October 20, 2026

How the Construction Tender Process Works for Ontario Owners

The construction tender process is how an owner turns a finished design into a signed contract at a competitive price. In Ontario it runs in eight steps:

1. Choose the route: open tender, invited tender, request for proposal (RFP) or a negotiated price.
2. Prequalify the bidders, usually with the CCDC 11 qualification statement.
3. Build the tender package: drawings, specifications, instructions to bidders, a bid form and the contract you intend to sign.
4. Issue it with a bid period, a site visit and a question deadline.
5. Answer questions by addendum, so every bidder prices the same building.
6. Close and open the bids at a fixed time, with bid security attached.
7. Level the bids so you’re comparing like with like.
8. Award, sign and debrief the bidders who didn’t win.

Canadian tender law adds something most guides miss. Since a 1981 Supreme Court decision, a formal tender creates a contract with every bidder the moment their bid comes in, and the rules you write into the tender documents bind you as well as them. So the most useful work in a tender happens before it’s issued.

This guide is for Ontario owners and developers near the end of design. It isn’t legal advice: a public body, or anyone running a large tender, should have a construction lawyer review the instructions to bidders.

Tender, RFP or negotiate?

Tendering fits best when the design is finished and the scope is clear. Settle which route you’re on first, because each asks something different of you and of the market.

Three points the table can’t hold:

• An RFP can still be a tender in law. If it fixes the terms, makes proposals irrevocable and promises to pick by stated criteria, a court may treat it as a formal tender. The Supreme Court did exactly that in 2010, as covered below.
• A negotiated price loses the competing number, so you need another check on value: an independent estimate, open-book trade pricing, or both. Our guide to how a cost-plus contract works covers those controls.
• Construction management still tenders, later and in pieces. The construction manager is chosen on fee and qualifications, then tenders each trade package as its design is ready. The forms are compared in CCDC 5A vs 5B, and the wider choice in design-build vs design-bid-build.

The rest of this guide follows a conventional tender for a stipulated price, which in Ontario is usually signed on CCDC 2 – 2020 with supplementary conditions.

The law of tendering in Canada, in plain English

Three Supreme Court of Canada decisions set the rules. Here’s what they mean for the choices you’ll make after bids close.

Contract A and Contract B (Ron Engineering, 1981)

In R. v. Ron Engineering (1981), a contractor found a calculation error after close, tried to withdraw its bid and asked for its deposit back. The Court held that submitting a compliant bid to a formal call for tenders created a contract, now called Contract A, whose terms are the tender documents. Those terms said the bid couldn’t be withdrawn, so the owner kept the deposit. Contract B is the construction contract signed with the winner. Alexander Holburn’s summary of the procurement case law describes Contract A as arising on submission of a compliant bid and irrevocable.

So every bidder holds a contract with you from the moment of close, and you owe each of them what your documents promised.

The privilege clause and compliant bids (M.J.B. Enterprises, 1999)

Most tenders include a privilege clause: “the lowest or any bid will not necessarily be accepted.” In M.J.B. Enterprises v. Defence Construction (1999), the owner relied on that clause to award to a bidder whose bid didn’t comply with the tender terms. The Court held that the clause let the owner pass over the lowest bid, but it didn’t let the owner accept a non-compliant one. The Court implied a term into Contract A that only compliant bids could be accepted.

Two practical results:

• You’re not obliged to take the lowest bid, but your reason for passing it over has to come from the documents. Selecting on a criterion you didn’t disclose is a breach.
• You can’t accept a bid that fails a material requirement of your own tender, even if it’s the one you’d prefer.

Exclusion clauses and fair process (Tercon, 2010)

In Tercon Contractors v. British Columbia (2010), the Province ran an RFP limited to six eligible bidders and awarded the contract to one that had in substance teamed with an ineligible firm. The RFP said no proponent could claim “compensation of any kind whatsoever, as a result of participating in this RFP.” A 5–4 majority held that the clause didn’t cover a contest the Province had opened to an ineligible bidder, and restored a damages award of over $3 million. Dentons’ case note quotes the majority: “Clear language is needed to exclude liability for breach of such a fundamental element of the process.”

So a broad disclaimer in your instructions to bidders won’t rescue a process that didn’t follow its own rules. Singleton Urquhart’s advice to owners on deficient bids (2023) recommends including a privilege clause but relying on it only as a last resort.

Can you negotiate after the bids close?

