Policy on tendering for First Nations' federally funded capital projects

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Table of contents

1. Foreword

This version of Indigenous Services Canada (ISC)'s Policy on tendering for First Nations' federally funded capital projects (tendering policy) takes effect on April 1, 2026, and replaces all previous versions. This policy is subject to change and will be reviewed periodically.

This policy acknowledges that First Nations are the owners of capital projects on reserve and manage their own contractual relationships for completing those projects.

2. Acknowledgements

This policy was developed with advice and input from First Nation representatives, as well as subject matter and technical experts from ISC regional offices and headquarters. ISC extends its gratitude to all individuals and organizations who reviewed the draft versions and otherwise contributed to this work.

3. Purpose

This policy states the requirements for hiring contractors and consultants for capital projects funded by ISC through the Capital Facilities and Maintenance Program (CFMP) and First Nations Infrastructure Fund (FNIF) authorities.

The objectives of this policy are to:

4. Scope

This policy applies to capital projects funded in whole or in part by ISC through the CFMP and FNIF authorities. These capital projects may include:

This policy does not apply to housing projects, even if funded by ISC through the CFMP authorities, nor to health facility projects funded by ISC through the Health Facilities Program authorities.

As stated in the Protocol for ISC-Funded Infrastructure (PIFI), compliance with this policy is required as a condition of CFMP and FNIF funding. In addition, all laws and regulations applicable to funded projects, including those listed in the PIFI, must be followed.

5. Issuing authority

This policy is issued under the authority of the Assistant Deputy Minister, Infrastructure and Governance Sector, pursuant to the Transfer Payment Terms and Conditions: Contributions to support the construction and maintenance of community infrastructure (CFMP and FNIF Terms and Conditions).

6. Terminology guide

Addenda: amendments issued during the tender or proposal call period to the plans, specifications, tender documents or conditions of the tender or proposal.

Best value: an approach to evaluating a bid or proposal that aims to achieve the overall optimal balance of:

Bid: also known as a "tender," a formal offer submitted by a bidder in response to a call for tenders.

Bidder: a person or organization that submits a formal offer in response to a call for tenders.

Bid security: a deposit or guarantee that bidders or proponents must provide when submitting a bid or proposal for a construction contract. Bid security provides financial protection to project owners to help ensure that parties are committed to the terms of their bids or proposals.

Call for proposals: also known as "requests for proposals", an invitation to prospective proponents to submit an offer, known here as proposal. It contains the total package of information made available to proponents for their use in preparing and submitting their proposal.

Call for tenders: an invitation to prospective bidders to submit a bid or tender. It contains the total package of information made available to bidders for their use in preparing and submitting bids.

Capital projects: projects funded by ISC through the CFMP and FNIF authorities as described in section 4.0.

Class "B" estimate: a cost estimate that is based on design development drawings and outline specifications, which include the preliminary design of all major systems and subsystems, as well as the result of all site/installation investigation. This estimate should support the establishment of realistic cost objectives. An independent Professional Quantity Surveyor must provide this estimate.

Competitively awarded works (in the context of the construction management approach): the goods and services contracted through a competitive process.

Compliant bidder or proponent: a bidder or proponent that meets all the mandatory requirements stipulated in the call for tenders or call for proposals.

Construction: the services provided by a contractor associated with the construction, repair, renovation and restoration of buildings and structures for a capital project.

Construction Estimator Certified: a person who, by training and experience, manages cost estimates for construction projects, prepares bids or proposals, and/or prepares construction progress schedules, as designated by the Canadian Institute of Quantity Surveyors (see also "Professional Quantity Surveyor").

Construction manager: an individual or business responsible for overseeing and coordinating construction projects, which includes planning, organizing, and managing all aspects of the construction process.

Consultant: the entity that provides architectural or engineering or other professional services for a project.

Contract security: provided by the successful bidder or proponent to provide financial protection to project owners to help ensure the project will be completed as agreed upon in the contract.

Contractor: the entity with whom the project owner enters into a contract for the provision of construction services.

General contractor: an individual or business responsible for the construction of a project, which includes entering into and managing contracts with subcontractors to deliver specific components of a project.

Indigenous business: a sole proprietorship, limited company, cooperative, partnership, not-for-profit organization or joint venture where at least 51% of the business is owned and controlled by Indigenous peoples, that may be listed on the Indigenous Business Directory, the business lists maintained by modern treaty rights holders (for example, the MMF's business list or the Nunavut registry), under Section 9.35.60 of Canada's Supply Manual, or the businesses otherwise recognized by project owners as Indigenous owned.

Invited competitive process: when the project owner invites a selected list of contractors, consultants, or businesses to submit a bid or proposal.

