Contractual Evaluation

Contractual evaluation is the part of bid evaluation that examines the contractual aspects of an offer. In Government of Canada procurement, it means assessing a bidder's proposed contract terms and conditions, along with related time, financial and transition arrangements, against criteria set out in the evaluation plan for the solicitation.

The term appears by name in the responsibility matrix between Public Services and Procurement Canada (PSPC) and the Department of National Defence (DND). There it is a distinct sub-activity, separate from technical evaluation. The same idea runs through general federal guidance, which treats contractual review as one of the dimensions on which every offer is judged.

Contractual evaluation in the DND and PSPC responsibility matrix

The agreement between DND and PSPC on CanadaBuys lists sub-activity 4.6.2 as "Carry out Contractual evaluation (including contract t's & c's) in accordance with the Evaluation Plan." It is assigned to the materiel function, with PSPC responsible. Sub-activity 4.6.1, the technical evaluation of the statement of work and associated terms, sits with the project manager or technical authority, with DND responsible.

A third step, 4.6.3, consolidates the evaluation and recommends a supplier, and it falls to the PSPC contracting officer. The Supply Manual annexes carry the same structure. Technical and contractual evaluations are separate tasks done by different parties, both under one evaluation plan.

Contractual evaluation criteria set at the planning stage

Contractual evaluation is not an open-ended legal review. The same annexes list sub-activity 4.3.2 as "Develop Contractual Evaluation Criteria (time, finance incl. transition, contractual & consolidated evaluation plan)." The PSPC contracting officer is responsible for this step, which happens before the solicitation is issued.

The criteria therefore cover more than legal wording. They reach time, finance including transition, and contractual elements, and they are folded into the consolidated evaluation plan. When bids arrive, evaluators apply those pre-defined criteria rather than forming a fresh view of each offer.

How it sits alongside technical and financial evaluation

The CanadaBuys offer evaluation process states that offers must be reviewed to ensure they meet the contractual, technical and financial requirements of the solicitation. The client evaluates the technical portion, and the management portion where applicable. The contracting authority evaluates the contractual terms and conditions and the financial portion.

The guide also requires evaluation according to the procedures outlined in the solicitation. It describes fair, accurate and transparent evaluation as an important aspect of the procurement process. Contractual evaluation is one of several interlocking checks that together decide whether an offer is responsive.

Mandatory contractual criteria and non-responsive offers

Many contractual requirements are written as mandatory criteria. The CanadaBuys guide on specifying evaluation criteria explains that mandatory criteria identify essential minimum requirements and are evaluated on a pass/fail basis. It lists licensing requirements, minimum performance characteristics, delivery conditions, essential qualifications and budget limitations among the possible criteria. Rated criteria, by contrast, are used to distinguish the relative merits of offers.

The PSPC evaluation criteria guidance adds that failing any mandatory criterion renders a bid non-compliant, and it is given no further consideration. Mandatory criteria are not changed or relaxed after bid closing.

What contractual evaluation means for a supplier

Read the contract terms and conditions in the solicitation as carefully as the technical requirements, because they are evaluated against set criteria. A bid that takes exception to a mandatory term can be declared non-responsive, however strong its technical content.

• Check every mandatory criterion that touches delivery, licensing, qualifications or budget limits, and confirm you can meet each one as written.
• Address time, financial and transition elements in your offer where the solicitation asks for them.
• Follow the submission procedures in the solicitation exactly, since the evaluation follows those procedures.
• On defence work managed by PSPC, expect contractual and technical evaluations to be done separately before results are consolidated.