It depends on what your documents said. Using one bidder’s price to pull a better number out of another (bid shopping) breaches the duty to treat bidders fairly; Singleton Urquhart cites Stanco Projects v. British Columbia, where the owner told the low bidder it would get the work, then sought prices from the others and pressed the low bidder to come down. Negotiating scope with the lowest compliant bidder is more defensible when the tender documents reserved that right in advance.

• Say it in the instructions to bidders if you might need to negotiate scope to fit the budget.
• Don’t take one bidder’s number to another, even informally. It also costs you trust with the builders you’ll want bidding next time.
• If every bid is over budget, use the negotiation process you described, or revise the documents and re-tender to everyone.

CCDC 23 has a section on post-bid negotiations and re-bidding for exactly this situation.

How to prequalify contractors

Prequalification decides who gets the drawings. Done well, it means any bid that comes back is from a builder you’d be comfortable hiring, so you can award on price without second-guessing. The Royal Architectural Institute of Canada’s Handbook of Practice makes the same point: once prequalified, bidders should generally be equal in competence.

CCDC 11 and CCDC 29

The industry-standard form is CCDC 11 – 2019, the Contractor’s Qualification Statement. It gives every contractor the same format for:

• Company information: legal structure, financial reference, bonding (contract security) reference, insurance reference, health and safety, and the value of work projected for the current year against the actual value for the past four years.
• Key personnel: the office and site people proposed for your project.
• Project experience: five relevant projects in each of three lists: key projects completed in the past five years, comparable projects completed, and key projects underway.

CCDC publishes a companion, CCDC 29 – 2016, the Guide to Pre-Qualification, which compares unlimited (open) prequalification, short-listing and source lists, and covers a request for qualifications from submissions through interviews to debriefing.

What to ask for, beyond the form

• A bonding letter from the contractor’s surety confirming capacity for a project your size.
• The proposed superintendent and project manager by name, with their recent projects. They’re the people who’ll run your job day to day.
• Owner references on two or three comparable projects.
• Safety record and a current WSIB clearance certificate.
• Union affiliation, where your site or sector is bound by collective agreements.

Write your criteria down before you open the submissions and score every firm against the same list. That record lets you shortlist without accusations of favouritism.

How many bidders to invite

Ontario’s Broader Public Sector Procurement Directive recommends that public bodies invite at least three suppliers for smaller invitational procurements. On private work, three to five prequalified bidders is a common short list. Fewer gives you a thin comparison; many more and good contractors decline, because pricing a full set of drawings is expensive for them.

Building the tender package

The quality of a tender is mostly set by the documents. Clear, coordinated documents produce prices that sit close together. Gaps and conflicts produce allowances, qualifications and exclusions, which are a bidder’s honest way of saying “this isn’t clear enough to price.” That’s why we spend most of a tender’s effort before issue; the real cost of skipping preconstruction explains what that early work buys.

CCDC’s CCDC 23 – 2018, A Guide to Calling Bids and Awarding Contracts is the industry reference here, with the CCDC Master Specification for Division 00 as its companion. A complete package holds the following.

Drawings, specifications and site reports

The full issued-for-tender set, plus what bidders need to price the site: the geotechnical report, the survey, and for a renovation, the designated substances survey. Ontario owners must have materials likely to be disturbed examined for asbestos before tendering alteration work, as our guide to reading a construction estimate notes. A bidder left guessing will carry an allowance.

Instructions to bidders

This is the rulebook for Contract A, so it’s the document to have a lawyer read. It should state:

• the closing time and place (or portal), and that late bids are returned unopened;
• what makes a bid compliant, and which defects you may waive as minor;
• the bid security and agreement to bond required;
• how long bids stay open for acceptance, and whether they can be modified before close;
• the selection criteria, and whether you may negotiate with the lowest compliant bidder;
• the question deadline and how answers are issued;
• a privilege clause written to fit the process you’ll actually run.

The bid form

The bid form controls what you get back. Ask every bidder for the same breakdown:

• Stipulated price, HST shown separately.
• Separate prices for scope you might add or drop, so you can adjust the award without negotiating.
• Alternates, each defined in the specification, as an add or deduct.
• Unit prices for quantities that can’t be fixed in advance, such as rock or contaminated soil. They price future changes.
• Major subcontractors and suppliers, named.
• Acknowledgment of every addendum by number.

