Non-competitive contracting process overview

A non-competitive contracting process is the route a Canadian federal organization follows when it awards a contract without soliciting bids. The Correctional Service of Canada defines a non-competitive contract as a contract that is entered into without soliciting bids. The Canada Revenue Agency uses the same description in its contract bidding and awards process audit.

Competition is the norm in federal procurement. Section 5 of the Government Contracts Regulations generally requires bids to be solicited, and section 6 sets out the exceptions. The Treasury Board Contracting Policy treats non-competitive contracting as one of those exceptions, so a department cannot skip competition without a reason it can document. The Office of the Procurement Ombudsman describes this framework in its 2011-2012 procurement practice review.

Grounds that allow a contract without bids

The Canada Revenue Agency audit identifies four possible grounds for non-competitive contracting:

• a pressing emergency
• low dollar value
• only one capable source
• circumstances in which competition would not be in the public interest

These grounds reflect the exceptions in section 6 of the Government Contracts Regulations. The buyer must be able to show which ground applies to the requirement in front of it.

What the contract file must show

The Public Service Commission states in its procurement audit guidance that the rationale for issuing a non-competitive contract must be included on file. That rationale must align with an exception in section 6 of the Government Contracts Regulations.

Public Services and Procurement Canada sets out file expectations for sole-source professional services in its file documentation checklist. Documents may include:

• the sole-source justification
• the solicitation sent to the supplier
• the supplier's proposal and the evaluation of it
• negotiation records
• security-clearance information
• the executed contract and any amendments

The Advance Contract Award Notice step

A department or agency that has justified a non-competitive approach may publish an Advance Contract Award Notice (ACAN). The notice announces its intention to award a contract to a pre-identified supplier. According to the Office of the Procurement Ombudsman, an ACAN may be used after the department has established that the approach is justified under an exception in the Government Contracts Regulations and applicable trade agreements.

The notice must describe the requirement or expected results in enough detail for other suppliers to judge whether they can meet it. Interested suppliers respond with a statement of capabilities. If another supplier demonstrates that it meets the requirement, a competitive process is required. If no qualified supplier comes forward, the department may proceed with the proposed award.

Related terms: sole source, directed contract and limited tendering

Several terms describe the same family of practices. In Canadian federal procurement they include non-competitive contract, sole source, directed contract, limited tendering and ACAN. NATO uses the term sole source and defines it in its procurement policy as a procurement method that allows the procurement authority to award a contract directly to a vendor without competition.

What this means for a supplier

A non-competitive process may not involve an ordinary open bid. A supplier may be approached directly, named in an ACAN, or asked for pricing, a proposal, technical information, security information or evidence of capability. Watch for ACANs on federal tendering notices, and respond within the posted period with a statement of capabilities if you can meet the requirement. The specific obligations depend on the procurement documents and the applicable security, technical and contractual requirements.