A First Nation tendering a housing or community building project sets its own rules first: its tendering policy, its funding agreement and the contract form it chooses. For community buildings funded through ISC's Capital Facilities and Maintenance Program, ISC's tendering policy (in force since April 1, 2026) sets minimum competition, bonding and record-keeping rules; housing projects are outside that policy, so the Nation's own policy and its CMHC or other funding terms govern. Either way, a clear request for proposals, published evaluation criteria and a standard contract do most of the work.
This guide walks through what a housing manager or band council technical lead needs to decide before going to market for a modular or site-built project: which rules apply, how much competition the value requires, what to put in the request, how to score bids, which contract to sign and how to hold back money until the work is done. It is general information, not legal advice. Confirm the requirements that apply to your project with your ISC regional office, CMHC and your own legal counsel.
Which tendering rules apply to your project?
Start with your funding. ISC's Policy on tendering for First Nations' federally funded capital projects states that it "applies to capital projects funded in whole or in part by ISC through the CFMP and FNIF authorities" and that it "takes effect on April 1, 2026, and replaces all previous versions."
Two exclusions matter for housing managers. The policy says it "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." So a youth centre, band office or school addition funded through CFMP falls under the policy; a subdivision of homes does not.
The policy also recognizes that "First Nations are the owners of capital projects on reserve" and that they "are encouraged to develop and implement their own policies." Under ISC's guidelines for First Nations' own tendering policies, once a Nation's policy meets the minimum requirements and the ISC regional office confirms it, "the First Nation's policy will take precedence over ISC's tendering policy." If your Nation does not yet have a written policy, a housing project is a good reason to adopt one, because nothing else may govern how that contract is awarded. The same guidelines recommend that "First Nations consult their legal counsel" on their tendering policies.
For which programs pay for what, see our separate guide to funding modular buildings for First Nations. This post covers the procurement steps once the money is identified.
How much competition does the contract value require?
ISC's policy recognizes three methods. An open process is publicly advertised. In an invited process, "project owners must invite at least 2 prospective contractors, businesses or consultants." A non-competitive (sole-source) award is allowed only in limited cases, such as when "there is a pressing emergency", when soliciting bids "would not be in the public interest", or when "only 1 contractor, consultant or business is capable of fulfilling the project."
- Professional services (architects, engineers, project managers): "If the estimated contract cost is equal to or greater than $650,000: an open competitive process is required." Between $150,000 and $650,000, open or invited; at $150,000 or less, any method, with the reason for a non-competitive award documented.
- Construction: thresholds are set for each First Nation in Appendix 3. ISC built a national baseline, then "The baseline was then adjusted using Statistics Canada's remoteness index and ISC's Cost Adjustment Factor" for each Nation. "An open competitive process is required if the estimated contract cost is equal to or greater than the threshold." Between 25% of the threshold and the threshold, open or invited; at or below 25%, any method.
- Two thresholds per Nation: Appendix 3 lists one threshold for design-bid-build and design-build contracts, and a second, lower one applied to each contract under construction management.
Even when a housing project is outside ISC's policy, these numbers are a reasonable benchmark for your own policy. Where a remote community expects only a few qualified bidders, an invited process with a documented list of who was asked can be fairer and faster than an open call that draws no responses.
What should a request for proposals for a factory-built home or building include?
ISC's best-practice appendix says "Generally, the tender package should follow the outlines of the CCDC Master Specification for Division 00 and Division 01" and that the instructions to bidders should cover "site visits and pre-bid meetings." For a modular or site-built project, bidders price risk they cannot see, so the more site information you give them, the tighter the prices you get back. A practical checklist:
- Scope: number of units, floor plans or performance requirements (bedrooms, accessibility, mechanical systems), and what is in and out: foundations, utility connections, decks, landscaping, appliances.
- Site conditions: lot plans, any geotechnical report, known soil or drainage issues and the status of water, sewer and power to each lot. CMHC's Section 95 Project Delivery Guide asks "Is a geotechnical report available for the project site(s)?" and "Is the site fully serviced? (access, electrical, water, sewage)" Answer the same questions in your request. See our lot servicing guide for the servicing side.
- Access and delivery: road restrictions, bridge limits, crane access and, for ice-road communities, the expected winter road window. Ask bidders to say how and when they will deliver. Our winter road planning calendar covers the timing.
- Codes and certification: the building code edition you expect the work to meet, and for factory-built units, how the factory's compliance will be shown. Our CSA A277 guide explains what the label covers.
- Schedule: when the site will be ready, required delivery dates, and any penalties or incentives.
- Warranty: length and scope, who carries out warranty work in the community, and response times.
- Insurance and documents for your lender or funder: if CMHC is financing Section 95 units built off-site, its guide lists an "Executed contract between the First Nation and the RTM builder", "Confirmation and pictures of construction progress from the manufacturer" and "Confirmation of 'in-transit' Insurance from the facility to the site" for advances. Write those obligations into the request so the builder prices them.
Which delivery method and contract form should you use?
ISC's policy describes design-bid-build, design-build, construction management and integrated project delivery. For design-build, "Project owners often use a call for proposals process to solicit proposals from design-builders." Factory-built housing often fits design-build, because the manufacturer's standard plans and engineering are part of what you are buying.
