Bid day and submission

Every competitive bid ends in a few hours of intense work. Subcontractor quotes arrive until minutes before closing, packages are levelled and re-levelled, numbers change on the summary sheet, senior managers decide the final markup, forms are signed and the bid is delivered, physically or electronically, before the deadline. Then the results are read, sometimes publicly, and the low bidder learns whether it has won a contract or a problem. This lesson covers bid day itself, the formal requirements of a compliant bid, and the law that governs competitive tendering, which differs significantly between Canada and the United States.

Preparing for bid day

The best bid days are mostly prepared in advance. By the day before closing, the self-performed work, general conditions and allowances should be priced and reviewed; every major package should have a levelling sheet with plugs; the bid form, bid security and other required documents should be prepared and checked; and the team should know who does what on the day. The bid-day leader is usually the chief estimator or a senior manager who makes final decisions on carried numbers and markups. Others are assigned to receive and log quotes, level specific packages, maintain the summary sheet and prepare the submission.

The bid-day sequence

Most subcontractors submit their prices in the last hours before closing, partly to limit bid shopping and partly because their own suppliers are late. As quotes arrive, the package estimators update levelling sheets and the summary. A typical rule is to stop changing the summary at a fixed time, often 30 to 60 minutes before the deadline, except for single large adjustments that the bid-day leader approves. Late changes are usually made as adjustments on a separate sheet (for example, "mechanical: carried quote −$84,000") rather than by reworking the detailed estimate, and the final markup is applied to the adjusted total.

# Bid-day adjustments applied to the summary before final markup ($)
cost_of_work = 12_850_000            # from the summary at 11:00
adjustments = [("Mechanical: new low adjusted quote", -84_000),
               ("Electrical: lighting package excluded, plug added", +46_000),
               ("Roofing: quote missing addendum 3, adjusted", +12_500),
               ("Doors and hardware: lower supplier quote", -9_800)]
cost = cost_of_work + sum(a for _, a in adjustments)
for name, a in adjustments:
    print(f"{name:52s} {a:>+10,}")
markup = 1.04 * 1.035 * 1.014        # overhead, profit, bond and insurance
price = cost * markup
print(f"Adjusted cost of work {cost:,.0f}; price {price:,.0f}; "
      f"rounded bid {round(price, -3):,.0f}")

Mechanical: new low adjusted quote                      -84,000
Electrical: lighting package excluded, plug added       +46,000
Roofing: quote missing addendum 3, adjusted             +12,500
Doors and hardware: lower supplier quote                 -9,800
Adjusted cost of work 12,814,700; price 13,986,855; rounded bid 13,987,000

The final price is often rounded, and some firms adjust the last digits deliberately to avoid ties or to land just below a round number a competitor might choose. The bid-day leader also makes the final markup decision, informed by the competition (who picked up documents, who is known to be busy) and the risks discovered during the bid (Lesson 11). Every change is recorded, because a bid that wins will be examined closely afterward.

Bid security and other required documents

Most public owners and many private owners require bid security: a guarantee that the bidder will enter into the contract and provide the required performance security if its bid is accepted. In Canada, bid security usually takes the form of a bid bond from a surety, commonly 10 % of the bid price, or a certified cheque. Owners often also require an agreement to bond (also called a consent of surety), in which the surety confirms that it will provide performance and labour and material payment bonds, often each for 50 % of the contract price, if the bidder is awarded the contract.

Other common requirements include the signed bid form with prices for the base bid, alternates, separate prices and unit prices; acknowledgement of addenda; a list of subcontractors where required; statutory declarations or certificates (for example, of workers' compensation coverage, safety certification or non-collusion); and evidence of insurance. Missing any mandatory item can make a bid non-compliant.