Local content: the available local resources (i.e., labour, goods, services, materials, facilities or equipment) to be utilized for the delivery of the project. This also includes training or apprenticeship programs provided to the First Nation's members to support their participation in the project. Local content is defined and specified by the First Nation as project owner and may be sourced from:

Non-competitive process: also known as "sole sourcing," when the project owner directly contracts with a specific contractor, consultant, or business without a competitive process.

Non-professional services: services normally provided by non-professionals or by tradespersons, including the renting of equipment and property. Examples include:

Open competitive process: when a project owner publicly advertises a call for tenders or call for proposals.

Own forces works: the labour, goods, services, materials, facilities or equipment that are sourced directly from the community in which the project is located, for projects using a construction management approach. Private businesses and community-owned enterprises are not considered own forces work for the purposes of this policy.

Pressing emergency: a present or imminent event that requires prompt action to protect the health, safety, or welfare of people, or to limit damage to property or the environment. Such events may be caused by a real or imminent wildland fire, flood, storm, earthquake, or other natural hazard, by accident or through the release of a polluting substance into the environment. An emergency event may also include any event that endangers life or property, causes social disruption or a breakdown in the normal flow of community goods, services, or resources.

Pre-qualification: a process that precedes a call for tenders or call for proposals and that is used to create a pool of qualified contractors, consultants or businesses for a specific project.

Professional Quantity Surveyor: a person who, by training and expertise, advises on construction cost planning, prepares cost estimates and value analyses, and sets up cost control systems. They are registered with the professional quantity surveyors' body in their province of practice or accredited by the Canadian Institute of Quantity Surveyors (see also "Construction Estimator Certified").

Professional services: the services provided by a consultant or business with specialized training and experience in a scientific, technical or managerial field necessary for the delivery of a project. These services may include project management, engineering, architectural, planning, design, contract administration, construction supervision, financial, or legal services.

Project delivery method: a framework that defines how the delivery of a project is organized, and how the roles and responsibilities are attributed. Commonly used project delivery methods that are recognized as industry standards, such as by the Canadian Construction Documents Committee (CCDCFootnote 1), include construction management, design-build, design-bid-build, and integrated project delivery. In this policy, construction management has been expanded to include the option for using own forces works.

Project owner: the First Nation Band Council that has overall responsibility for managing a given capital project.

Proponent: a person or business that submits a proposal.

Proposal: an offer submitted by a proponent in response to a call for proposal.

Request for qualification: an invitation to prospective respondents to submit information regarding their qualifications, experience and capacity to undertake a specific project.

Tender: also known as "bid," a formal offer submitted by a bidder in response to a call for tenders.

Thresholds for professional services and construction: the dollar value that the estimated contract value is compared against to determine whether an open, invited or a non-competitive process should be used for selecting consultants and contractors for professional services and construction, respectively. The applicable solicitation method is determined based on the estimated contract value.

Unbundling: a practice of breaking down a contract into smaller components, either by commodity, service type, or geographic grouping. This practice is used where practical and consistent with sound procurement management principles. Unbundling is to be distinguished from contract splitting, which is used to circumvent policy requirements and is a prohibited practice.

7. Policy

7.1. First Nations' own tendering policies

First Nations are encouraged to develop and implement their own policies to frame the process of hiring contractors and consultants to deliver capital projects.

For these policies to apply to capital projects as defined in this policy, the appropriate ISC regional office must review and confirm their compliance with the minimum requirements in section 7.1.1. Once compliance is confirmed, the First Nation's own tendering policy will take precedence over this policy. This shift will take effect from the date the First Nation's own tendering policy comes into force, or from the date its compliance is confirmed by the appropriate ISC regional office, whichever is later, unless otherwise specified.

If the minimum requirements in section 7.1.1 are updated, First Nations will be notified of the changes. First Nations will need to update their own tendering policies accordingly and have such updates reviewed and confirmed for compliance by the appropriate ISC regional office.

If a First Nation does not have a tendering policy, or if their policy does not meet the minimum requirements, or if in the interim there is a change to the minimum requirements, ISC's tendering policy will apply.

Additional guidance can be found in Appendix 1 – Guidelines for the Development of First Nations' Own Tendering Policies.

7.1.1. Minimum policy requirements

For a First Nation's own tendering policy to apply to capital projects as defined in this policy, they must meet the requirements established in sections 7.2 (key principles), 7.5 (thresholds), and 7.7 (evaluating bids and proposals) of this policy.

