Public calls for tenders: 7 problems with the lowest bidder in security contracts
Public calls for tenders are intended to ensure a transparent, fair and rigorous process for awarding contracts. On paper, the principle seems logical: contracting authorities publish their needs, companies submit bids for security contracts, and the contract is then awarded according to the rules set out in the tender documents. The problem in the private security industry arises when price becomes the main criterion, or sometimes the only criterion that truly determines the outcome.
In a service such as security, choosing only the lowest bidder can have significant consequences. A security guard is not just a budget line. Behind every billed hour, there is a minimum wage governed by decree, mandatory premiums, payroll taxes, vacation pay, contributions, insurance, uniforms, supervision, training, replacement staff, administrative management, invoicing, customer service and, in some mandates, patrol vehicles, specialized equipment and constant operational availability
To better understand the general framework for public contracts in Quebec, you can consult the Act respecting contracting by public bodies:
https://www.legisquebec.gouv.qc.ca/fr/document/lc/c-65.1
The lowest price may seem advantageous in the short term, but when it is too low to cover the real costs of a professional security service, it can weaken agencies, harm security guards, increase the risk of non-compliance and create major problems for the contracting authority itself.
1. The lowest bidder for security contracts can encourage unrealistic pricing
The first problem with the lowest bidder is that it can encourage agencies to submit prices that do not reflect the real cost of the service. In the private security industry, the base wage of a security guard is governed by decree and cannot be set freely by the employer. As of June 28, 2026, the minimum wage for a security guard is $20.60 per hour, to which various mandatory premiums may be added depending on the mandate, required training, work schedule and specific conditions of the position.
In addition to this wage, the employer must cover costs such as payroll taxes, vacation pay, applicable contributions, RRSP contributions when provided, payroll administration, insurance and management fees. In reality, a security guard can easily cost an agency at least $24 per hour before the agency has even paid for its fixed costs, supervision, vehicles, customer service, technological tools, uniforms, administrative team and normal profit margin.
To better understand the wages, premiums and obligations applicable to security guards, you can consult our full article on the salary of a security guard in Quebec in 2026:
https://www.charco.ca/carriere/salaire-agent-de-securite-quebec-2026/
When an agency submits a bid at $24 or $25 per hour for a mandate that requires professional guards, replacements, insurance, supervision, responsive customer service and a solid administrative structure, one very simple question must be asked: how can this agency truly deliver the requested service without cutting somewhere?
2. The lowest price does not always reflect the real quality of the service
A contracting authority may require many things in its tender documents for security contracts: experienced guards, a reliable agency, significant liability insurance, identified patrol vehicles, clean and professional uniforms, available customer service, replacements in case of absence, field supervision, clear reports, up-to-date training and a team capable of handling unexpected situations.
All of these requirements are legitimate. The problem arises when, despite these high expectations, the contract is awarded mainly based on the lowest price. There is then a gap between what the contracting authority wants to receive and what the price actually allows the agency to finance.
Quality in private security is not limited to the physical presence of a guard on site. It depends on everything surrounding the guard: supervision, mandate preparation, clarity of instructions, supervisor availability, replacement capacity, ongoing training, schedule management, report quality and communication with the client. These elements have a real cost.
When a price is too low, the agency may be tempted to reduce what is not immediately visible: less supervision, fewer follow-ups, less training, less margin to quickly replace an absent guard, less investment in management tools and less time dedicated to customer service. Yet these invisible elements are often precisely what makes the difference between a well-managed mandate and a problematic one.
3. The lowest bidder can harm security guards
Choosing the lowest bidder for security contracts does not only affect agencies. It also directly affects security guards. When an agency obtains a contract at a price that is too low, it may face financial pressure from the very beginning of the mandate. This pressure can result in unstable schedules, poor replacement management, payroll delays, lack of support, insufficient training or, in the worst cases, non-compliance with the obligations set out in the decree.
In an industry where many workers are immigrants or are looking to enter the job market quickly, some guards may be more vulnerable to poor practices. They do not always know their rights, do not always know which premiums must be paid and may accept conditions that do not comply with applicable rules simply because they want to work or because they fear losing their job.
A system that constantly rewards the lowest price can therefore create downward pressure on working conditions. Yet a guard who is well paid, well trained, well supervised and respected by their employer will generally be more stable, more professional, more motivated and more attentive in the field. Conversely, a guard who is poorly treated, poorly paid or poorly supported is more likely to leave their post, lack vigilance or fail to provide the expected level of service.
