Contracts by Mutual Agreement in Québec: What to Know in 2026

When a municipality needs a fence in a park repaired for $18,000, it doesn't publish a call for tenders on SEAO. It calls a contractor it knows, negotiates a price, and signs the contract. That's a contract by mutual agreement.

And there are thousands of them every year, often of better quality than you'd imagine.

The thresholds: when is mutual agreement allowed?

That's the key question. The answer depends on the type of body.

For municipalities:

Since April 1, 2026, municipal contracts fall under the new Act respecting contracting by municipal bodies (LCOM). The $139,000 threshold itself has been in effect since January 1, 2026.

At $139,000 and up: a public call for tenders is mandatory, published on SEAO. No mutual agreement possible (except for legal exceptions).

From $25,000 and under $139,000: the rule is written invitation to at least two businesses (sections 30 and 80 of the LCOM). It isn't an option, it's the default mode. The municipality can depart from it if its contract management by-law provides for it (section 9). Mutual agreement is also allowed in the exceptional cases of section 33 of the LCOM and its implementing regulation (urgency, sole supplier, or services reserved to lawyers and notaries below the threshold, notably). So never assume mutual agreement under $139,000: read the contract management by-law of the body in question, it's public.

Below $25,000: the LCOM imposes no award procedure. But every contract management by-law must include measures that also cover these contracts, notably to favour Québec or Canadian goods, services and businesses (section 8), and it can add its own rules (section 9).

For provincial bodies (departments, health, education):

At the provincial level, the mechanics differ: below the public tender threshold, the body can proceed by public call for tenders, by invitation or by mutual agreement, within the framework of sections 14 and 14.3 of the LCOP. The law sets no $25,000 tier there. The threshold is $139,000 for the services and construction contracts of departments, agencies and the networks. Watch out: for supply contracts, the threshold drops to $34,700, but only for government departments and agencies. The health and education networks buy their goods under the $139,000 threshold, like municipalities. That nuance decides whether your $40,000 sale goes through SEAO or over the phone.

One caveat, if you sell goods to the health network: when the purchase goes through the Centre d'acquisitions gouvernementales as part of a group purchase, it's no longer the establishment's threshold that applies, but the lowest threshold among the bodies in the group. A group purchase that includes a department can therefore fall under the $34,700 threshold. The tier-by-tier detail is in our article on public tender thresholds.

Why SMEs should care about mutual agreement

A contract by mutual agreement isn't a consolation prize. It's often the best way into public procurement.

The advantages are concrete. No formal bidding process: you don't have to write a technical offer, fill out a bid form, or obtain a bond. The decision cycle is shorter, weeks rather than months. And above all, the "3 similar contracts in the last 5 years" requirement that blocks so many SMEs on public calls for tenders isn't formally required for mutual agreement. The body chooses according to its own criteria.

The volume is significant. Of the 160,508 contracts awarded from 2021 to 2023 and published on SEAO (one contract per award process, data as of August 7, 2026), 58.9% were awarded without a call for tenders or an invitation. Public bodies in Québec sign thousands of contracts by mutual agreement every year for maintenance services, consulting, supplies, minor works.

(And honestly, this is the path experienced SMEs took. They didn't start with a $500,000 call for tenders. They first landed a small contract by mutual agreement, delivered it flawlessly, and used that reference to bid on bigger contracts.)

How to land a contract by mutual agreement

Here's the paradox: as a general rule, a contract by mutual agreement isn't published on SEAO before it's awarded, except notably when a notice of intention (avis d'intention) is required. The body chooses a supplier it already knows. If you're not on its radar, you don't exist.

The question becomes: how do you get known?

Sign up for SEAO's Supplier Directory. It's the first reflex any SME that wants public contracts should have. Buyers use the Directory to look for suppliers when they're preparing a contract by mutual agreement or an invitation-only call for tenders. Fill out your listing with your UNSPSC codes, your delivery regions, and your certifications. That's what public buyers use to filter.

Identify the bodies in your region. Municipalities, school service centres, CISSS/CIUSSS, transit authorities. Each of these bodies signs contracts by mutual agreement regularly. Check the contracts awarded on SEAO to see who buys what in your sector.

Contact procurement managers directly. Mind the lobbying rules: a communication aimed at influencing the award of a contract other than through a public call for tenders can be a lobbying activity (section 2 of the Lobbying Transparency and Ethics Act, Loi sur la transparence et l'éthique en matière de lobbyisme). Check whether those rules apply to your approach before you contact a body. Introduce yourself, describe your services, leave your contact details. When the need comes up, your name will be in the pile. That's exactly what the AMP recommends: "businesses have an interest in making their products or services known to public bodies."

The exceptions: mutual agreement above the thresholds

In certain situations, a body can award a contract by mutual agreement even above the public tender threshold. These exceptions are set out in law (section 13 of the LCOP at the provincial level, section 33 of the LCOM and its regulation at the municipal level) and are strictly regulated.

Among them: an emergency situation where the safety of persons or property is at stake, a sole supplier, or a contract of a confidential nature. Information on the concluded contract is then published on SEAO under the applicable rules, subject notably to the confidentiality exceptions.

The sole-supplier exception requires a precise basis: a warranty, a property right or an exclusive right, such as a patent or an exclusive licence, or the artistic, heritage or museological value of the property or service. Rare expertise isn't enough. That leaves the public-interest ground: a body that considers it can show a call for tenders would not serve the public interest can contract by mutual agreement, but it must then, barring an exception provided by law, publish on SEAO a notice of intention (avis d'intention) at least 15 days before the planned contract date, and any business can express its interest in it (sections 13 and 13.1 of the LCOP, 33 and 34 of the LCOM).

Your next step

If your SME has never bid on a public contract, don't start with a call for tenders. Start with mutual agreement: sign up for SEAO's Supplier Directory, identify 3-5 public bodies in your region that buy your services, and reach out. A first $15,000 contract by mutual agreement, well delivered, is worth more than a losing $200,000 bid.

Sources

Act respecting contracting by public bodies (LCOP, CQLR, c. C-65.1); Act respecting contracting by municipal bodies (LCOM, CQLR, c. C-65.01, in force April 1, 2026) and its regulation on awarding certain contracts by written invitation or mutual agreement (CQLR, c. C-65.01, r. 1); Lobbying Transparency and Ethics Act (CQLR, c. T-11.011); quebec.ca, solicitation methods for municipal contracts; Autorité des marchés publics (AMP); Secrétariat du Conseil du trésor, trade-liberalization agreement thresholds (January 1, 2026).