7.2. Key principles

Project owners are expected to apply the following principles when selecting contractors and consultants, and in the development and use of their own tendering policies, for capital projects:

  • the process of selecting consultants and contractors will be fair, equitable and transparent, based on good faith and fair dealing to all, including potential bidders and proponents and ISC
  • specific evaluation criteria, technical evaluation grids, and the selection methodology will be established and disclosed to all, including potential bidders and proponents and ISC
  • all available information, inquiries and addenda relevant to the tender or proposal will be equally disclosed to all, including potential bidders and proponents and ISC
  • all bids and proposals will be treated confidentially, whether submitted on paper or electronically
  • all bids and proposals will be opened with the appropriate safeguards, whether submitted on paper or electronically
  • all bids and proposals will be consistently evaluated based on clear and predefined evaluation criteria, technical evaluation grid, and selection methodology

7.3. Project delivery methods

The manner in which roles and responsibilities attributed to construction and professional services can vary, as capital projects can be organized in various ways. These common project delivery methods, which are recognized as industry standards, are:

  • Design-bid-build
  • Design-build
  • Construction management
  • Integrated project delivery

In this policy, construction management has been expanded to include the option to use own forces works.

This section provides direction on these methods, which can be used by project owners to deliver a capital project. The project owner selects the most appropriate project delivery method for each capital project. The guidance below may assist in making this determination.

The appropriate ISC regional office may provide relevant assistance upon request.

7.3.1. Design-bid-build

In this method, the project owner contracts with a consultant to design the project. When the design and tender documents are complete, the project owner solicits bids using a call for tenders and awards the contract to a general contractor who will construct the project.

7.3.2. Design-build

In this method, the project owner contracts with a single entity that is contractually responsible for both design and construction. Project owners often use a call for proposals process to solicit proposals from design-builders.

7.3.3. Construction management

In this method, the project owner procures a contract with a design consultant and a separate contract with a construction manager. The design consultant, registered architect, engineer or qualified professional, defines the scope of work and verifies that the performance complies with the project design and specifications. The construction manager is procured early in the design phase so they may provide cost, schedule, constructability and serviceability input to the design, in addition to managing the actual procurement and construction processes.

7.3.3.1. Basic forms of construction management

There are two basic forms of construction management:

  1. In the first form, the construction manager is procured to provide services only and acts as an advisor to the project owner. The project owner contracts directly with the trades. The CCDC 5A contract supports this method of delivery.

    A project owner may also take on the role of construction manager, provided that they have the capacity to undertake the project.

    Under this form of construction management, because the project owner enters into multiple contracts with trade contractors, a business plan must be developed and evaluated by the appropriate ISC regional office. The business plan will then be integrated into the existing submission requirements and funding approval processes. Detailed guidance on developing business plans can be found in Appendix 2 – Developing and Evaluating Business Plans.
  2. In the second form, the construction manager is procured to both provide services and to act as a general contractor. The CCDC 5B contract supports this method of delivery.
7.3.3.2. Use of own forces work

If a community has the capacity to carry out a portion of a project using its own forces, the project owner may divide the project into the following two components:

Component 1 – Competitively awarded works

Component 1 accounts for the portion of project work awarded through a competitive process. The thresholds established for projects that are outlined in section 7.5 are applicable to all competitively awarded works. As with all competitive processes, the project owner may include requirements for local content in the tender or proposal call, which could include labour or resources sourced from the community.

Before construction begins, the results of the competitive award process must be reviewed by ISC against the Class B estimates for the project. Approval of final resource levels (i.e., the project budget) will be subject to the satisfactory review of this information.

Component 2 – Own forces works

Component 2 accounts for the portion of project work carried out by resources in the community in which the project will take place (i.e., own forces) through the supply of skilled labour, appropriate equipment and/or required materials that are necessary and are already planned for project delivery. The project owner may source the own forces works through a non-competitive process.

Under form 1 of construction management, to be eligible to use own forces, the project owner must demonstrate in a business plan that the community has the capacity to manage or deliver all aspects of the own forces work, including the provision and availability of committed resources, and that the work will be completed in accordance with the approved standards and specifications of the project.

Under form 2 of construction management, the construction manager is responsible for planning, managing and delivering all aspects of the own forces works.

Regardless of the form of construction management used for a project, the valuation of own forces works must exclude any profit for the project owner. In other words, the project owner cannot profit from the own forces works. The total estimated cost of the own forces works must be evaluated to determine fair market value using the following methods:  

  • If the total estimated cost of the own forces works is less than $300,000:
    • A detailed cost estimate is required, based on a breakdown of the individual components of the own forces works and their associated costs.
    • ISC and the project owner must agree to the value of the own forces works.
  • If the total estimated cost of the own forces work is equal to or greater than $300,000:
    • The services of an independent Professional Quantity Surveyor, or independent Construction Estimator Certified professional, are to be retained to provide a detailed estimate of the own forces works.

