Directed Contract

A directed contract is a contract awarded to a preselected supplier instead of through an open competition. The Treasury Board glossary defines it as a contract awarded to a preselected contractor when the contracting authority has justifiably set aside the requirement to solicit bids under one or more exceptions in section 6 of the Government Contracts Regulations (GCRs). The French equivalent is marché prescrit. See the Treasury Board glossary entry.

Public Services and Procurement Canada (PSPC) uses the same logic in its ProServices guidance. There, a directed contract goes to a pre-qualified supplier once the department has justifiably relied on a GCR exception. The term sits within Canadian federal procurement vocabulary alongside non-competitive procurement, limited tendering, single-source procurement and the Advance Contract Award Notice (ACAN). The PSPC directed contracts guidance sets out the definition for government employees.

Section 6 exceptions to competitive solicitation

A directed contract is never the default. A department or agency may use one only when an exception in section 6 of the GCRs applies. Examples include an emergency, a contract value below the applicable thresholds, a situation where soliciting bids is not in the public interest, and a requirement that only one supplier is capable of performing. The department must be able to show that the exception fits the facts of the requirement.

The Office of the Procurement Ombudsman describes a directed contract as an award made without a competitive process, where only one supplier is solicited at a time. Its dollar-value guidance covers how this applies to lower-value purchases.

Directed contracts under ProServices

ProServices is the PSPC method of supply for professional services. Under it, a directed contract is issued to a pre-qualified supplier after a GCR exception has been justified. For a requirement below $40,000, including applicable taxes, travel expenses and amendments, the contracting authority must first search the Centralized Professional Services System ePortal to identify eligible suppliers. The authority may then approach any eligible supplier that appears in the search results. The requirement is described in the PSPC directed contracts guidance.

How an ACAN leads to a directed contract

An Advance Contract Award Notice publicly announces the government's intention to award a contract to a pre-identified supplier. The notice names the proposed supplier and describes the requirement. Other suppliers then have a stated response period, generally at least 15 days, to challenge the proposed award. The Office of the Procurement Ombudsman describes this process in its follow-up review.

A challenge succeeds when it shows that another supplier can meet the ACAN requirements. In that case the department or agency can be required to run a full competitive solicitation instead of awarding the directed contract.

Justification and file documentation

Procuring authorities must justify the use of a directed contract. They must also document the procurement strategy in the procurement file. The Office of the Procurement Ombudsman states both obligations in its guidance on low-value contracting. A directed contract without a recorded justification is difficult to defend on review.

What a directed contract means for your bid team

Monitor ACANs for work in your area. When a notice appears, read the stated requirements and decide whether your firm can meet every mandatory criterion. If it can, submit a challenge in the manner and within the deadline the notice specifies. A late or incomplete response will not stop the award. If you work in professional services, check that your firm is a pre-qualified ProServices supplier and that your profile is complete, because the ePortal search drives which suppliers are approached for lower-value directed contracts.