1. General
As noted in Section 5.6, where an open call for bids results in no bids received or no bids which meet the terms, conditions, specifications or other criteria of an open call for bids are received, the public body may acquire the commodity by issuing a limited call for bids to fulfill the requirement.
Where a public body requires commodities and an open call for bids is not required to be issued because the estimated value of the commodity is below the open call for bid thresholds or the commodity is of a nature that an open call for bids could reasonably be expected to compromise security, the public body may issue a limited call for bids to fulfill the requirement.
Procuring a commodity through a limited call for bids requires the public body to either:
- Obtain quotations from at least three suppliers. These can be obtained through various methods such as telephone, fax, electronic, ITT and RFP. It is important to rotate the procurement opportunities among several suppliers, if possible, and not continuously invite quotations or bids from the same or select group of suppliers;
- Determine a fair and reasonable price for the commodity based on recent market conditions;
The method chosen to obtain quotations will usually be determined based on the value and complexity of the commodity being procured. If criteria other than price are being used to evaluate bids in a limited call process, these criteria and their relative weightings must be disclosed in the solicitation documents. If a fair and reasonable price approach is used, public bodies will be expected to demonstrate how they determined the price was fair and reasonable.
In accordance with the Regulations, the Chief Procurement Officer may identify a preferred approach for use by all or select public bodies for specific commodities, thresholds or both of them. The preferred approach for the acquisition of services and public works, which have seen a significant increase in the open call for bids thresholds, has been outlined in the following sections.
1.1 Goods – Preferred Approach
For goods valued at $10,000.00 and greater (to threshold limit per section 5 above), the preferred approach is for public bodies to obtain quotations from at least three suppliers. If this is not feasible, at least one quotation should be obtained and the price shall be fair and reasonable. Where three quotations are not obtained, the file documentation shall include rationale as to why obtaining three quotations was not feasible.
1.2 Services – Preferred Approach
For services valued at $10,000.00 and greater (to threshold limit per section 5 above), the preferred approach is for public bodies to obtain quotations from at least three suppliers. If this is not feasible, at least one quotation should be obtained and the price shall be fair and reasonable. Where three quotations are not obtained, the file documentation shall include rationale as to why obtaining three quotations was not feasible.
1.3 Public Works – Preferred Approach
For public works valued at $20,000.00 and greater (to threshold limit per section 5 above), the preferred approach is for public bodies to obtain quotations from at least three suppliers. If this is not feasible, at least one quotation should be obtained and the price shall be fair and reasonable. Where three quotations are not obtained, the file documentation shall include rationale as to why obtaining three quotations was not feasible.
1.4 Fair and Reasonable Price
Examples of methods in which a fair and reasonable price may be established include, but are not limited to:
- obtaining two direct quotations and comparing the prices to determine whether competitive market forces have ensured that the prices are fair and reasonable – note that if this method is being used, the lowest quotation bidder must be accepted;
- obtaining one direct quotation and substantiating that it is fair and reasonable through reference to trade catalogues, price lists, or a recent acquisition price for similar goods or services;
- obtain one direct quotation and substantiating that it is fair and reasonable through the utilization of a rotational system, which consists of at least two suppliers, and which is monitored to ensure that prices are competitive and fair and reasonable;
- obtaining one direct quotation and substantiating that it is fair and reasonable from an operations perspective where the goods or services are urgently required and a delay in delivery would negatively impact the operations of a department;
- obtaining one direct quotation and determining that the price is fair and reasonable as a result of a limited supplier base in the area (consideration would be given to additional direct and administrative costs associated with acquiring the goods or services in another area); or
- obtaining one quotation via shelf pricing or advertised price for a low dollar value, or purchasing card, acquisition and a direct quotation is not generally provided and, in this instance, business should be rotated to ensure that prices are competitive and fair and reasonable.
2. Pre-Qualified Supplier List
A public body may solicit bids from a pre-qualified supplier list provided that the list was established through a Request for Supplier Qualifications as outlined in the Act and Regulations. Where a pre-qualified supplier list has been determined as a result of a Request for Supplier Qualifications, a public body shall, when procuring a commodity the estimated value of which is below the open call for bids thresholds, do one of the following:
- Obtain quotations for that commodity from at least three suppliers on the list; or
- Determine a fair and reasonable price from the suppliers on the list for the commodity based on market conditions.
Quotations may be obtained through telephone, fax and electronically. The method chosen to obtain quotations will be determined based on the complexity of the commodity being procured. It is important to rotate the business opportunities among suppliers and not continuously invite quotations or bids from the same or select group of suppliers.
When procuring a commodity the estimated value of which meets or exceeds the open call for bids thresholds, the public body shall issue a limited call to all the suppliers on the list. This provides all the suppliers on the list with an equal opportunity to provide a bid.
The pre-qualified supplier list shall be valid for one year from the time it is compiled. This ensures any list will be dynamic and reflect the current environment, Also it provides new entrants the opportunity to enter the market place and for existing suppliers to update their qualifications.
Notwithstanding the above, a pre-qualified supplier list may have a validity period that exceeds one year provided that an annual notice is published by the public body and if published by electronic means, made available continuously.
A supplier who unsuccessfully responded to the initial Request for Supplier Qualifications and who has subsequently addressed deficiencies in their initial submission to meet the requirements; or another supplier who did not respond to the original opportunity and who meets the necessary qualifications may be added to the list upon request at any time. A letter stating the supplier’s name, date and why the supplier was added to the list shall be placed on the procurement file. In each case it is the supplier’s responsibility to meet all the requirements and qualifications of the original Request for Supplier Qualifications.
A pre-qualified supplier list shall be renewed through a Request for Supplier Qualifications to maintain openness and transparency in the procurement process, and ensure fair and equitable treatment of all suppliers.