ISC and the project owner must review and approve these estimates.

7.3.4. Integrated project delivery

Integrated project delivery is a project delivery method that emphasizes collaboration and integration among all project participants to share risks and rewards while working towards common project goals. This method has been increasingly adopted by project owners in Canada.

Under integrated project delivery, the project owner establishes a multi-party contractual agreement with contractor(s), designer(s), and other relevant parties. This agreement specifies their respective roles, rights, obligations, and liabilities in relation to the execution and delivery of the project.

When this method is used, only an open competitive process or invited competitive process can be used to evaluate and select the contractors, consultants, businesses or professionals who will collaborate and perform work on these projects.

Additional detailed guidance on this method can be found in CCDC 30 – Integrated Project Delivery Contractand its companion guide CCDC 30-G.

7.4. Solicitation methods

Project owners solicit and acquire construction and professional services through open competitive, invited competitive, or non-competitive processes. This section describes these solicitation methods.

Project owners should note that no matter the level of competition used, there are legal obligations associated with each of them. Project owners should consult with their legal counsel in developing all calls for tenders and calls for proposals to ensure they are meeting the requirements of contract law and other applicable laws and regulations.

For an open competitive process:

  • project owners publicly advertise a call for tenders or call for proposals to solicit bids or proposals without limiting who can participate. They should use electronic procurement platforms, news outlets (i.e., newspapers, radio, social media), or physical forms of advertising (e.g., local construction association postings) when electronic methods are not suitable for the project, or all of the above.
  • the advertisement must be broad enough so interested contractors, consultants and businesses can learn about the opportunity and participate, and provide enough time for them to do so.
  • only after the advertisement has been made public, project owners may contact potential contractors, consultants, or businesses to inform them of the project opportunity.

In some cases, an open tender or proposal call is preceded by a pre-qualification process, to increase the certainty of contracting with a qualified bidder or proponent. Please refer to section 7.6.1 for additional guidance on when the use of a pre-qualification process is recommended.

For projects that require the use of an open competitive process: if an open competitive process fails to receive a suitable bid or proposal, project owners may consider using an invited competitive process.

For an invited competitive process:

  • project owners must invite at least 2 prospective contractors, businesses or consultants to submit a bid or proposal on a project.

Project owners typically supply the call for tenders or call for proposals only to those who have been directly invited to submit a bid or proposal. However, they must not refuse other capable contractors, consultants or businesses who specifically request a copy of the call for tenders or call for proposals and express interest in submitting a bid or proposal.

For a non-competitive process:

  • a specific contractor, business or consultant is invited to submit a bid or proposal.
  • contracts for construction or professional services are awarded directly to that specific contractor, business or consultant without competition.
  • project owners must provide the necessary documentation that clearly outlines the scope of work, as well as all required contract documents, for the project.

7.5. Thresholds for professional services and construction

The hiring of consultants and contractors to deliver capital projects must be done in accordance with the processes described in this section. The solicitation method that may be used for a given project is determined by using the estimated value of the contract and the corresponding threshold values listed in Appendix 3 – Thresholds for Professional Services and Construction. Project owners may use lower thresholds for capital projects if desired.

First Nations may also establish lower threshold values for professional services and/or construction in their own tendering policies.

These thresholds apply at any stage of a given project, including the procurement of new services at any point.

As stated in section 7.3.4, projects undertaken using the integrated project delivery method must always use an open competitive process or an invited competitive process, regardless of the estimated value of the contract.

Appendix 3 also lists the thresholds that have been established for the competitively awarded works portion of construction management projects.

No thresholds have been established for soliciting non-professional services. Project owners may use an open competitive process, invited competitive process, or non-competitive process based on the size and complexity of the contract. This determination must follow industry best practices.

7.5.1. Thresholds for professional services

The below thresholds for professional services apply to all First Nation Bands:

  • If the estimated contract cost is equal to or greater than $650,000: an open competitive process is required
  • If the estimated contract cost is greater than $150,000 and less than $650,000: an open competitive process or invited competitive process is required
  • If the estimated contract cost is $150,000 or less: project owners may use an open competitive process, invited competitive process or non-competitive process. In this case, a non-competitive process should only be used if an open competitive process or invited competitive process have been assessed as unsuitable for the project, for reasons related to time, cost, and/or the effective use of funding. The project owner must be able to justify this decision with appropriate documentation and be able to disclose this information upon request. Such rationale and supporting documentation must be kept as a written record, per section 7.9

7.5.2. Thresholds for construction

Thresholds for construction are established for each First Nation Band. They are organized by region and categorized by project delivery method in Appendix 3.

