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FILE NO: 3800-002-003
DATE: March 4, 1999
TO: Functional Heads, Administration/Finance of all
Departments and Agencies
SUBJECT: Advance Contract Award Notices
SUMMARY
Advance Contract Award Notices may be used when there is a
justifiable reason to not call for bids, provided that the notice
clearly explains the nature of the work to be done, the name of
the proposed contractor, the estimated cost, why bids are not
being called, and sufficient time (15 days) is allowed for
potential challengers to come forward. If there is a valid
challenge to the proposed contract award, it must not be
ignored.
BACKGROUND
1. Ever since the electronic solicitation of bids was
initiated in 1992, departments and agencies have had the Advance
Contract Award as a competitive option. This option allows the
posting of a proposed procurement on the national electronic
bidding and information service, currently the MERX system
operated by Cebra Incorporated. For legitimate reasons, bids are
not solicited for some proposals. The Advance Contract Awards
policy permits the posting of these awards. If no other qualified
contractor comes forward with a valid challenge to the proposal,
the contract is deemed to be a competitive one and the higher
electronic contract entry authorities may be used. In the case of
service contracts, all contracting authorities have a basic entry
authority of up to $2 million when electronic tenders are
used.
2. Recently, some critics have noted potentially improper use
of Advance Contract Award Notices.
REVIEW OF THE POLICY
3. If one of the exceptions to bidding in Section 6 of the
Government Contracts Regulations, (Appendix B of the
Treasury Board Contracting Policy) is warranted, this
would normally result in a non-competitive contract. However,
since the use of the Advance Contract Award option makes the
proposed procurement transparent, makes potential bidders aware
of the procurement, and allows industry an opportunity to
participate in the procurement, the procurement is deemed as
competitive.
4. Care must be taken to ensure that the reason to set aside
the bidding is a legitimate one. This justification must be
established before the advertising of the proposed
procurement.
5. The notice itself is to describe the requirements or the
expected results of the contract, the name of the proposed
contractor, the estimated amount of the contract, and the reason
for not calling bids. This information must be complete enough so
that an interested contractor may determine if they are qualified
to do the work, and so make a valid challenge to the proposal.
The notice should not discourage possible challengers. For
example, one should not say, "this is not a competitive
solicitation...", or words to that effect. Finally, it should be
clear that potential challengers have 15 calendar days from the
posting of the notice to submit a challenge.
6. If there is a valid challenge to the proposed contract
award, it must not be ignored and the requirement must be
re-advertised as a competitive solicitation. If there are no
challenges within 15 days, the contract may be awarded.
7. Paragraphs 10.7.13 through 10.7.17 of the Treasury Board
Contracting Policy discuss this methodology in detail.
TRADE AGREEMENTS
8. If a proposed procurement is subject to any of the trade
agreements, there may be reasons for limited tendering as defined
in the respective agreement. The reason for limited tendering,
(i.e., no tendering), must be justified in accordance with the
wording of the applicable trade agreement. Limited tendering
reasons for the trade agreements can be found in the North
American Free Trade Agreement (NAFTA) Chapter 10, Article 1016,
the World Trade Organization - Agreement on Government
Procurement (WTO-AGP) Article XV, and the Agreement on Internal
Trade (AIT) Chapter 5, Article 506. These agreements are
available in the appendices of the Treasury Board's Contracting
Policy.
MONITORING
9. Departments and agencies should audit the use of the
Advance Contract Award Policy periodically to ensure that it is
being followed.
CONTRACTING POLICY WEB SITE
10. This notice will not be incorporated in to the electronic
version of the Contracting Policy since it does not change any of
the existing policies.
11. Online access: All TBS publications are now
available online via the TBS home page on GENet. To access this
site, type the following in the address section of your World
Wide Web browser:
http://publiservice.tbs-sct.gc.ca/
12. The Government Telecommunications and Informatics Services
(GTIS) manages GENet. For help in accessing it, please contact
your Informatics Division or your departmental library.
13. The same publications are also available via the TBS home
page on the Internet. The address is:
http://www.tbs-sct.gc.ca/
14. You will be able to access this Contracting Policy Notice
on the home page via "Policies and Publications". Under the title
"Comptrollership Branch", click on "Financial Management and
Contracting". In this page, click on "Contracting". Here, you
will find a listing of links to various contracting related
material, including the list of all Contracting Policy Notices
and TB circulars still in effect.
ENQUIRIES
15. For further information, please contact the Contract
Policy Division, Comptrollership Branch, Treasury Board
Secretariat at (613) 957-3789, or by fax at (613) 952-1381 or by
E-mail at:
Internet:
TBS-SCT@tbs-sct.gc.ca/.
Alan Winberg
Assistant Secretary
Risk, Procurement and Asset Management Policy Sector
Distribution: TB06, TB07, T004, T005, T009, T010, T022, T023,
T024, T025, T035, T036, T038, T041, T161, T224 and T225.
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