The contract, schedule and site visit

Include the full contract form, usually CCDC 2 – 2020, with your supplementary conditions, so every bidder prices the same risk. Change markups, insurance, liquidated damages and closeout documents all go into a price, so settle them before issue. Our article on how change orders work covers the change terms. Give the completion date, phasing and site restrictions (working hours, an occupied building), and set a site visit early in the bid period.

Bid security

Bid security gives you a remedy if the winning bidder won’t sign, which is the mechanism behind the deposit in Ron Engineering. The standard Canadian forms are the CCDC 220, 221 and 222 – 2024 bond forms.

The RAIC Handbook says bid bonds are “usually between 5% and 10% of the estimated construction cost,” lower on very large projects. The federal standard bid bond uses 10% of the bid, capped at $2,000,000. Ask for the agreement to bond as well: the Handbook notes that a bid bond doesn’t ensure the surety will issue the performance bond once the bid is accepted.

Running the tender period

Questions and addenda

Allow the trades time to price, since the general contractors depend on their numbers; a rushed bid period produces wider spreads and more qualifications. All questions go to one person, in writing. Every answer that changes or clarifies the documents goes to every bidder as a numbered addendum, never as a phone call to one firm. The RAIC Handbook recommends issuing the last addendum no later than four working days before close, and extending the bid period if a late change can’t be avoided.

Bid depositories

A bid depository is run by a local construction association. It collects trade bids, usually mechanical and electrical, before the general contractors close, and passes them on under set rules. In Naylor Group v. Ellis-Don (2001), a dispute out of the Toronto Bid Depository, the Supreme Court held that a general contractor that carried a trade’s depository bid had formed a Contract A with that trade and had to subcontract to it, absent a reasonable objection.

Their use in Ontario has declined. The Daily Commercial News reported in April 2008 that the Construction Bid Depository of Ontario was closing. Its chairman said industry support had been withdrawn over time; a trade contractors’ group pointed to design-build and P3s. If your trades or your funder expect depository closing, confirm with the local construction association that one operates for your area and trades, and write its closing time into the instructions to bidders. On most private projects the general contractor collects trade prices directly, and naming major subcontractors on the bid form gives you similar visibility.

Closing and opening

Hold to the published closing time to the minute and time-stamp bids on receipt. At opening, the Handbook advises reading out only the bidder’s name, the base bid and whether security is attached. Check each bid for compliance before you study the numbers: signed, security attached, addenda acknowledged, bid form complete.

Bid levelling: comparing bids

Bids rarely arrive in a form you can compare directly. Levelling is the work of adjusting each one to the same scope so the totals mean the same thing. It’s the core of what we do at award, and our guide to reading a construction estimate has a fuller checklist for comparing two numbers.

What a levelling sheet looks like

Lay the bids side by side, one column per bidder, and work down these rows:

Every adjustment needs a source: the bidder’s written clarification, your consultant’s pricing, or your pre-tender estimate. The aim is to see what each bid includes; every price stays as the bidder submitted it.

Clarifications without bid shopping

You can ask a bidder to confirm what’s in its price. You can’t let it change the price, or show anyone another bidder’s figures. Ask the same question, in writing, of every bidder it affects. Singleton Urquhart advises limiting corrections to immaterial issues, and where a material issue is opened for correction, giving every bidder the same opportunity on the same timeline.

When the low bid is far below the rest

It may reflect a better approach or a misread drawing, and you want to know which before you sign. Ask the bidder to walk you through it by trade, in writing, and record what it confirms.

When every bid is over budget

Compare the levelled bids with your pre-tender estimate trade by trade. If the bids agree with each other and not the estimate, the market has moved or the estimate missed something; if they’re scattered, the documents are probably unclear. The fixes are separate prices you can drop, a negotiation you reserved the right to hold, or a revised re-tender. Our article on how much contingency is enough covers what to carry once you’ve awarded.

Awarding the contract

Selecting and notifying

Award to the bidder whose compliant bid best meets the criteria in your documents, which for most tenders is the lowest levelled price. Record the levelling, compliance checks and reason in a short award recommendation. Issue the notice of award within the bid acceptance period, and have the contract signed, bonds delivered and insurance certificates in hand before work starts.

