Voluntary Bid Withdrawal Rights

Voluntary bid withdrawal rights are a bidder's ability to withdraw a bid or offer on its own initiative before the bid-closing date and time. The bidder normally does this by giving written notice to the contracting authority. Solicitation documents and policies usually title these provisions "Bid Withdrawal" or "Withdrawal of Bids."

The right is strongest before closing and narrows sharply afterward. Canadian federal policy, NATO's procurement manual and NATO solicitation documents all treat the closing deadline as the point where the bidder's freedom to walk away largely ends.

Withdrawal before bid closing

Treasury Board contracting policy states that the federal government customarily allows bids to be modified or withdrawn before the closing time and date, provided the notification is in writing. The policy is published by the Treasury Board of Canada Secretariat: Treasury Board contracting policy.

NATO follows the same logic. Its procurement manual permits a bidder to withdraw a submission before the announced bid closure by written notice to the Procurement Service. See the NATO procurement manual. NATO Allied Command Transformation solicitations state that a bidder may withdraw its bid up to the date and time set for bid closing, in writing to the designated contracting officer. Some earlier solicitations also accepted facsimile. An example is this ACT invitation for bid.

Withdrawal after closing and for significant errors

Once bids close, Treasury Board policy states that modifications are not acceptable. One exception exists. An offer that contains a significant and demonstrable error may be withdrawn before acceptance if the error is made known to the contracting authority. The same policy family is available in the Treasury Board policy text on bid withdrawal.

The federal model bid-bond provisions address withdrawal after acceptance. They provide for the bonding company to compensate the contracting authority for increased costs caused by the withdrawal.

NATO treats withdrawal requests made after bid closure case by case, in coordination with the source-selection authority. They are not an automatic right.

Withdrawal under the Ineligibility and Suspension Policy

Public Services and Procurement Canada's Ineligibility and Suspension Policy contains its own withdrawal mechanism. During the relevant pre-award review process, a supplier may notify the contracting authority in writing that it is withdrawing its bid or offer. The withdrawal takes effect on the date of the notice. The details are in the Ineligibility and Suspension Policy.

Withdrawal and bid-rigging

A lawful withdrawal is a unilateral decision by the bidder. An agreement between competitors is a different matter. The Competition Bureau identifies an agreement that at least one person will not submit a bid, or will withdraw a bid, as bid-rigging when the issuing party is not informed before or when the bid is submitted or withdrawn. The Bureau lists this among the common types of illegal agreements under the Competition Act.

What it means for a supplier bidding on Canadian public contracts

• Send any withdrawal in writing and make sure it reaches the contracting authority before the closing date and time.
• Treat closing as the practical deadline. After it, modifications are not accepted, and withdrawal is limited to a significant and demonstrable error disclosed before acceptance.
• Check whether a bid bond applies, because withdrawal after acceptance can trigger compensation by the bonding company.
• Decide on withdrawal independently. Never coordinate it with a competitor without the issuing party being informed.