The thresholds for construction are to be applied as follows:

  • If the estimated contract cost is equal to or greater than the threshold: an open competitive process is required
  • If the estimated contract cost is less than the threshold but greater than 25% of it: an open competitive process or invited competitive process is required
  • If the estimated contract cost is 25% of the threshold or less: project owners may use an open competitive process, invited competitive process, or non-competitive process. In this case, a non-competitive process should only be used if an open competitive process or invited competitive process have been assessed as unsuitable for the project, for reasons related to time, cost, and/or the effective use of funding. The project owner must be able to justify this decision with appropriate documentation and be able to disclose this information upon request. Such rationale and supporting documentation must be kept as a written record, per section 7.9

7.5.3. Other conditions for a non-competitive process

Despite sections 7.5.1 and 7.5.2, a non-competitive process may be used when any of the following conditions apply:

  • there is a pressing emergency. In this case,
    • if the funds to do so have been approved by ISC, the project owner may authorize essential remedial work by a contractor on a negotiated price basis
    • the remaining work will be contracted in accordance with the appropriate solicitation method per the threshold values in Appendix 3. Such rationale and supporting documentation must be kept as a written record per section 7.9
  • the nature of the work is such that it would not be in the public interest to solicit bids or proposals, or
  • only 1 contractor, consultant or business is capable of fulfilling the project due to patents, copyright requirements, technical compatibility, unique expertise, or remoteness of the project site

7.5.4. Requirements for use of a non-competitive process

When using a non-competitive process, the project owner must retain the appropriate documentation related to this decision and disclose this information upon request. Such rationale and supporting documentation must be kept as a written record per section 7.9.

7.6. Preparation of calls for tenders and calls for proposals

This section sets out the requirements and guidance for selecting contractors or consultants for construction and professional services.

Calls for tenders and calls for proposals must contain all relevant project information that bidders and proponents need to submit a complete bid or proposal. This includes clearly stating the criteria and methodology for evaluating bids or proposals. Project owners must disclose this information equally to all potential bidders and proponents to ensure fairness and transparency in the process.

Additional guidance on what is typically included as part of calls for proposals and calls for tenders can be found in sections 6 and 14 respectively of Appendix 4 – Best Practices to Support the Implementation of the Tendering Policy.

7.6.1. Pre-qualification

Prior to issuing a call for tenders or call for proposals, project owners may, based on the specific needs of the project, conduct a pre-qualification process to assess the experience and qualifications of potential bidders or proponents. This step helps identify suitable participants for projects that are costly, complex, involve unique working conditions, require special technical skills, or have a limited pool of qualified bidders or proponents.

There are two primary methods of pre-qualification:

  1. Open: the request for qualification is publicly advertised so that any prospective respondent has an opportunity to be pre-qualified
  2. Invitational: the request for qualification is provided to a limited number of prospective respondents. Project owners should ensure that an adequate number of respondents are invited to participate

Project owners may also qualify a consultant or contractor in a non-competitive process to address a pressing emergency to ensure a contractor or consultant is qualified to perform the work and is able to meet the mandatory requirements.

The request for qualification must contain the criteria and methodology that will be used to evaluate the respondents. Additional guidance on preparing requests for qualification and associated evaluation procedures can be found in industry standard documentation, for example CCDC 29 E – Guide to Pre-qualification.

7.6.2. Unbundling

Unbundling is the practice of separating requirements of a project into distinct components to meet legitimate operational requirements, such as those related to logistics or timing. More generally, unbundling may be used to enable smaller businesses, including Indigenous businesses, the opportunity to submit a bid or proposal for a portion of the project.

Unbundling is done based on the content of the contract, rather than the dollar value. Project owners may group components by goods, services or geographic areas, provided that each component is clearly defined and justifiable. Project owners must apply sound procurement management practices and comply with all applicable laws, regulations, and policies when unbundling. Thresholds for professional services and construction still apply to unbundled contracts.

Unbundling must not be confused with contract splitting. Contract splitting is a prohibited practice because it intentionally divides a contract into smaller parts to bypass policy conditions, such as the threshold requirements, in order to avoid a competitive process.

Before using unbundling, project owners should consult their own legal advisor to confirm its appropriateness. If unbundling is used, project owners must document the rationale and intent, with consideration of relevant factors, such as:

  • total estimated cost of the contract
  • complexity of the work
  • potential increase in contract management workload
  • opportunities created for small, specialized or Indigenous businesses

This rationale and supporting documentation must be kept as a written record per section 7.9.

