Non-Competitive Process

A non-competitive process is a procurement method in which a contracting authority invites one source only to supply goods, services or construction, rather than seeking bids through a competition. It is often called sole sourcing. The Government of Canada describes the method as using "a sole source contract" in its public accounts reporting on acquisitions.

In Canadian federal procurement, the term covers awards that are not made through an open or otherwise competitive solicitation. It is closely associated with limited tendering, sole source contracts, and exceptions to the normal requirement to solicit bids. The method is not unrestricted. The buyer must establish that an applicable exception or other authorized circumstance exists, document its rationale, and comply with trade-agreement and Government Contracts Regulations requirements.

What the Treasury Board directive requires for sole-source justification

The Treasury Board Directive on the Management of Procurement requires contracting authorities to justify their use of a non-competitive process. The justification must identify the sole-source exception being invoked, give the rationale for using it, and include the associated documentation.

For procurements that are not subject to trade agreements, the Government Contracts Regulations permit exceptions to competition in specified circumstances. Treasury Board explains this in its Contracting Policy Notice. A non-competitive award therefore rests on a recognized exception, not on buyer preference.

Where a non-competitive process sits among CanadaBuys solicitation methods

The CanadaBuys buyer's guide sets out how offers can be solicited. A buyer can use a public advertisement, directly invite selected offerors where that is permitted, or invite a single source. The single-source option is available only when the conditions for a non-competitive process have been met.

When a mandatory supply arrangement replaces a non-competitive award

Meeting an exception on its own does not always settle the question. The Office of the Procurement Ombudsman found in a 2021 review that a department could be required to use a mandatory PSPC supply arrangement instead of awarding a contract through a non-competitive process. The review involved ProServices and other federal procurement methods.

The Ombudsman has also reported non-competitive procurement activity involving PSPC, Employment and Social Development Canada, the Privy Council Office, Natural Resources Canada and National Defence in its review of contracts awarded to McKinsey. These reviews show that non-competitive awards receive independent scrutiny.

Non-competitive process on First Nations federally funded capital projects

Indigenous Services Canada uses the same concept in its tendering policy for federally funded capital projects. It defines a non-competitive process as sole sourcing, where the project owner contracts directly with a particular contractor, consultant or business without a competitive process. The policy permits the method in specified circumstances. It requires supporting documentation to be kept and disclosed on request.

What a non-competitive process means for suppliers

A supplier cannot treat a non-competitive process as a right to receive a contract. The buyer must first have authority to use the method and must document the justification. If a buyer approaches your firm, be ready to:

• provide the technical and pricing information requested;
• show that you meet the stated mandatory requirements;
• supply evidence for any claimed unique capability, compatibility, intellectual-property position, urgency or other justification;
• meet the contract's security, integrity, tax, insurance and other conditions; and
• accept that the buyer may still have to use a standing offer, supply arrangement or other mandatory method instead of proceeding directly.

Supplier obligations depend on the specific solicitation, contract, program and exception invoked. Because buyers must record the exception they rely on, suppliers with a genuine, demonstrable differentiator are better placed to support a sound justification.