Contract award takes place after bid closing, completion of the bid evaluation, and ideally before the bid validity expiry date. The compilation of the contract refers to the process of gathering all the documents which constitute the complete contract.

The law of competitive bidding in Canada is complex and it continues to evolve, so it can be an arduous process to come to an understanding of the law and to remain current. The Canadian Construction Documents Committee (CCDC) document 23 “A guide to calling bids and awarding construction contracts” provides guidelines for calling bids and awarding contracts in Canada. Preparation of complete and accurate bid documents helps avoid confusion among the bidders. It also helps keep the process fair, simple, and transparent which is one of the basic principles of competitive bidding. Some thought given to the organization of the bid documents also assists in making compilation of the contract simpler.

After the bid submissions (completed bid forms and other documents requested in the bid documents) are received, they must be reviewed for completeness and compliance with the requirements of the bid documents in order to determine which bids (if any) are substantially compliant. The determination of what is and what is not substantially compliant should be made by the client’s legal advisors.

An architect may comment on incomplete information and other discrepancies or irregularities in the submissions, but should not draw any conclusion as to the compliance status of the bid. What constitutes substantial compliance is evolving, and acting in good faith with the best of intentions is not a valid legal defence should your advice be at all inaccurate.

After it is determined which bids are or aren’t substantially compliant, the non-compliant bids are then set aside. There exists between the bid calling authority (usually the owner) and each of the compliant bidders what is referred to as Contract A. Contract A is not a written executed contract, but a legal invention used to help ensure a fair and open bid process. The actual construction contract (Contract B) should be entered into only between the bid calling authority and one of the bidders who submitted a substantially compliant bid.

The compliant bids are then further analyzed according to the criteria stated in the bid documents to determine the bid ranking. It is generally understood that Contract B should be entered into with the highest ranking bidder. Often this is the lowest priced compliant bid.

The bid documents may include “privilege” clauses indicating among other things that the lowest bid may not necessarily be accepted, but it is considered “best practice” not to include privilege clauses. Such clauses seem to attract judicial review and comment, and as yet there does not seem to be a ruling that is widely and consistently accepted. It is preferable to carefully craft the bid documents and to pre-qualify the general contractors and critical trades in order to ensure the client’s intent is achieved. If a client insists on including a privilege clause, the architect should request that the client have the clause prepared by their legal advisors and then provided to the architect for incorporation in the bid documents.

Refer to CCDC 23 item 8.3 for a discussion of situations in which post-bid negotiations and re-bidding may occur and parameters affecting them. The practice of post-bid negotiations has also attracted judicial review, with one court equating the practice with bid shopping, which makes this another area in which architects should tread lightly.

Contract B (the construction contract) is formed when an owner formally accepts a bid. This acceptance can take many forms, but it is recommended that a “letter of bid acceptance” be used. This letter should be signed by the owner or their authorized agent and should generally state that the contractor’s bid has been accepted. It should not introduce any qualifications or changes from the bid or from any post-bid negotiations.

The letter is issued by the owner or on the owner’s behalf by their authorized agent. Due to the liability involved, it is recommended that architects do not act as the owner’s agent for this. The letter may be based on a template provided by the architect. The owner should be advised to have the letter reviewed by their legal advisors prior to it being issued to the contractor. Sample acceptance letters may be found in CHOP chapter 2.4 and in the “downloads” section of the Management of the Project\CCA web pages.

A letter of acceptance is usually enough for the contractor to begin to mobilize for the project while a formal contract is prepared.

As a courtesy, the unsuccessful bidders should be notified that they were unsuccessful. Again, sample letters may be found in CHOP chapter 2.4 and in the “downloads” section of the Management of the Project\CCA web pages.