7.6.3. Bid security and contract security

Bid security and contract security ensure that contractors and consultants fulfill their obligations under the bid or contract and provide financial protection to project owners. During the bid solicitation phase, bid security ensures that if the project owner accepts their bid, the bidder will enter into the construction contract. During the construction phase, contract security ensures that the contractor will complete the contract in accordance with the contract terms.

It is the project owner's responsibility to determine the type of bid security and contract security that is required for the project and the amount of such securities. The project owner must also include such security requirements in the call for tenders or call for proposals.

7.6.3.1. Types of security

Traditional forms of bid security and contract security include the following, although these may vary by province:

  • Bid bonds/performance bonds: a three-party agreement approved by the Project Owner and issued by an entity that is licensed to issue surety bonds in the province in which the project is located
  • Security deposit: amount held in the form of a certified cheque, bank draft, money order, a line of credit or an irrevocable letter of credit, that can be drawn from a recognized financial institution or Government and payable to the Project Owner in the event of a default
  • Labour and materials bond: a legally binding three-party agreement involving an insurance or surety company which guarantees payment to subcontractors/suppliers

Alternative forms of security may also be considered by the project owner. The expression "alternative form" in this policy mainly refers to a holdback, which is a contractually agreed-upon percentage of money that is withheld from the progress payments made to contractors and subcontractors. It could also refer to a secured interest in real property that is eligible for securitization.

7.6.3.2. Minimum security requirements

The following minimum security requirements are meant to assist project owners in making bonding decisions. Ultimately, it is up to the project owner to determine whether these minimum security requirements are sufficient for a given project. For example, notwithstanding the minimum security requirements provided below, based on various factors, a project owner may still require bid and contract security for a project valued at less than $5,000,000. It is recommended that project owners consult their own legal counsel regarding the imposition and enforcement of bid and contract security requirements.

For projects with total estimated costs that are equal to or greater than $10,000,000:

  • Traditional forms of bid security and contract security are required
  • A bid bond/performance bond or a security deposit is typically 10% of the estimated contract value. This proportion may be increased by the project owner for high-value or more complex projects

For projects with total estimated costs that are equal to or greater than $5,000,000 and less than $10,000,000:

  • Traditional forms of bid security and contract security are required
  • If the traditional forms of security cannot be obtained, alternative forms can be accepted
    • a holdback used as contract security must be at least 8% in addition to the industry standard 10% deficiency/builder's lien holdback

For projects with total estimated costs that are less than $5,000,000:

  • Bid security and contract security may be waived if:
    • the bidder or proponent's business demonstrates a minimum of 3 years of relevant experience;
    • the bidder or proponent's business provides a written record of successfully completing projects of similar size and complexity; and
    • the Prime Consultant (architect or engineer) and construction manager, as applicable, have indicated in writing their support for the project owner's decision to waive security based on the project's risk level and complexity and the value of the asset. This rationale and supporting documentation must be kept as a written record per section 7.9.
  • If bid and contract security are not waived:
    • the use of a traditional form of security is preferred
    • if traditional forms of security cannot be obtained, alternative forms can be accepted
      • For projects with a total estimated cost between $5,000,000 and $1,500,000, a holdback used as contract security must be at least 5% in addition to the industry standard 10% deficiency/builder's lien holdback
      • For projects with a total estimated cost of less than $1,500,000, the project owner will determine the amount of holdback

Note that bid security provided in the form of a security deposit may be converted to contract security.

Additional information related to bid security and contract security can be found in sections 15 and 20.4 of Appendix 4, respectively. 

7.6.4. Local content

Project owners may create opportunities for First Nation community members and local contractors, consultants, and businesses, as described in the definition of "local content" provided in section 6, to participate in the work.

Project owners must integrate local content requirements and/or opportunities into calls for tenders or proposals, and the resulting contracts. Sections 7.6.4.1 and 7.6.4.2 below outline some best practices to support the preparation and evaluation of local content.

Information on local content, including evaluation criteria and methodology, and mandatory local content requirements if applicable, must be disclosed equally to all potential bidders and proponents.

Rates for local content should be reasonably in line with market value and local capacity.

Projects that utilize local content are not exempt from the application of the thresholds per section 7.5.

First Nations are encouraged to develop and regularly review a source list of local and Indigenous contractors, consultants, and/or businesses capable of working on capital projects to support the use of local content in these projects.

