to do or not to do a particular thing to meet unique, well defined requirements for a single or multiple client(s).

4. Policy

All contractors that have 100 or more permanent full-time and/or permanent part-time employees and that are provincially regulated who are bidding on federal government contracts are required to sign and comply with the AIEE.

The requirement to implement this agreement comes into force when a contract that has a value of at least $1M is awarded to a supplier. Thereafter, the application of this agreement becomes an ongoing obligation, and not only for the duration of the life of the contract. Contractors who fail to meet their FCP obligations during the execution of the contract or anytime thereafter may lose the right to receive further contracts of any value.

5. Application of the Policy

A standing offer or a supply arrangement is not a contract. They are examples of procurement instruments and do not place Canada under any actual obligation to purchase until it issues a call-up (standing offer) or enters into a contract (supply arrangement). Obligations under the FCP are based on each contract value and not on a cumulative amount of all contracts against a supply arrangement or call-ups against a standing offer.

Hence, the total value of the standing offer or supply arrangement or the cumulative value of all call-ups against a standing offer or contracts against a supply arrangement is not considered when determining obligations under the FCP.

A contractor that has 100 or more permanent full-time and/or permanent part-time employees and that is provincially regulated is subject to the FCP if (a) he/she is being awarded a contract for goods and services valued at least $1M (including applicable taxes) or (b) a contract pursuant to a call-up against a standing offer or pursuant to a supply arrangement has a value of at least $1M (including applicable taxes).

Contractors that have 100 or more permanent full-time and/or permanent part-time employees and that are provincially regulated bidding on a standing offer or supply arrangement must sign an AIEE prior to issuance of the standing offer or supply arrangement.

Chantal Roy
Director General
Federal Programs Directorate
Employment and Social Development Canada – Labour Program

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