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 thresholds themselves have 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, but only if its contract management by-law provides for it (section 9): that's where, and only where, the possibility of mutual agreement in this range comes from. 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: mutual agreement without a formal procedure in most cases. Some municipalities may have rules in their RGC even under this threshold, but in practice, this is the zone of contractual freedom.

For provincial bodies (departments, health, education):

The logic is the same, with an identical threshold of $139,000 for services and construction contracts. 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. Our analysis of 158,349 public contracts shows that 58.3% of contracts are awarded without a call for tenders, which is the bulk of the number of public contracts. Public bodies in Québec sign thousands of contracts by mutual agreement every year for maintenance services, consulting, supplies, minor works. These are contracts of $5,000 to $130,000, right in the comfort zone of SMEs with 5 to 50 employees.

(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: a contract by mutual agreement isn't published on SEAO before it's awarded. 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 free, and 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. If your SME has never won a public contract, the Directory flags you specifically so bodies will consider you. 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. This isn't lobbying, it's normal business development. 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.

The most common: an emergency situation where the safety of persons or property is at stake, a sole supplier due to a warranty or a property right, or a contract of a confidential nature. The body has to justify the exception and publish it on SEAO.

If you're the only supplier able to deliver a specific service in your region, a technical niche, a rare expertise, that's a legitimate lever. But the presumption that there's no competition has to be validated, often through the publication of a notice of intention on SEAO that gives other suppliers a chance to come forward.

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); quebec.ca, solicitation methods for municipal contracts; Autorité des marchés publics (AMP); Secrétariat du Conseil du trésor, 2026 thresholds.