Contracting Policy Notice 1999-3
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) 957-2526, 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.