The Construction Act and the contract you’re signing

Ontario’s Construction Act sets the payment rules for the contract you’re about to sign, whatever the form says. The main ones for an owner:

• Proper invoices are monthly unless the contract says otherwise (s. 6.3(1)). You can’t make the giving of an invoice conditional on prior certification, though certification after the invoice is allowed (s. 6.3(2)–(3)).
• Pay within 28 days of a proper invoice (s. 6.4(1)), or give a notice of non-payment within 14 days for the amounts you dispute (s. 6.4(2)).
• Since January 1, 2026, an invoice missing information is deemed proper unless you give notice within 7 days (s. 6.1(2)), and you can require any other information your accounts payable system reasonably needs (s. 6.1(1) para 6.1). Define a proper invoice in the contract, so the requirement is agreed before the first draw.
• Retain 10% holdback (s. 22(1)), and since 2026, release it annually on each contract anniversary under s. 26(4).

Our guide to construction liens and holdback in Ontario walks through the payment and holdback calendar in detail.

Debriefing the bidders who didn’t win

Tell every bidder the result promptly and offer a debrief: where its bid stood and why it didn’t win, without disclosing other bidders’ detail. Public bodies covered by the BPS Directive must offer one on larger procurements. Private owners benefit too, because a good debrief is how a contractor decides whether to bid for you next time.

If you’re a public body

If you’re a hospital, school board, university, college or other broader public sector organization, provincial rules sit on top of everything above.

• The Broader Public Sector Procurement Directive (effective April 13, 2026) covers construction. It requires an open competitive process for goods, non-consulting services and construction valued at $139,000 or more, recommends an invitational process with at least three suppliers from $10,000 up to that threshold, and bars splitting a procurement to stay under it. On procurements of $139,000 or more, unsuccessful suppliers must be told they’re entitled to a debriefing, and have 60 calendar days from the award notice to ask for one. The documents must also set out a bid dispute procedure.
• Buy Ontario. The Directive notes that the Building Ontario Businesses Initiative rules and the Procurement Restriction Policy have moved to the Buy Ontario Procurement Directive. Blakes’ guide to the Buy Ontario directives (April 2026) says capital infrastructure requirements apply regardless of value, including a domestic supply chain plan from bidders, with municipal requirements in force from May 15, 2026.

Municipalities have their own purchasing bylaws as well. A public body’s tender documents should be drafted or reviewed by procurement counsel.

Frequently asked questions

What are the stages of the tender process?

Most guides list seven or eight. In order: choose the procurement route, prequalify bidders, prepare the tender package, issue it, manage questions and addenda, close and open the bids, evaluate and level them, then award, sign and debrief. In Canada, a formal tender creates a binding Contract A with each bidder at close, so the rules you set in the package govern every later stage.

How many bids should I get?

Enough to give you a real comparison, but not so many that the good contractors decline to bid. Ontario’s public-sector directive recommends at least three invited suppliers on smaller invitational procurements. On private work, three to five prequalified bidders is a common short list. Prequalifying first matters more than the count, since a bid from a firm you wouldn’t hire isn’t a useful comparison.

Can I negotiate with the lowest bidder?

Only if your tender documents said you might. Negotiating scope with the lowest compliant bidder is more defensible when the instructions to bidders reserved that right in advance. Using one bidder’s price to get a better number from another is bid shopping, which courts have found breaches the duty to treat bidders fairly. If all bids are over budget and you reserved no right to negotiate, revise the documents and re-tender.

What’s the difference between a tender and an RFP?

A tender asks for a price on a fully defined scope and is usually decided on the lowest compliant bid. An RFP asks for a proposal covering price, team, approach and schedule, scored against published criteria. The label doesn’t settle the legal effect: the Supreme Court held in Tercon (2010) that a provincial RFP created a Contract A, so fair-process duties applied.

Do I have to accept the lowest bid?

No. A privilege clause lets you pass over the lowest bid, as the Supreme Court confirmed in M.J.B. Enterprises (1999). You must choose a compliant bid, though, and your reason for passing over the lowest has to come from the criteria in your documents. You can’t rely on an undisclosed preference.

Where to start

If you’re near the end of design and a tender is coming up, the most valuable hours are the ones before it goes out: settling the route, the short list, the supplementary conditions and a bid form that asks for what you’ll need to compare. Those decisions shape the prices you get back.

That work, through bid levelling and award, is our owner-side preconstruction and tendering service. Our experience was built at PCL Constructors and Oxford Properties, on projects tendered as stipulated price contracts and as construction management trade packages, so it covers the bidder’s side of a tender as well as the owner’s. If you’d like a second set of eyes on your instructions to bidders, or help levelling the bids you’ve just received, talk to us about your tender.