Contract A / Contract B (the Ron Engineering doctrine)

In Canadian bidding law, Contract A is the process contract that forms when a compliant bid is submitted in response to a call for tenders; Contract B is the actual work contract that forms only when the owner accepts a bid. The framework comes from the Supreme Court of Canada's decision in The Queen (Ont.) v. Ron Engineering and Construction (Eastern) Ltd., [1981] 1 S.C.R. 111.

What it is

Ron Engineering involved a contractor whose deposit was forfeited after it submitted a bid in error to Ontario Hydro. The Supreme Court held that a call for tenders is an offer to all comers, and a compliant bid submitted in response creates Contract A between owner and bidder the moment the bid is received. The principal term of Contract A was described as the irrevocability of the bid, and its corollary is that the owner must deal fairly and equally with every bidder during the process. Contract B — the construction or supply agreement everyone associates with "winning" — comes into existence only on acceptance.

Why it matters for public procurement

Contract A is why bidders can sue owners before any award is made. If an owner accepts a non-compliant bid, misapplies its own evaluation criteria, or treats bidders unequally, the wrong is a breach of Contract A, and the usual remedy relates to the profit the bidder would have earned under Contract B. It is also why withdrawing a bid after closing, or the owner imposing material new terms during negotiations, are legally consequential acts rather than informal steps. The doctrine applies to private-sector tendering too, but it bites hardest in public procurement, where owners are constrained by trade agreements and their own published evaluation rules.

What it means for vendors

Treat your bid as a binding offer, not a trial balloon. Because Contract A forms on submission of a compliant bid, errors in your price or your compliance plan are locked in under the irrevocability term. Read the instructions to bidders for the offer validity period and any conditions under which the owner may forfeit bid security — those clauses are the contract's own version of Ron Engineering's deposit rule. And document the process: if the owner departs from the stated evaluation scheme, your challenge lives or dies on what the tender documents promised versus what was done.

Common questions

Does Contract A form even if the owner never plans to award?

Contract A forms with a compliant bid, but the owner's discretion not to award at all is generally preserved by the tender documents themselves — clauses reserving the right to reject all bids are read into Contract A. Breach claims arise when the owner violates terms it did include.

Is this the same as a bid challenge under the CFTA or at the CITT?

No. Contract A/Contract B is a court-law doctrine about formation and breach. Trade-agreement complaints and CITT challenges run on a separate statutory track with their own timelines and remedies. Many disappointed bidders pursue both.

Related definitions

Addendum · Bid deposit · BAFO · CITT bid challenge process