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About This FAM

Responsible Agency: Government Accounting - Finance
Issued: Mar 1995
Last Updated: Mar 1995

1. Introduction

This directive provides criteria, requirements and guidelines for inviting tenders, requesting proposals and awarding Government contracts. Refer also to FAM Policy 3301 and to the Government Contract Regulations.

The choice between an Invitation to Tender and a Request for Proposal depends on how much detail can be included in the specifications for the work of the contract. Subsection 4.1 provides guidelines for the choice.

2. Policy

Subject to the Provisions below, a contract authority shall formally issue in writing an Invitation to Tender or a Request for Proposal before entering into a contract. Exceptions under particular circumstances are permitted within the Provisions.

3. Directives

3.1

Competitive Tenders

Refer to PART II, TENDERS in the Government Contract Regulations. Except as permitted in the Regulations, a contract must be awarded as a result of formally invited competitive tender.

3.2

Requirement for Formal Invitation to Tender related to Estimated Contract Value

Formal (written) Invitations to Tender must be issued if the resultant contract value is estimated to be greater than $5,000. Tenders for contracts estimated to not exceed $5000 in value may be invited and submitted orally. Formal invitations are defined in the Government Contract Regulations.

3.3 Tender Records
3.3.1 Records must be kept for all invitations made and for all tenders and proposals received, whether invited orally or formally (in writing) and whether received orally or formally.
3.3.2

Unless a contract is for architectural or engineering services that will not exceed $25,000 in value or is any other type of contract that will not exceed $1,000 in value, a contract authority shall record the reasons for:

  1. awarding a contract without promoting the submission of competitive tenders or without issuing a formal Invitation to Tender; or,
  2. awarding a contract to other than the tenderer with the lowest tendered contract price, for example, when the lowest priced tender is not responsive or the lowest priced tenderer is not responsible.
3.4

Restriction on Authority to Request Proposals

A public officer employed in a position below the level of a director shall not request proposals unless specifically authorized to request proposals in an instrument that delegates contract authority to the officer. Section 14 of the Government Contract Regulations defines director for purposes of this restriction.

3.5 Evaluating Tenders and Awarding Contracts
3.5.1 Tenders must be comparatively evaluated on the basis of price only, provided the tenders compared are responsible and responsive. Except as permitted in the Government Contract Regulations, a contract must be awarded to the responsible tenderer submitting the lowest priced responsive tender. Responsible and responsive are defined in Section 1 of the Regulations.
3.5.2 Permission or direction to award a contract to other than the responsible tenderer submitting the lowest responsive tender must be given by the Executive Council.
3.6 Evaluating Proposals and Awarding Contracts
3.6.1 Proposals must be evaluated in a predetermined manner according to a predetermined formula including price and at least one other criterion specified in a written Request for Proposal. Except as permitted in the Government Contract Regulations, a contract must be awarded to the responsible proposer submitting the proposal which potentially will provide the best value to the Government. See Appendices A and B to this Directive.
3.6.2 Permission or direction to award a contract to other than the responsible proposer submitting the proposal which potentially will provide the best value to the Government must be given by the Executive Council.
3.7

Paramount Authority of the Executive Council

In accordance with the Government Contract Regulations, the Executive Council may award or direct the award of any contract to whomever it desires.

4. Guidelines

4.1

Determining whether to Invite Tenders or Request Proposals

Where possible, detailed specifications for the work of the contract should be provided with Invitations to Tender. Where possible, contracts should be formed as a result of tenders. Otherwise, if detailed specifications cannot be available or if marketplace proposals for goods or services are desirable, proposals should be requested.

4.2

Advice on Preparing a Request for Proposal

A department may obtain advice on preparing a Request for Proposal from the Department of Public Works & Services. Appendix A also contains proposal request information.

4.3

Importance of Confidentiality

A department should establish rules to maintain confidentiality whether using the proposal request or tender invitation method to enter into contracts.

Appendix A

CONTENT OF REQUESTS FOR PROPOSALS


The following minimum items should be included as they apply.

  1. A Project Description (Terms of Reference) including:
    1. the purpose of the work, i.e., a very brief general description of the end
      product;
    2. the scope of work, i.e., a very brief general statement of the extent of the
      work;
    3. the project circumstances, e.g., location, constraints, unusual conditions, etc.;
    4. investigations and examinations to be conducted by the successful Proponent;
    5. relevant policies, standards and requirements, e.g., protocol and confidentiality
      requirements;
    6. Government resources to be made available to the successful Proponent, e.g.,
      personnel, support services and information;
    7. a time schedule for completion of each stage of the work;
      h. the requirements for progress reporting, interim approval and final acceptance
      of the work and the financial controls to be applied by the Government; and,
    8. instructions.
  2. A description of Information to be Provided in the Proposal:
    1. names, qualifications and locations of proposed personnel and their responsibilities in the work of the contract;
    2. resources to be assigned or made available to the project;
    3. list of subcontractors and their qualifications and locations;
    4. proposed methodology or approach to the work of the contract;
    5. descriptions of relevant work on similar projects and a client list;
    6. proposed project schedule with comments if varied from the schedule called
      for;
    7. hourly personnel rates, estimated total fees and expenses with an explanation;
      and,
    8. head and branch office locations and proposed work performance locations.
  3. Required Proposal Content and Manner of Evaluation, including:
    1. a full description of content and format expectations;
    2. criteria and formulae to be used in evaluating proposals;
    3. submission acceptance closing time and location; and,
    4. statements of critical project requirements and specifications, e.g., "If the
      Proponent cannot meet stipulated schedule deadlines, it would not be
      appropriate to submit a proposal."