The 1% Difference - How Canadian and American Bids and Procurements Differ

Genetic scientists discovered humans share 99% of the same DNA as chimpanzees. If you were comparing only the DNA sequences, you might conclude chimpanzees and people are virtually identical. After all, a 1% difference is nearly indistinguishable in most environments.

And yet, no one would ever mistaken a chimpanzee for a human. We conclude this particular one percent difference in the DNA conveys a disproportionate impact on the two species' make-up.

This DNA analogy is a useful metaphor when comparing Canadian bids and procurements to USA (American) bids and procurements. On the surface, American and Canadian procurement laws and practices are substantially the same. Both use a Request for Proposal, or RFP, which contains proposal preparation instructions, a statement of work, evaluation criteria, and resulting contract clauses.

The procurement laws behind the RFPs make up the small but striking difference between Canadian and American procurement. A landmark ruling by the Supreme Court of Canada in 1981 (Ontario v. Ron Engineering & Construction (Eastern) Ltd.) established the first, and perhaps most important and unique aspect of Canadian procurement law. Under this case law, there are, in fact, two contracts that result from an RFP, called Contract-A and Contract-B.

Contract-A vs Contract-B

Contract-A is a legally binding contract that governs how the procurement authority and bidders act and interact throughout the solicitation and evaluation process. Contract-A governs the bid solicitation rules, including the bidders' actions and the procurement authority's actions before, during, and after the bid closing time. Contract-A comes into force when the government publishes an RFP, and it survives until the procurement authority issues a resulting contract. Paradoxically, Contract-A can exist even if the government never awards a resultant contract.

In effect, Contract-A says a bidder has a reasonable expectation that the government will follow its bid solicitation processes set out in the RFP. If the government were to deviate from these solicitation processes, that deviation might violate Contract-A.

It is vitally important to recognize Contract-A is not just a courtesy, a polite custom, or general wisdom – it is part of Canadian procurement law. As such, Contract-A is legally binding upon the government and the bidder, and it is enforceable under law. A bidder, or potential bidder, can sue the government in court for a Contract-A violation before, during, or after the government reviews the bidders' proposals. Indeed, almost all procurement-related challenges that come before Canada's courts and the Canadian International Trade Tribunal (CITT) address Contract-A's alleged breaches.

The USA has no equivalent to Contract-A law. Unlike Canada, no law in the USA states the government must follow the processes set out in its RFP. Perhaps because of this lack of legal oversight, there is no counterpart in the USA to the CITT that adjudicates Contract-A disputes.

When the Canadian government evaluates all received proposals and selects the winning bidder, a Contract-B is struck. Contract-B is the contract the bidder is trying to win, and that is the contract we generally think about when we talk about winning an RFP contract.

Under Contract-A law:

1. The procurement authority must deal with all bidders fairly and equally;
2. The procurement authority cannot favour or discriminate against one bidder over another;
3. The procurement authority cannot engage in closed negotiations with any single bidder;
4. The procurement authority cannot alter rules of evaluation and selection after bid closing; and
5. The procurement authority must always follow all rules and restrictions set out in the RFP.

There are additional laws unique to Canadian procurement beyond Contract-A law:

1. The procurement authority can only consider compliant proposals, even if a non-compliant proposal offers a more attractive or valuable approach or solution;
2. The procurement authority cannot evaluate or select proposals based on criteria or weights not disclosed in the RFP;
3. The procurement authority has the right to reserve privileges and impose stipulations, providing that it clearly states such privileges and stipulations in the RFP; and
4. The bidder's offer set out in its proposal is binding and irrevocable.

Like the DNA in chimpanzees and humans, these differences in procurement law might appear inconsequential on the surface, yet their impact on how procurements are administered are profound. For example, Canadian RFPs must explicitly state the numeric weight of each evaluation criterion. If Criterion X is worth 40 points, and Criterion Y is worth 15 points in the resulting proposal evaluations, the published RFP must explicitly state those numeric values. American RFPs can be vaguer. The same RFP in the USA can state Criterion X is more heavily weighted than Criterion Y and leave it up to the bidder to guess how much emphasis to place on one criterion over the other.

More importantly, American evaluators are permitted to accept deviations, or non-compliant bids, if the result would satisfy the purchasing department's overall needs in the evaluation team's judgment.

In other words, an American evaluation team may select a bid that does not meet the mandatory criteria, but offers a superior solution overall, compared to a fully compliant bid. By contrast, Canadian evaluators are permitted to select compliant bids only. Even if a non-compliant Canadian bid proposes a vastly superior solution, the Canadian evaluator must reject that bid.

These two factors – unpublished weightings and flexibility in the interpretations and applications of evaluation criteria – create a mindset in American bidders that does not translate well in Canadian procurement. In the USA, win themes are critical. Consider win themes to be the "sizzle" of the bid, while the factual responses to the technical criteria are the "steak" of the bid. In the USA, because bidders do not know the evaluation criteria' weightings, and because evaluation criteria are more open to interpretation, win themes play a critical role in proposal writing. Win themes set out the sales pitch that claims why this is a superior solution and why the evaluator should select this solution over a competitor with a more compliant bid. Thus, the sizzle, or win themes, showcases the offered solution's advantages, regardless of how that solution scores against the evaluation criteria. Win themes are critical in American proposals because they can profoundly impact the selection of the successful bidder.

In Canada, sizzle does not sell. Canadian evaluators assess the factual responses to the technical criteria.

I have seen American proposal specialists come to Canada and focus on the sizzle to their Canadian clients' misfortune. In Canada, the only thing that counts is the evaluated score. No amount of sizzle will change the evaluation and resulting bid selection.

That is not to say win themes do not have a place in Canadian proposals – they do. Unlike win themes in the USA, which try to win the bid despite the score, win themes in Canada take on more of a supporting actor's role in which they try to increase the technical score. No matter how skilled they are, an American proposal specialist will not succeed in the Canadian procurement environment if they rely on win themes in the way they do in the USA.

This subtle but critical difference brings us back to the one percent difference in DNA.