When you submit a bid to a federal department, the dollar figure you write down isn't always the number used to rank your proposal against competitors. The evaluated bid price is what procurement officials actually use for comparison—and it can include adjustments for lifecycle costs, regional benefit factors, currency conversions, or other elements spelled out in the solicitation. You might submit the lowest financial bid and still not have the lowest evaluated price. That's the distinction that matters.
How It Works
Section 5.5 of the Supply Manual establishes that bid evaluation must determine the best responsive bid by applying evaluation criteria in an impartial, consistent and fair manner. Any adjustments that transform your submitted price into an evaluated price must be explicitly defined in those criteria before bids close—you won't face surprise calculations after the fact.
Departments use these adjustments for specific policy or operational reasons. PSPC might apply lifecycle costing to a vehicle procurement, calculating fuel consumption and maintenance over a ten-year period and adding those costs to your bid price for evaluation purposes only. Or a construction RFP in Atlantic Canada might include regional benefit factors that effectively reduce the evaluated price of local bidders. The Government Contracts Regulations (SOR/87-401) require competitive bidding above certain thresholds, and the solicitation must disclose the financial evaluation methodology—including exactly how these adjustments work.
Here's the thing: the evaluated price is used strictly for ranking bids during bid evaluation. It doesn't change what you'll actually be paid under the contract. If you bid $100,000 but lifecycle costs add another $50,000 to your evaluated price of $150,000, you still get paid $100,000 for delivering the goods or services. The adjustment simply lets evaluators compare apples to apples when bids have different long-term cost implications or other factors the government wants to consider.
Key Considerations
- Read the evaluation criteria section of every solicitation carefully—this is where you'll find any adjustments that will be applied to your submitted price. Treasury Board policy requires this transparency, but you need to spot it and factor it into your bidding strategy.
- Currency conversions can create evaluated prices different from your submission if you're bidding in foreign currency. The solicitation will specify the exchange rate or methodology, often using Bank of Canada rates on a particular date.
- Some departments apply evaluation percentages or weightings that effectively adjust pricing. A 70/30 technical-financial split doesn't change your price, but lifecycle costing formulas or value-for-money adjustments do.
- When challenging an award decision through CITT or the Office of the Procurement Ombud, understanding how your evaluated price was calculated becomes essential. Errors in applying the stated methodology are grounds for complaint.
Related Terms
Responsive Bid, Evaluation Criteria, Lifecycle Costing, Financial Bid, Contract Price
Sources
- Supply Manual - Section 5.5: Bid evaluation and contractor selection
- Government Contracts Regulations (SOR/87-401)
- Treasury Board Contracting Policy Notice 2017-3
Always run the numbers both ways—what you're bidding and what will actually be evaluated. That's where competitive advantage lives.