Identical low bids: Best value

Identical low bids occur when two or more otherwise valid bids or proposals offer the same lowest price. Price cannot separate the bidders, so the buyer needs another basis for choosing a winner. The Treasury Board contracting policy provides one: the contract should be awarded on the basis of best value. The policy text is published on the Treasury Board of Canada Secretariat policy site.

This is a Canadian federal procurement tie-breaking rule, not a NATO-specific term. It sits in section 10.8.17, titled "Identical bids," of the former Treasury Board Contracting Policy. The same wording is reproduced in the XML record of the policy. Federal solicitations, including those from the Department of National Defence (DND), refer back to it when they explain how a tie will be resolved.

What section 10.8.17 of the Contracting Policy requires

The rule applies only to valid bids or proposals. A bid that fails a mandatory requirement is not part of the tie. When valid bids share the same lowest price, the policy directs the contracting authority to decide on best value. It then lists considerations that can be used to make that decision, so the outcome does not depend on price alone.

Best-value factors the policy lists

The policy names several factors that can be weighed when low bids are identical:

• Supplier performance: preference for a bidder with an overall satisfactory performance record.
• After-sales service: preference for a bidder able to provide adequate after-sales service.
• Delivery date: the date the bidder offers can be used to separate otherwise equal bids.
• Multi-item bid value: where several items are involved and only some prices are identical, the policy may favour the supplier bidding on the greatest dollar value.

The policy also covers the case where suppliers bid lowest on different items. There it may favour the firm with the lowest bid on the greatest dollar value, counting both items with equal prices and items on which that firm bid low. These provisions appear in both the XML and HTML versions of the policy.

How DND solicitations on CanadaBuys apply the rule

DND bid solicitations published on CanadaBuys state that identical low bids will be resolved using the Treasury Board policy's best-value approach. Some of them also set out their own ordered method. In the cited solicitations, the delivery date offered by the bidder is the first factor and the time the bid was received is the second. One example is the DND bid solicitation W8485-268872A, and another is W8485-268862A.

The ordered method matters because it replaces guesswork with a fixed sequence. A bidder who commits to an earlier delivery date, or who submits earlier, can win a tie. A solicitation's own sequence is the one to follow for that procurement.

What identical low bids mean for a supplier

Start with a valid bid that meets every mandatory requirement, since the tie-breaking rule applies only to valid bids. Then read the solicitation for its stated tie-breaking sequence rather than assuming the general policy wording governs. In the cited DND procurements, delivery date and bid-receipt time decide the outcome, so state delivery commitments accurately and submit before the deadline.

On multi-item bids, make the pricing complete and consistent. The policy identifies the greatest dollar value and item-level low bids as possible best-value factors, so incomplete pricing can cost you a tie. A strong performance record and credible after-sales service also count under the policy.