Public bodies in Canada, federal departments, provinces, municipalities, school boards and hospitals, buy construction and trade work by posting tenders openly and taking competitive bids. For a small contractor the rule to grasp first is this: a public bid is a legal offer. Once you submit it, you usually cannot withdraw it, and the lowest compliant price almost always wins on a straight construction tender. Get the price right, meet every mandatory requirement, and submit on time, and the work is awarded by formula, not by relationship.
Low-bid versus best-value
There are two ways a public owner picks the winner, and the tender documents tell you which one applies.
- Low-bid (lowest compliant responsive bid): the contract goes to the cheapest bid that meets every mandatory requirement. This is standard for invitations to tender (ITT) and invitations to bid (ITB) where the scope is fully drawn and specified. Once you clear the mandatory criteria, price is the only thing that separates you from the next bidder.
- Best-value (highest responsive combined rating): the bid is scored on technical merit plus price together, common on requests for proposals (RFPs) for complex, design-build or facilities work. The weighting, for example 70 percent technical and 30 percent price, must be stated in the documents. A higher-priced bid with a stronger technical score can win.
Some federal solicitations use a third method: highest-rated technical proposal within a stated maximum budget, where quality decides but only among bidders who came in under the price ceiling.
What the documents are called
Knowing the document type tells you how you will be judged:
- RFQ or ITQ (request or invitation for quotation): lowest compliant price, simple defined scope.
- ITB or ITT (invitation to bid or tender): lowest compliant price, fully specified construction scope.
- RFP (request for proposals): scored on technical merit and price, complex scope.
- RFPQ or prequalification: qualification only, no contract awarded at this stage. It is the first half of a two-stage process (see Prequalification and Clearances).
How a tender actually runs
- Notice posted on the relevant portal with a closing date, a scope summary and where to get the documents (see Where to Find Tenders).
- Documents issued: drawings, specifications, the bid form, bond requirements and special conditions.
- Site visit or meeting: many construction tenders include one. A mandatory site visit is non-negotiable, and attending even an optional one is worth the time.
- Addenda: the owner issues addenda to answer questions and correct errors. Watch the portal right up to close. A bid that does not acknowledge the last addendum is routinely thrown out.
- Bid submission: sealed, physical or electronic, delivered to the named office before the exact closing time.
- Public opening: many public owners open bids publicly and post results shortly after.
- Award: the owner checks compliance, picks the contractor and issues the award. Unsuccessful bidders can usually ask for a debrief.
Bid irrevocability: you cannot just walk away
Your bid stays legally open, or irrevocable, for the period named in the tender documents. For public construction this is commonly 60 days, and sometimes 90 or more on large or complex jobs. During that window you cannot withdraw without consequences. If your bid is backed by a bid bond (see Bonding and Surety) and you refuse the contract after being selected, you forfeit on the bond. Diarise the irrevocability date: if the owner has not awarded by the time it expires and you want out, act the moment it lapses.
Common disqualifiers
Any one of these gets a bid rejected outright. They are the reasons good contractors lose work they had priced to win.
- Late submission. Even one minute late. Portals log the timestamp and there is no discretion.
- Missing or wrong bid bond. No bond, the wrong amount or the wrong format.
- Missing mandatory certificates. Workers' compensation clearance, insurance, or a safety certification where it is required.
- Failure to incorporate addenda. Your bid must acknowledge every addendum issued.
- Signing or authority errors. The bid form not signed by someone with authority to bind the business.
- Pricing errors on the bid form. Altering the form's structure or leaving unit prices blank.
- Qualifying your bid. Writing "we exclude X" on a lump-sum tender that asked for the whole scope.
- Not meeting stated minimums. Experience or prequalification criteria you do not satisfy.
Under Canadian bid law, set out in Double N Earthmovers v. Edmonton (2007 SCC 3), an owner is not required to look behind a bid that appears compliant on its face. But material non-compliance, such as a wrong price structure or an unauthorized bid, cannot be waived by the owner. Immaterial slips with no effect on the price comparison sometimes can be.
Common mistakes
- Treating the bid as a draft. It is a binding offer the second it closes. Price as if you must do the job.
- Ignoring addenda until the end. They change scope and price. Check the portal daily near close.
- Skipping the optional site visit. It is where you spot the things the drawings do not show.
- Underpricing to win the first one. A public job lost on margin is harder to recover from than one you did not win.
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