7.6.4.1. Information to include on local content

The call for tenders or call for proposals must require the bidder or proponent to include information related to the local content opportunities they are committing to providing. Such information could include the following: 

  • the estimated amount and type of local services and labour that is anticipated to be hired, and for how long
  • the estimated amount and type of local equipment that is anticipated to be rented, and for how long
  • the estimated amount and type of local construction materials that are anticipated to be purchased, and for how long
  • a plan for providing training opportunities for community members. This training must be directly linked to the project and enable local community members to participate in its delivery

The project owner must also clearly describe in the call for tenders or call for proposals the requirements that contractors and consultants will be expected to meet to fulfill their local content obligations. These requirements could include, for example:

  • contacting individuals and settling terms and conditions of the employment of labour, rental of local equipment, purchase of local construction materials and the associated hiring and layoffs.
  • submitting a summary report at regular intervals throughout the project to verify the proper implementation of the local content. The report could contain:
    • local content requested
    • local content performed
    • variance between the local content requested and the local content received
    • a plan for addressing this variance, if applicable
    • time sheets and invoices related to the local content
7.6.4.2. Methods of evaluating local content

The methodology by which local content will be evaluated must be clearly stated in the call for tenders or call for proposals. Two approaches are possible, and they can be applied jointly or separately:

  1. including an amount of First Nations' resources that would constitute a minimum pass mark to be considered compliant. In this case, the project owner must confirm that the identified minimum local content amount can be met by the available local labour, equipment, and materials. The following factors could be considered when determining the minimum local content amount: 
    1. the nature of skills required to perform the work;
    2. the available local labour with the necessary skills to perform the work, including apprentices and/or students registered in training programs who are or will become available to perform the work;
    3. the availability of local equipment and materials;
    4. other ongoing or anticipated projects in the community or surrounding communities that may impact the availability of necessary labour, equipment, and materials; and
    5. any other relevant factors.
  2. establishing a technical evaluation grid that grants more points to the best use of local content.

A technical evaluation grid is required to score local content. This grid will need to detail how these rubrics are to be evaluated and scored.

The rationale when making these determinations, and supporting documentation, must be kept as a written record per section 7.9.

Once the contract is awarded, the local content portion becomes a contractual obligation.

7.7. Evaluating bids and proposals

When an open competitive process or invited competitive process is used, the project owner must clearly state the following in the call for tenders or call for proposals:

  1. The criteria that will be used to evaluate the bids or proposals, including which criteria are mandatory and which are point rated, as both could be present simultaneously;
  2. The technical evaluation grid that will be used to determine how the bids or proposals will be ranked by the evaluation committee; and
  3. The methodology with which the evaluation committee will select the winning bidder or proponent.

Project owners should also consider including a standard privilege clause in the call for tenders or call for proposals that would give the project owner the right to not accept any bid or proposal. This would permit the project owner the right to not accept any bid or proposal, and subsequently issue a new call for tenders or call for proposals with modified documents. This may be applicable to situations where the prices for bids or proposals exceed the funding available for the project.

Project owners should consult with their legal counsel when developing calls for tenders and calls for proposals.

All compliant bids or proposals received in response to a call for tenders or call for proposals must be evaluated and scored accordingly. All of the evaluation criteria must be those, and only those, pre-established in the call for tenders or call for proposals.

All bids and proposals must be opened in the presence of at least three individuals and recorded per section 7.9.

Appendix 5 – Additional Guidance on Evaluating Bids and Proposals provides examples of evaluation processes for using each of the methodologies outlined in this section for illustrative purposes.

7.7.1. Mandatory tender and proposal requirements

A "compliant" (otherwise known as "responsive") bid or proposal is one that complies with all mandatory requirements stated in the call for tenders or call for proposals. The mandatory requirements should be stated using terms such as "shall," "must," or "will." Topics where this applies could include, for example:

  • Certifications
  • Licensing
  • Bid security
  • Insurance
  • Local content, such as satisfying the stated minimum amount
  • Workers' Compensation Board clearance

Because of their importance, it is recommended that mandatory requirements be grouped together in the call for tenders or call for proposals.

Only compliant bids or proposals will be further evaluated, and those that are found non-compliant will be disqualified from the process.

Price must be evaluated for all compliant bids and proposals.

For projects using the construction management approach, the methodologies outlined in this section apply to the competitively-awarded portion of the project. The own forces portion of such projects will be undertaken pursuant to section 7.3.3.

7.7.2. Technical evaluation grid

To determine best value, project owners may choose to evaluate some technical aspects using a point system. The objective should be to achieve a balance between cost-effectiveness, quality of bids or proposals, and the creation of socioeconomic benefits to the community.

