Non-Competitive Procurement

Non-competitive procurement lets federal departments award contracts without running a formal bidding process. It's the exception to the rule in Canadian government purchasing, and you need specific justification under the Government Contracting Regulations to use it.

How It Works

According to Supply Manual Chapter 3.15, you can only use non-competitive contracting in particular circumstances. The Government Contracting Regulations lay out three main scenarios: pressing emergency situations where there's no time for competition, low-value contracts (under $25,000 for goods or $100,000 for services and construction), or cases where competitive bidding wouldn't serve the public interest. That last one? It requires solid justification—the kind that holds up under scrutiny.

Here's the thing: even when you think you have a sole source situation, you might need to use an Advance Contract Award Notice (ACAN). This process gives other suppliers a chance to challenge your assumption that only one vendor can meet your needs. You post the ACAN on CanadaBuys for 15 calendar days. If no one submits a valid statement of capabilities demonstrating they can deliver, your contract is considered competitive and you can proceed. If someone does challenge it successfully, you're heading back to a competitive process.

The dollar thresholds matter more than you might think. While the Regulations set baseline limits, departments can receive delegated authority from PSPC to award non-competitive contracts for goods up to $2 million. Services and construction have different thresholds and usually require more oversight. Before any award—competitive or not—you'll need Section 32 of the Financial Administration Act authority documented.

Key Considerations

• Documentation is everything. You need written justification before awarding non-competitively. "We've always used this vendor" doesn't cut it. Emergency situations require evidence of the emergency, and sole source awards need proof that no alternative suppliers exist.

• ACANs aren't optional in most sole source cases. Unless there's genuinely no possibility of another supplier (think proprietary technology with patent protection), you're expected to post an ACAN. Skipping this step is a common audit finding.

• Low-dollar thresholds include taxes. A $24,000 goods purchase might seem safe, but add HST and you could be over the $25,000 limit. Know your math before proceeding.

• Emergency provisions get scrutinized hard. Poor planning on your department's part doesn't constitute an emergency under the Regulations. The Office of the Procurement Ombudsman pays close attention to these justifications during reviews, and they've seen every excuse in the book.

Related Terms

Competitive Procurement, Sole Source, Advance Contract Award Notice (ACAN), Standing Offer, Supply Arrangement

Sources

• Supply Manual - Chapter 3.15: Non-Competitive Contracting

• Government Contracting Regulations (SOR/87-402)

• Office of the Procurement Ombudsman - Chapter 5: Methods of Supply

In practice, non-competitive procurement should be your last resort, not your first choice. When you do use it, make sure your justification could survive both an internal audit and a challenge from the Procurement Ombudsman.