The law of tendering

Canadian tender law is built on the decision of the Supreme Court of Canada in R. v. Ron Engineering & Construction (Eastern) Ltd. (1981). The Court held that a call for tenders can create a preliminary contract, called Contract A, between the owner and each compliant bidder when the bidder submits its tender. Contract A carries terms set by the tender documents, typically that the bid is irrevocable for a stated period and that the bid security can be kept if the bidder refuses to sign the main construction contract, Contract B. In Ron Engineering the contractor discovered an arithmetic error after closing and tried to withdraw; the Court held that it was bound by Contract A and forfeited its bid deposit.

Later decisions built on Contract A. In M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd. (1999), the Supreme Court held that Contract A usually includes an implied term that the owner will accept only compliant bids; a privilege clause ("the lowest or any tender will not necessarily be accepted") lets the owner reject bids, but not accept a non-compliant one. In Double N Earthmovers Ltd. v. Edmonton (City) (2007), the Court held that an owner is not generally required to investigate whether the winning bidder will actually comply with the tender requirements after it bids. In Tercon Contractors Ltd. v. British Columbia (2010), the Court refused to let an owner rely on an exclusion clause after it accepted a bid from an ineligible bidder.

The practical consequences for estimators are clear. A Canadian tender is usually irrevocable from closing for the stated period, so an error discovered after closing generally cannot be corrected, and withdrawal may forfeit the bid security. Qualified or conditional bids risk being non-compliant, so bidders should raise questions before the deadline instead of qualifying. Owners must treat bidders fairly and evaluate only according to the stated criteria. The Supreme Court has also held that Contract A does not arise in every competitive process: its existence depends on the terms of the tender documents.

Bid depositories

In some regions, subcontract bids for specified trades must be submitted through a bid depository operated by a construction association, such as the bid depository of the British Columbia Construction Association, or, in Quebec, the Bureau des soumissions déposées du Québec (BSDQ). Trade contractors file their bids with the depository by a closing time set before the general contractors' tender closing, often two hours earlier. General contractors receive the filed bids and must use depository bidders for those trades; rules typically make filed bids irrevocable, require the general contractor to award to the listed trade contractor, and restrict bid shopping. The owner's tender documents state whether a depository applies and which trades it covers.

CCDC 23, A Guide to Calling Bids and Awarding Construction Contracts (2018 edition), sets out recommended practices for owners and consultants calling bids in Canada, including fair processes, addenda timing, the handling of bid depositories and the evaluation of bids. Although it is a guide rather than law, many tender documents follow it.

Electronic submission

Many owners now accept or require bids through electronic platforms. Electronic bidding removes the courier race but brings its own risks: upload failures, platform time stamps that differ from office clocks, file size limits, digital signature requirements and the temptation to submit at the last second. A sensible rule is to upload a complete bid at least an hour before closing and then, if the platform allows it, revise the price later; most platforms accept the last submission before the deadline. A bid that arrives one second late is late, whether physical or electronic.

After the bid

Once bids are opened or results announced, the estimating team should compare its price with the others, identify where it differed if results are itemized, and record the information in the firm's bid history (Lesson 1). If the firm is low, it must confirm its own price immediately: review the summary for arithmetic errors, check that major packages were levelled correctly, and confirm key subcontractor numbers in writing. A low bidder that discovers a large error faces a hard choice between proceeding at a loss and seeking to withdraw under whatever rules apply. If the firm is not low, a polite debrief with the owner can reveal whether price, scope interpretation or other factors decided the result.

Payment terms to read before bidding

Payment law also affects the bid. Ontario's Construction Act introduced prompt payment and adjudication in 2019, the federal Federal Prompt Payment for Construction Work Act has applied to federal construction contracts since December 2023, and several other provinces have adopted or announced similar regimes. Prompt payment rules shorten the time between invoicing and payment, and holdback rules (typically 10 % retained until substantial performance) set how much of the contractor's money is tied up. Both change the financing cost that general conditions or overhead must carry, so the estimator should note the payment regime and holdback terms in the bid plan, and pass them on to subcontractors in the scope sheets.