The Canadian Construction Documents Committee publishes the standard contracts most Canadian owners use. Its contract forms list includes CCDC 14, a "Standard traditional design-build prime contract between Owner and Design-Builder", and CCDC 5A and 5B for construction management. ISC's policy names these too: "The CCDC 5A contract supports this method of delivery," and likewise CCDC 5B, with CCDC 30 for integrated project delivery. For a fixed-price tender on a completed design, CCDC 2, the Stipulated Price Contract, is another option; its table of contents shows parts on payment, changes, insurance, "Ready-for-Takeover" and "GC 12.3 Warranty."
For running the call itself, CCDC 23 is a guide that addresses "all aspects of the bid calling and contract award process," including bidding periods, site visits, addenda and bid opening. Using a standard form rather than a custom contract saves legal cost and lets bidders price faster because they already know the terms. Have your lawyer prepare supplementary conditions for anything specific to your community or funding.
How should you evaluate bids and proposals?
ISC requires that a call state the evaluation method up front, "including which criteria are mandatory and which are point rated", and that "Price must be evaluated for all compliant bids and proposals." Its evaluation appendix describes the usual sequence:
- Mandatory criteria, pass or fail. "Only those proponents who receive a 'Pass' for each of the mandatory requirements listed above would be considered." Typical mandatories are licensing, insurance and Workers' Compensation Board clearance.
- Point-rated criteria. Examples include project experience, team expertise, approach and methodology, schedule, local content, and health and safety. State the weights and the reason for them in the call.
- Price. In the comparative approach, "The compliant proposal with the lowest price will receive the maximum amount of points."
- Selection. ISC lists five methods, from "the highest combined rating of technical evaluation criteria and price" (Methodology A) to the lowest compliant price (Methodology D) and the best technical score within budget (Methodology E). Under A and B, "the weight assigned to the price evaluation must be significant enough to have an impact on the final score."
Process discipline protects the Nation if a bidder complains. ISC's policy says "All bids and proposals must be opened in the presence of at least three individuals." Its best practices add that "Each evaluator must sign a declaration confirming that they are not in a conflict of interest", that "Addenda must be used to ensure that all bidders receive written notice of changes", and that "Late bids should be date and time stamped and returned unopened to the bidder." Where only one bid arrives, it can generally be accepted if it is compliant and within the approved budget, "unless there is a reason to cancel the process." ISC also suggests "a standard privilege clause" so the owner is not obliged to accept any bid.
For factory-built proposals, consider rating the delivery plan (route, season, crane and set crew), the warranty service plan for your community, and references from similar remote projects. Compare like with like: confirm whether each price includes foundations, transport, set, utility connections and finishing work on site.
What bonds, holdbacks and security should you require?
Security protects the Nation if a contractor fails to finish. ISC's policy scales it to project size:
- $10 million or more: traditional security. "A bid bond/performance bond or a security deposit is typically 10% of the estimated contract value."
- $5 million to under $10 million: traditional security, or if it is unavailable, an alternative holdback that "must be at least 8% in addition to the industry standard 10% deficiency/builder's lien holdback."
- Under $5 million: "Bid security and contract security may be waived" if the bidder meets conditions including at least 3 years of relevant experience. If not waived, the policy sets an alternative holdback for mid-sized projects, and "For projects with a total estimated cost of less than $1,500,000, the project owner will determine the amount of holdback."
The policy also allows other forms, such as "a secured interest in real property that is eligible for securitization", and says "Alternative forms of security may also be considered by the project owner." Small and remote contractors sometimes cannot get bonding, so decide in advance what you will accept and say so in the call.
Separately from security, a holdback keeps part of each payment until the work is substantially complete. CCDC 2 deals with this in "GC 5.4 Substantial Performance of the Work and Payment of Holdback." Whether provincial lien or prompt-payment legislation applies to a project on reserve land is a legal question; ask your lawyer and set out the holdback rules in the contract itself.
What happens at award, and what records should you keep?
Before signing, ISC's policy says "project owners must confirm that the contract cost falls within their budget", including ISC contributions. Its best practices say "Letters of regret are used to notify the unsuccessful bidders that a contract has been awarded to another party," sent the same day as the award. Keep the full file: the call, addenda, bids, evaluation sheets, conflict declarations, the council or committee decision and the signed contract. For CFMP-funded projects, records "must be maintained for 7 years and made available to ISC upon request." Even for housing projects outside the policy, the same file answers questions from members, funders and auditors.
Where does a builder fit in?
A manufacturer can help you write a request bidders can price accurately: what site information matters, what a realistic delivery window looks like, and what to ask for in the warranty. Herauf Modular, a division of Herauf Enterprises, builds homes and community buildings as finished sections indoors in its Saskatchewan and BC plants, then delivers and sets them on site. Most builds are manufactured and delivered in about 16 weeks, with foundations, pads and services prepared on site at the same time, and every unit meets or exceeds CSA A277 and the National Building Code for climate zones 6 through 8. For St. Theresa Point First Nation, Herauf built through the off-season and delivered roughly 1,300 km north over the winter ice road. Herauf does not administer funding or run tenders on a community's behalf, but it will respond to your request for proposals like any other bidder. To talk about an upcoming project, contact Herauf; we reply within one business day.
This guide is general information, not legal or financial advice. Program rules change: confirm the details with the program, your Indigenous Services Canada regional office or CMHC before relying on them. Herauf does not administer any program or apply on a community's behalf.