Award to Lowest Price

NOTICE: Recent revisions to the Core Policy and Procedures Manual (CPPM) and Trade Agreements mean that information,  including references to Chapter 6 Procurement on this page are out of date, links may not work, and should not be relied upon. This web page is being updated. Please visit Chapter 6 for the latest version of CPPM.

If a ministry determines that no existing supply arrangement (e.g. a corporate supply arrangement) will meet its needs (refer to the Core Policy and Procedures Manual (CPPM) section 6.3.2.a.1 and the Goods and Services Catalogue), a decision may be made to compete the requirement where the award is made to the lowest-priced bid.

Corporate templates and guidance is available below; however, ministries may have their own approved templates and/or differing processes.  Refer to the ministry links at the right or contact the ministry’s Procurement Specialist prior to using the corporate templates and processes described here.

When developing solicitation documents for services that will be awarded solely on the basis of price, pay particular attention to the specifications being developed.  Remember that each one must be met in order to consider a bid.  This may include certifications, delivery dates, staff qualifications, functionality, etc.

Note that only those bids that meet all mandatory requirements and specifications will be considered compliant bids and can be considered when awarding based solely on price.  The typical process allows bidders to submit amendments to or withdraw their bids up until the closing date and time, but afterwards, all compliant bids are irrevocable and cannot be changed.

Once the closing date and time have passed, any bid that missed a mandatory requirement (e.g. arrived late) or a specification (e.g. proposed delivery date is after the date specified) cannot be considered for the award nor can the bidder amend their bid.

Consider also how the lowest price will be determined.  This can be quite straightforward (e.g. one price is requested) or it can be quite complex (e.g. multiple unit prices, some of which may be optional).  The solicitation should include clear and concise language on how the lowest price will be determined if more than one price is being requested.  For example, points could be allocated between each individual price or categories of prices (the breakdown of these points should be disclosed), or a scenario that represents a typical year’s worth of purchases could be applied to the unit pricing to determine one overall price.

Refer to "How to Buy Goods" for more information when purchasing goods based on the lowest price bid.  Refer to "How to Buy Construction" for information on awarding to the lowest price when purchasing construction services.


Invitation to Quote for Services (ITQS)

When buying services using a price-based solicitation, be sure that all vendors who may respond are qualified to do the work.  This can be accomplished through specific certifications or qualifications, or by limiting the competition to selected vendors (i.e. either a pre-qualification list developed through the Request for Qualifications process, or to three or more selected vendors when the service contract value is under $75,000).

The Invitation to Quote for Services (ITQS) can be used only if one of the General Service Agreements is the form of contract. 

No rankings or ratings are permitted; the ITQS identifies exactly what services are required, and defines what is to be included in price.  Additional mandatory requirements could be included (e.g. current and valid certification, completion of at least one project in the past two years that meets a well-defined description), but they must be written as yes/no, pass/fail requirements.  See Mandatory and Weighted Criteria for more information on how to write mandatory requirements.

As with any solicitation for services, be sure to clearly indicate the term of the contract including any options to renew.  Remember that bidders are promising to be bound to the pricing quoted (as described in the ITQS) for the initial term, and that policy (Core Policy and Procedures Manual, section 6.3.3.e.10) only allows options to renew if the number and duration are disclosed in the solicitation.

The ITQS should be available to vendors (e.g. posted on BC Bid) for at least ten business days, although a longer period may be advisable if the description of the services are complex or lengthy.  Refer to the Invitation to Quote for Services template for more information on how to use this process.


Invitation to Tender for Non-construction Services (ITT)

The Invitation to Tender process is usually used for construction projects but it can be used for other types of services, although this is not a typical practice for the Province.

If soliciting for services where the award will be made to the lowest priced bid that meets complex specifications, the ITT may be the appropriate tool. Staff shold discuss the use of the ITT with their ministry's Procurement Specialist.

No corporate ITT template exists for non-construction procurements.  Ministries must contact the Legal Services Branch for assistance if using an ITT process for a non-construction acquisition, unless an approved ministry-specific template exists (refer to the ministry links at the right).

How long an ITT is available to vendors (e.g. posted on BC Bid) will vary, depending on the complexity of the specifications.  However, a minimum of 20 business days (i.e. four weeks) is generally recommended, to give vendors sufficient time to fully understand the requirements, to develop their pricing structure, and to submit a response.  Refer to Sufficient Time Posting Guidelines for more information.


Request for Standing Offers (RSO) and Request for Corporate Supply Arrangements (RCSA)

Standing offers and corporate supply arrangements are not a contract or a purchase order.  The Province is under no obligation to order anything from a vendor who has a standing offer or corporate supply arrangement.  The contract or purchase order is not created until an order is placed.

Standing offers are developed to meet the needs of the entities that issued them (e.g. generally an individual ministry or a Crown Corporation).  Others cannot order off the standing offer unless it was expressly allowed in the RSO solicitation document. 

Corporate supply arrangements are developed for the use of all ministries and will identify if they are available to the broader public sector as well.  Ministries may run their own RSOs, but RCSAs must be managed corporately, usually by Procurement Services Branch.

The solicitation process for a price-based RSO is similar to the ITQ (for goods) or the ITQS (for services) process.  However, a different form of solicitation document is required to ensure that the end result is clearly defined as a standing offer rather than a contract or purchase order.

The RSO needs to identify how long the offer will be in place, and any options to renew that may apply. 

If the RSO will result in standing offers with multiple vendors, a process needs to be clearly described on how one SO vendor will be chosen over another when requesting the goods and/or services.

RSOs where the award is made solely on price (i.e. lowest priced bid(s) is successful) should be available to vendors (e.g. posted on BC Bid) for a minimum of ten business days, or longer if the specifications are complex or lengthy.  Refer to Sufficient Time Posting Guidelines for more information.

No corporate template currently exists for RSOs; contact the ministry’s Procurement Specialist or Procurement Services Branch for assistance.


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