10.8.1 Departments must ensure that adequate management controls are in place to protect the integrity of the bidding process and that these management controls ensure receipt, custody, bid opening, and recording are addressed.
10.8.2 Deleted.
10.8.3 Deleted.
10.8.4 Deleted.
10.8.5 Deleted.
10.8.6 A bid or proposal is or non-responsive if it does not meet all the mandatory requirements listed in the Request for Proposal or other solicitation documents and will be rejected.
10.8.7 Bids or proposals that respond to the mandatory requirements but contain a minor aberration may be considered if, in the opinion of the contracting authority's management:
1. the aberration is trivial or negligible compared to the total cost or scope of the supplies or services being procured;
2. the presence of that aberration, its removal by negotiation, or its clarification with the bidder could not reasonably be considered prejudicial to the other bidders; and
3. the decision to accept such bids is fully justified on the contract file.
10.8.8 When the bid solicitation requires the submission of bid security, the amount should be determined by the contracting authority in advance. When the appropriate security has been submitted but the bidder subsequently increases the bid price before the stipulated closing date, the contracting authority may allow the bidder reasonable time to supply any additional security required. A reasonable period may also be given to a bidder to resubmit the security deposit in the appropriate instrument if it was not initially done. When a bidder has submitted less than the exact financial security stipulated, the bid will be considered as non-responsive unless, as stated in article 10.8.7 above, the deviation is negligible, or the circumstances in article 10.8.10 below prevail (see also article 12.11.9).
10.8.9 When only one of a number of bids received in response to a competitive bid solicitation is (considered) valid and the contracting authority determines that fair value to the Crown will be obtained, the contract may be awarded to the one valid bidder and considered competitive (See definitions in Appendix A). In determining the fairness of the single valid bid, the following apply:
1. Where market prices for a work, product or service similar to those being solicited are readily available, the bid price may be compared with recent prices paid, prices in current price lists or catalogues, or recent prices paid by other organizations (such as government or large private sector corporations).
2. Where market prices are not readily available or applicable, the previous price paid for an identical or similar work, product, or service (adjusted for inflation), can be compared with the proposed bid or prices. Where such a work, product, or service has not previously been acquired, an acceptable price for the work, product, or service is to be determined based on a reasonable combination of cost, overhead and profit.
3. In certain instances, the price of the single valid bid may be compared with that of the invalid bids, depending on the reasons for declaring the other bids invalid.
10.8.10 When only one valid bid has been received, that bidder may also be asked to provide price substantiation. If the information provided is not acceptable to the contracting authority, then price negotiation should take place. If the single bidder does not appear to have the requisite financial stability, it may be in the public interest to require the bidder to submit an appropriate form of security before the bid is considered. Another alternative would be to invite new bids.
10.8.11 In the context of article 10.8.9(b) above, the cost(s) of a work, product or service is the sum of the applicable direct and indirect costs which are, or are to be, reasonably and properly incurred and/or allocated, in the performance of the work or provision of the product or service, less any applicable credits. In ascertaining what constitutes costs, any generally accepted method of determining or estimating costs that is applied consistently and is equitable in the circumstances may be used, including standard costs properly adjusted for applicable variances.
10.8.12 A cost may be considered reasonable if, in nature and amount, it does not exceed that which would be incurred by a prudent person in the conduct of a competitive business. In determining whether a cost element is reasonable, consideration should be given to:
1. whether the cost is generally recognized as normal and necessary for the conduct of the supplier's business or the performance of the contract;
2. the restraints and requirements of such factors as generally accepted sound business practices, arm's-length bargaining, federal, provincial and local laws and regulations, and contract terms;
3. the action that prudent business persons would take in the circumstances, considering their responsibilities to the owners of the business, their employees, customers, the various levels of government and the public at large;
4. significant deviations from the established practices of the supplier; and
5. the specifications, delivery schedule and quality requirements of the particular contract as they affect costs.
10.8.13 As stated in article 4.2, in assessing bids, the following apply:
1. if there are errors in the mathematical extension of unit price items, the unit prices prevail and the mathematical extension is adjusted accordingly;
2. if there are errors in the addition of lump sum prices or unit price extensions, the bid is not rejected but the total is corrected and the correct amount reflected in the total bid price;
3. any bidder affected by mathematical errors should be told immediately and given the corrected bid price.
10.8.14 Withdrawal of bids. Customarily the federal government allows bids to be modified or withdrawn before the closing time and date provided that the notification is in written form such as registered letter, telex, or facsimile transmissions. As stated in article 4.2, modifications are not acceptable under any circumstances after bid closing. However, if an offer is made in error or contains a significant and demonstrable error that is made known to the contracting authority, the bid may be withdrawn before acceptance. This reflects the principle of contract law that an offer is not binding if it is made in error or contains an error that is made known to the recipient. The government's model bid bond form contains provisions obligating bonding companies to compensate the Crown for higher costs caused by withdrawals after acceptance. Other types of bid security should provide the same protection.
10.8.15 As stated in article 4.2, the payment provision of a bid bond or other bid security will be invoked if the bidder refuses to execute the contract documents or to provide the specified contract security.
