Bid Challenge Mechanism

A bid challenge mechanism is a procedure that allows a supplier to challenge an aspect of a covered procurement before an independent reviewing authority. The supplier can obtain findings, recommendations, or other relief. Canada describes its system as one that lets potential suppliers seek review of any aspect of the procurement process by an independent reviewing authority, as set out in the Government of Canada's complete guide to its trade agreements.

The term comes from international government-procurement rules. Those rules require governments to give suppliers a fair, impartial route to raise complaints about how a purchase was run. In Canada, the route a supplier uses depends on which agreement covers the procurement and which level of government is buying.

What a bid challenge can cover

Under the NAFTA model, a supplier could challenge any aspect of a covered procurement. The challenge could concern the process from the entity's decision on its requirement through to contract award, according to the government procurement chapter of NAFTA. In practice, that means a supplier can raise unfair treatment during the solicitation, bid evaluation, or contract-award stages of a designated procurement.

NAFTA also required the reviewing authority to have no substantial interest in the outcome of the procurement. That independence is the defining feature of the mechanism. A complaint sent only to the buyer is not a bid challenge in this sense.

Trade agreements behind the mechanism

Several agreements contemplate or require impartial domestic procedures for reviewing supplier complaints. These include NAFTA, the World Trade Organization Agreement on Government Procurement (GPA), the Canadian Free Trade Agreement (CFTA), and the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

NAFTA allowed parties to set time limits for challenges, subject to a minimum of 10 working days from when the supplier knew, or reasonably should have known, the basis of the complaint. Provinces and territories maintain their own domestic review procedures for procurements covered by the WTO GPA. Under CETA-related commitments, each jurisdiction is responsible for the procedures that apply to municipalities within its borders, as the CETA government procurement summary report explains.

The federal route through the CITT

For federal procurements covered by trade agreements, the Canadian International Trade Tribunal (CITT) is the principal bid-challenge body. The federal government amended its procurement regulations so that federal procurements are subject to the CITT's independent bid-challenge mechanism under the CFTA. The amendment is published in the Canada Gazette.

Federal solicitation documents describe the options. They state that several mechanisms are available to potential suppliers to challenge aspects of the procurement up to and including contract award. They also encourage suppliers to raise concerns with the contracting authority before starting a formal challenge. An example is this bid solicitation on CanadaBuys.

Limits on coverage

The mechanism applies to procurements covered by the relevant trade-agreement obligations. It does not apply automatically to every government purchase. Federal sources identify coverage under agreements including NAFTA, the former Agreement on Internal Trade, the WTO GPA, and the CFTA.

One stated exception concerns Indigenous set-asides. The Procurement Ombudsman reports that Indigenous suppliers do not currently have access to the CITT's bid-challenge mechanism when an Indigenous or minority small-business set-aside is invoked. The stated formal recourse in that case is through the courts. See the Office of the Procurement Ombudsman.

What it means for a supplier

Before you bid, read the solicitation to confirm whether a trade agreement covers it, because that decides whether a formal bid challenge is open to you. If you see a problem, raise it with the contracting authority first, as federal documents encourage. Challenge windows are short and run from when you knew, or should have known, the basis of the complaint. Note the deadlines in the solicitation and act early. If the buy is an Indigenous set-aside, plan for court as the formal recourse.