5.85. Negotiations

Attention! As the transition to CanadaBuys is ongoing, Supply Manual references to ABE are to be interpreted as a generic system reference only. Users of the SAP Ariba environment should adapt their activities accordingly.

Buyers are advised to consult the tools available on CanadaBuys for guidance and procedures on completing procurement transactions in the SAP Ariba environment.

  1. When two or more responsive bids are received in response to a competitive bid solicitation and if no responsive bid represents fair value, contracting officers should examine the solicitation to determine possible causes. Subsequently, the contracting officer may consider negotiating with all responsive bidders or cancelling and reissuing the bid solicitation.
  2. When negotiating with more than one firm, care should be taken that all are treated fairly and impartially. The negotiations should not become an auction of the contract, as firms progressively improve their bids in the light of information about the position of other firms. The confidentiality of each firm's negotiating position is to be assured.
  3. The contracting officer must conduct all negotiations. If it is of a technical nature, the contracting officer and the client should conduct the negotiations. A negotiation report must be placed on the procurement file.
  4. For procurements subject to the trade agreements contracting officers must conduct negotiations in accordance with the conditions of these agreements. For example, see Article 19.11: Negotiation of the Canada-European Union Comprehensive Economic and Trade Agreement or Article XII: Negotiation of the World Trade Organization Agreement on Government Procurement, or the 'Negotiation' provision of the Canadian Free Trade Agreement. Canada's other free trade agreements have similar rules to the WTO-AGP.
  5. For procurements not subject to trade agreements,
    1. when a bid solicitation was used, negotiations may be entered into:
      1. before the completion of bid evaluation, provided that they are held with all bidders that submitted responsive bids; or
      2. after the bid evaluation, with only one bidder, provided that the bidder submitted the only responsive bid. Or, the bidder was selected after evaluating more than one responsive bid, but it can be demonstrated that if the negotiations had been held with all of the bidders that submitted responsive bids, there would have been no change in the bidder selected.
      The ability to prove that the same bidder will be selected, regardless of whether negotiations are conducted with all responsive bidders, presupposes that the requirement (for example, technical specifications) will not change during negotiations and, therefore, that other bidders given the same opportunity could not submit different or better offers;
    2. when an Invitation to Tender (ITT) was used and there is more than one responsive bid, but neither the lowest bid nor the other bids represent fair value, the contracting officer must have determined, before considering entering into negotiations, that it would not be more effective to cancel the solicitation and meet the requirement using another method of supply. When urgency is a major factor, the results of the original ITT might be capable of being used as the basis for entering into negotiations with bidders; and
    3. when a Request For Quotation was used, negotiations should be avoided.