Gré à gré contracts stop just under the threshold
Quebec's gré à gré contracts pile up just under the public-tender threshold, and the wall moves each time the law changes the threshold.
By Philippe Dallaire, founder ·
In Quebec, a public body buying below a certain amount may award the contract by gré à gré, to the firm of its choice. From that amount up, the public-tender threshold, it must publish a call for tenders and let every firm bid. The rule is well known. Its effect on the size of contracts is less so.
A wall, not a slope
If the threshold did not matter, the number of gré à gré contracts would thin out gently as amounts rise. That is not what the contracts published in SEAO show. Provincial bodies award 4.5 times as many gré à gré contracts just under the threshold as just above it. Municipal bodies, 3.3 times as many. At a round amount with no legal meaning, the same ratio is only 1.2.
- Gré à gré contracts just under the threshold
- Gré à gré contracts, elsewhere
- Smooth trend with no threshold effect
The wall follows the law
The threshold moves every two years, and the wall moves with it. The clearest case is 2022: provincial bodies adopted the new threshold in January, municipal bodies only in October. For those nine months, the first group's wall already stood at the new amount and the second's still at the old one. A habit of rounding prices would not do that. A rule would.
Above the threshold, an exception
A gré à gré contract above the threshold must rest on an exception the law provides, and SEAO publishes the ground cited. Just above the threshold, 16% of gré à gré contracts cite that only one contractor is possible, against 0.7% just below. Bodies apply the rule: that is exactly what makes it visible in the data.
What this finding does not say
A gré à gré contract awarded below the threshold is lawful. This finding describes the rule's effect on the market as a whole; it says nothing about the reasons behind any one contract or any one body. The method, the periods that cannot be settled and the data are in the full review.
For a bidder
Contracts just under the threshold never go through a public call. Winning them means being known to the body before it awards: many keep a supplier list for these contracts, often with rotation, and being on it is how a firm gets invited.