Examples of technical criteria include, but are not limited to:

  • Local content
  • Knowledge and awareness of Indigenous culture and traditions
  • Past experience working with Indigenous communities 
  • Project team expertise
  • Industry experience, including past performance records on similarly completed projects
  • Materials, labour qualifications, and construction methods (to ensure they meet the defined quality and performance standards)
  • Proposed methodology (for proposals)

When using point rated evaluations, project owners must ensure that their evaluation methodology represents a balanced approach that does not overly favour a single criterion so as to significantly impact the results of the evaluation.

Evaluation rubrics must be sufficiently developed. The rubric's description and allocation of points must standardize the evaluators' review and ensure consistency and accuracy in scoring.

For examples of evaluation processes using each of the methodologies described below, please refer to Appendix 5.

7.7.3. Selection methodologies

There are various methodologies by which bids and proposals for capital projects may be evaluated. These include:

  1. Compliant bid or proposal that has the highest combined rating of technical evaluation criteria and price. In this case, the weight of price must be significant enough to impact the final combined rating.
  2. Compliant bid or proposal that scores the lowest price-per-point. To find the price-per-point, evaluate the technical evaluation criteria, and then divide the price by the total points awarded for these criteria.
  3. Compliant bid or proposal with the lowest price that scores at least the specified minimum percentage or number of overall technical points, or at least the specified minimum number of points for each point rated technical criterion.
  4. Compliant bid or proposal that has the lowest price, also known as lowest compliant bid or proposal. 
  5. Compliant bid or proposal that scores the highest number of points on the technical evaluation criteria within the project owner's budget. Integrated project delivery projects may use this evaluation methodology.

Not all selection methodologies are suitable for every project. The selection of the most appropriate methodology should be done on a project-by-project basis, considering factors such as project cost and complexity, among others as applicable.

7.8. Contract award

Prior to entering into a contract, project owners must confirm that the contract cost falls within their budget, including any contributions that are to be provided by ISC.

If a bid or proposal is accepted by the project owner after the period specified for acceptance in the call for tenders or call for proposals, the contractor or consultant can refuse the contract without penalty. 

7.9. Written records

To promote sound financial management and transparency, the complete record of all decisions, with supporting documentation, must be maintained for 7 years and made available to ISC upon request. This includes at a minimum:

  • if a non-competitive process is used, the rationale for using this type of process
  • the original call for tenders or call for proposals and all amendments
  • all of the bids or proposals received, including any supporting material submitted
  • any questions received during the process, and responses that were provided
  • detailed records of the evaluation process and evaluation notes
  • contract documents

8. Roles and responsibilities

8.1. ISC Headquarters

  • Establish and update the tendering policy and guidance on processes and procedures as required for effective and efficient implementation
  • Provide advice and assistance to ISC regional staff regarding this policy

8.2. ISC Regional Offices

  • Address First Nations' questions regarding the tendering policy and its application
  • Provide advice to First Nations, upon request, in the development of their own tendering policies regarding the contents related to capital projects
  • Review First Nations' own tendering policies to ensure that they comply with the minimum requirements established in this departmental policy
  • Review and approve business plans for construction management projects as explained in section 7.3.3. and outlined in Appendix 2, and support project owners in evaluating fair market value for their own forces works
  • Provide technical support to project owners to manage projects in accordance with the tendering policy

8.3. First Nations as project owners

  • Develop tendering policies that comply with the minimum requirements established in this policy, or apply this policy to capital projects
  • Manage projects in accordance with either their own tendering policies or this policy
  • Develop business plans for the projects using construction management as explained in section 7.3.3

9. Enquiries

Matters related to the interpretation of this policy are to be referred to the Director, Infrastructure Policy Modernization and Change Management Directorate, Community Infrastructure Branch, at ISC Headquarters at appel-doffres_tendering@sac-isc.gc.ca.

Questions regarding implementation of this policy are to be directed to the appropriate ISC regional office.

For questions regarding applicable legal requirements and industry best practices, the project owner is to consult their own legal counsel.

10. References

Appendix 1: Guidelines for the Development of First Nations' Own Tendering Policies

Helps First Nations create their own tendering policies.

Appendix 2: Developing and Evaluating Business Plans

Helps First Nations prepare business plans for construction management projects using own forces works, and explains how ISC Regional Offices review these plans.

Appendix 3: Thresholds for Professional Services and Construction

Lists the threshold values for each First Nation community to determine which process will be used for soliciting proposals and bids for professional services and construction contracts.

Appendix 4: Best Practices to Support the Implementation of the Tendering Policy

Provides an overview of industry best practices for soliciting bids and proposals for construction, professional services, and non-professional services, and awarding contracts, to support the implementation of this policy.

Appendix 5: Additional Guidance on Evaluating Bids and Proposals

Provides additional guidance to help First Nations create their own rules and methods for evaluating bids and proposals.

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