10.8.16 Bid protests. Contracting authorities should ensure that protests are resolved quickly and effectively so as not to delay the contracting process. When acting within the scope of its authority and existing statutes and regulations, the contracting authority's action to enter into a contract with a bidder involves the exercise of an administrative power that normally cannot be reviewed by the courts. Consequently, all bid protests, particularly those related to the impartiality of this process, should be referred to senior departmental management for resolution and the resulting decision should be communicated to the concerned or affected parties promptly. Where a bid protest is made pursuant to the provisions of the North American Free Trade Agreement, Agreement on Internal Trade and the World Trade Organization - Agreement on Government Procurement, the Canadian International Trade Tribunal Procurement Inquiry Regulations apply.
10.8.17 Identical bids. If identical low valid bids or proposals are received, the contract should be awarded on the basis of best value. The factors below should be used, subject to directives on national policies and objectives that may be issued from time to time. These criteria may be weighted as deemed appropriate by the contracting authority:
1. a bidder with an overall satisfactory performance record be given preference over a bidder known to have an unsatisfactory performance record;
2. a bidder in a position to provide adequate after-sales service with a good record in this regard be given preference over a bidder who is not able to provide adequate service or who has a poor record;
3. when delivery is an important factor, the bidder offering the best delivery date be given preference;
4. when there are several items included in the bid and the prices on only some of the items are identical, the offer of the firm bidding on the greatest dollar value be given preference; and
5. when a number of items are included in the bid and one or more firms bid lower on one or more of the items, the firm that bid low on the greatest dollar value be given preference both for the items on which it bid equal prices and for the items on which it bid low.
10.8.18 As stated in article 4.2, departments and agencies are to report to the Department of Industry any identical bids where collusion is suspected or any price so unreasonable that it may have been established to lessen competition or eliminate a competitor.
10.8.19 Change in scope of work. When there are changes in the job requirements or in the funds available that reduce the scope of the work, an attempt should be made to negotiate a new price with the successful bidder. If the change in the scope of the work is significant or negotiations cannot be concluded to the satisfaction of the contracting authority, new bids should be invited. For construction contracts, new bids are normally invited from the two lowest bidders on the original bid solicitation. When more than two bidders have bid in the same approximate amounts, consideration should be given to including these firms on the new bid solicitation. For goods and services, it is often the practice to solicit new bids without limiting the field of competition.
10.8.20 If the bidder limits the period of validity of the bid, this should be specified in the offer. When the contracting authority accepts a bid or proposal with some condition e.g., provision of financial security or obtaining security clearance, it may be necessary to establish and specify a period during which the acceptance of the bid remains valid.
10.8.21 Debriefings. Debriefings should be provided to unsuccessful bidders on request and should normally include an outline of the factors and criteria used in the evaluation, while respecting each bidder's right to the confidentiality of specific information.
10.8.22 Forwarding of Tender Documentation by the Entities under the North American Free Trade Agreement and the World Trade Organization - Agreement on Government Procurement. The respective agreements require that in open and selective procedures, contracting authorities shall forward the tender documentation at the request of any supplier participating in the procedure, and shall reply promptly to any reasonable request for explanations relating hereto.
10.8.23 For a procurement subject to NAFTA and WTO-AGP, contracting authorities shall reply promptly to any reasonable request for relevant information submitted by a supplier participating in the tendering procedure, as long as such information does not give that supplier an advantage over its competitors in the procedure for the award of the contract. The following procedures shall be followed in receiving tenders:
1. tenders shall normally be submitted in writing directly or by mail;
2. where tenders by telex, telegram, telecopy or other means of electronic transmission are permitted, the tenders made thereby must include all the information necessary to evaluate the tender, in particular the definitive price proposed by the supplier and a statement that the supplier agrees to all the terms and conditions of the invitation to tender;
3. a tender made by telex, telegram, telecopy or other means of electronic transmission must be confirmed promptly by letter or by the dispatch of a signed copy of the telex, telegram, telecopy or electronic message;
4. the content of the telex, telegram, telecopy or electronic message shall prevail where there is a difference or conflict between that content and the content of any documentation received after the time limit for submitting of tenders;
5. tenders presented by telephone shall not be permitted;
6. request to participate in selective tendering procedures may be submitted by telex, telegram or telecopy and if permitted, may be submitted by other means of electronic transmission; and
7. the opportunities that may be given to suppliers to correct unintentional errors of form between the opening of tenders and the awarding of the contract shall not be administered in a manner that would result in discrimination between suppliers.
10.8.24 The federal government has a strong commitment to serve Canadians better by expanding access to information and services available electronically. It is government policy to establish and manage the use of public key cryptography as a component of the government's common information management and information technology infrastructure and to support electronic alternatives to the use of paper, thereby increasing efficiency and reducing government costs.
1. Departments must ensure that only secure e-procurement systems that meet government policies are used;
2. A number of considerations are required before an e-procurement system will be approved, including an assessment of the threat, risk and technological requirements for implementing the e-procurement system. Security, privacy and legal considerations must also be assessed.
3. As e-procurement systems are introduced to the federal procurement community, it should be noted that for those procurements subject to the trade agreements, Contracting authorities must respect the provisions of the trade agreements.