Non-competitive Contracting Process

Most federal contracts go through a competitive bidding process, but sometimes your department needs to award a contract directly to a specific supplier without opening it up to competition. That's non-competitive contracting. The Treasury Board Contracting Policy establishes competition as the norm in section 10.1, but there are legitimate reasons you might need to bypass the usual process—and strict rules about when you can.

How It Works

Section 6 of the Government Contracts Regulations lays out exactly four exceptions that allow contracting authorities to skip competitive bidding. First, there's a pressing emergency that doesn't allow time for bids. Second, the estimated expenditure stays under $25,000 for goods or $100,000 for services and construction. Third, soliciting bids wouldn't be in the public interest. Fourth, only one supplier is capable of performing the contract.

Here's the thing: you can't just decide one of these applies and move forward. Treasury Board Contracting Policy subsections 10.2.2 through 10.2.6 require full justification and documentation on your contract file. The Procurement Ombudsman has conducted multiple reviews of non-competitive contracting practices precisely because this area is so sensitive to challenge.

In practice, many single-source contracts use the Advance Contract Award Notice (ACAN) process described in Supply Manual Chapter 3.15.5. You post a notice on CanadaBuys for a minimum of 15 calendar days explaining your intent to award without competition. If no valid challenge comes in during that window, you can proceed—and the contract is actually deemed competitive. No ACAN required if there's genuinely no possibility of other suppliers meeting your needs, but that's a high bar to clear.

Key Considerations

• The dollar thresholds matter more than you might think. Once you cross $25,000 for goods or $100,000 for services, you need solid justification that fits one of the regulatory exceptions—the low-dollar threshold alone won't cut it anymore.

• Documentation isn't optional. Your procurement file needs to clearly demonstrate why competition wasn't feasible. The Procurement Ombudsman's 2016-2017 review found that inadequate justification was a recurring problem across departments.

• The "only one supplier capable" exception gets misused. You need evidence that no other supplier can meet your legitimate requirements—not just that you prefer a specific vendor or that switching would be inconvenient.

• ACAN challenges can derail your timeline. Those 15 calendar days are mandatory. If another supplier demonstrates they're capable, you may need to run a full competitive process instead.

Related Terms

Advance Contract Award Notice (ACAN), Sole Source Contract, Government Contracts Regulations

Sources

• Supply Manual - Chapter 3.15.5 Advance Contract Award Notice

• Government Contracts Regulations

• Procurement Practice Review: Review of Non-competitive Contracting

The bottom line: non-competitive contracting is a legitimate tool when circumstances warrant it, but it requires careful justification and documentation. Get your rationale clear before you start the process, not after someone questions your approach.