Go-Ahead Letter

A go-ahead letter is an informal document issued by a buyer that permits a contractor or supplier to begin work before the formal contract is signed. It shows that the terms of the proposed contract are known and accepted, while the formal agreement is still being finalized.

The Government of Canada describes the go-ahead letter in the CanadaBuys Buyer's Guide as an instrument used at the award stage of procurement. Its purpose is to keep a project on schedule while contract formalities are completed. It is not a final agreement, and it does not replace the signed contract.

What a Go-Ahead Letter Authorizes

The letter gives a supplier permission to start performing before signatures are in place. Without it, a buyer with a firm schedule would have to wait for the full contract to be executed before any work could begin. The letter closes that gap by authorizing early performance on terms both sides already understand.

The authorization has limits. A supplier should proceed only within the scope and conditions the buyer has communicated. The letter permits early performance, but the formal contract remains the document that sets out the final agreement between the parties.

Conditions Before a Buyer Issues the Letter

CanadaBuys guidance sets out several conditions for issuing a go-ahead letter:

• The contract documents have received final approval.
• The contractor understands and agrees to all relevant proposed terms and conditions.
• The letter is approved by authorized signatories.
• The formal contract is sent to the contractor promptly after the letter is issued.

These conditions mean the letter is not issued while terms are still under negotiation. The terms must already be settled and accepted, and only the formal execution of the contract is outstanding.

Go-Ahead Letter Compared With a Letter of Intent and a Signed Contract

The CanadaBuys guidance treats the go-ahead letter as distinct from a letter of intent and from the signed contract. A letter of intent is a separate instrument. The go-ahead letter specifically permits early performance, which is what sets it apart.

It also sits below the signed contract. CanadaBuys states plainly that the letter is not the final agreement. The signed contract is the document that completes the award, and the go-ahead letter bridges the period before it arrives.

What It Means for a Supplier Bidding on Canadian Public Contracts

If a buyer issues you a go-ahead letter, treat it as authorization to proceed, not as the signed contract. Before you begin work, make sure you understand and agree to all relevant terms and conditions of the proposed contract, because the buyer issues the letter on the basis that you have accepted them.

• Keep your work within the scope and conditions the buyer has communicated.
• Expect compensation for work started, subject to finalization of the formal contract.
• Watch for the formal contract, which the buyer should send promptly after the letter.

Bid teams can track opportunities and award information through CanadaBuys, the Government of Canada's procurement site.