Unaffiliated Bidders

Unaffiliated bidders are bidders that are not affiliated with one another. They are not subsidiaries of the same entity, they are not controlled by the same entity or individual, and neither is the subsidiary of the other. In procurement, the term separates genuinely independent competitors from businesses that sit under common ownership or control.

In Canada, the test for affiliation comes from the Competition Act. The status matters most when a procurement is restricted on condition that a minimum number of independent suppliers respond. If the required number of unaffiliated bids does not arrive, the restriction can fall away and the procurement opens to all suppliers.

How the Competition Act defines affiliation

The Competition Bureau reproduces the Act's definition in its Competitor Collaboration Guidelines. Under it, two entities are affiliated in any of these situations:

• One entity is the subsidiary of the other.
• Both entities are subsidiaries of the same entity.
• Each entity is controlled by the same entity or individual.

The Bureau adds two further points. Entities that are each affiliated with the same entity at the same time are deemed affiliated with each other. An individual is affiliated with an entity if the individual controls it. Unaffiliated bidders are therefore bidders that meet none of these conditions with respect to each other.

Where unaffiliated bids decide the outcome

The concept carries weight when a solicitation is set aside for a defined group of suppliers, such as Indigenous businesses, but only on the condition that enough independent bids come in. Two bids from companies owned by the same parent would look like competition without being competition. A non-affiliation requirement prevents a restriction from being satisfied by related companies.

A federal example from a Public Services and Procurement Canada RFP

A Public Services and Procurement Canada request for proposal shows the mechanism. The procurement stays restricted to Indigenous businesses only if both of these conditions are met:

• Bids from at least two Indigenous businesses meet the mandatory requirements, including the applicable minimum point-rated scores.
• In the evaluation team's opinion, those businesses are not affiliated within the meaning of the Competition Act.

If the conditions are not met, the procurement becomes open to competition among all suppliers. A bid can be fully compliant and still fail to preserve the restriction if the evaluation team finds it affiliated with another responsive bidder.

Common ownership in NATO procurement guidance

Independence between competitors is also a concern outside the Canadian federal setting. The NATO procurement manual identifies common ownership between bidders as an issue that procurement officers should check when assessing competing bids. NATO's procurement opportunities are run as open competitions, so knowing who stands behind each bid is part of the evaluation. The manual does not use the phrase "unaffiliated bidders", but the concern it describes is the same.

What it means for a supplier

If you bid on a restricted procurement, check your relationships with other likely bidders before you submit. Look at common parents, shared controlling shareholders and any individual who controls more than one bidding entity, using the Competition Act definition as the standard. Read each solicitation for its own wording, since the evaluation team applies the non-affiliation condition. Current solicitations are listed on CanadaBuys, and the restriction conditions appear in the tender documents themselves.