In a security service, the quality of human work is central. If the award model pushes agencies to reduce their costs as much as possible, it is often the guards who suffer the first consequences.
4. Prices that are too low weaken SMEs and serious agencies
Agencies that properly calculate their costs are often disadvantaged in a system based mainly on the lowest price. A company that complies with the decree, pays mandatory premiums, assumes its charges, invests in supervision, maintains its vehicles, trains its guards, offers structured customer service and wants to generate a reasonable profit margin cannot always compete with an agency that submits an unrealistic price.
This reality creates unhealthy pressure on the entire market. If 20 agencies bid on a mandate and only one obtains it with a price that is too low, the other agencies, even if they submitted a more realistic price, may be tempted to lower their prices in the next call for tenders in order to remain competitive. The problem then repeats itself mandate after mandate, until the market is dragged downward.
In the long term, this mechanism harms serious SMEs because it sometimes rewards companies that take the greatest financial risks rather than those that present the best balance between price, quality, stability and execution capacity. An agency that refuses to bid at a loss may lose contracts, while an agency that bids too low may win a mandate that it does not truly have the means to deliver properly.
The purpose of a business is also to make a profit. This is not a secondary detail, nor is it a sign of bad intentions. A profitable agency can invest in its employees, improve its services, meet its obligations, provide better stability and remain present for its clients over the long term. An agency that constantly operates with insufficient margins becomes fragile, and this fragility eventually affects everyone.
5. An agency that bids too low can put the contracting authority at risk
At first glance, choosing the lowest price may give the impression of protecting public funds. However, if the supplier selected for security contracts is unable to deliver the service properly, the indirect costs can become much greater than the initial savings.
An agency that obtains a three-year contract at a price that is too low may find itself in difficulty after a few months or after one year. It may lack personnel, accumulate administrative delays, reduce supervision, lose its best guards or, in some cases, cease operations before the end of the mandate. If the agency goes bankrupt or abandons the contract, the contracting authority must restart a process, manage a transition, find a temporary solution and ensure service continuity.
In security contracts, this instability can have significant consequences. It is not simply a delivery delay or a defective product. It involves the presence of guards in the field, the protection of premises, access control, incident prevention, equipment surveillance, public safety and the client’s peace of mind.
A price that is too low can therefore become an operational risk. The contracting authority may save a few dollars per hour at the outset, but later face quality, replacement, communication or continuity issues that cost much more to manage.
6. The lowest price does not always take into account the full reality of a security agency
A security agency does not only sell guard hours. It must maintain a complete structure in order to meet the client’s needs. This structure often includes an administrative team, customer service, a planning team, supervisors, managers, insurance, technological tools, vehicles, uniforms, training, internal procedures and availability outside normal business hours.
When a contracting authority compares only hourly rates, it may have the impression that two agencies are offering exactly the same service, when this is not necessarily the case. One agency may include real supervision, better availability, faster replacements, a stable team and better structured reports, while another may offer a lower price with much less support behind the guard.
In the security industry, this difference is major. The client does not always see everything happening in the background, but they feel it as soon as a problem occurs. When a guard is absent, when an incident must be documented, when an instruction changes at the last minute, when an event runs longer than expected, when a citizen complains or when a situation requires a quick response, the quality of the structure becomes essential.
The lowest price does not measure this capacity. It only measures the submitted cost. This is why an award process that does not sufficiently consider quality can lead to choices that seem economical, but are less solid in the field.
7. A qualitative method would better protect contracting authorities, agencies and guards
For security contracts, a qualitative method may be much more appropriate than a choice based solely on the lowest price. The goal is not to ignore cost, but to recognize that price must be analyzed alongside quality, execution capacity and supplier reliability.
A two-envelope method, for example, allows the quality of the proposal to be evaluated before the price is opened. Envelope A may contain selection criteria related to the agency’s experience, the guards’ experience, supervision, customer service, replacement capacity, company values, management procedures, insurance, training and understanding of the mandate. Bidders must then reach a minimum threshold, for example 70%, before Envelope B containing the price is opened.
This type of method helps prevent an agency from being chosen solely because it submitted the lowest price, even if its structure, experience or replacement capacity are insufficient. Price remains important, but it is considered in relation to the real quality of the offer.
In some quality-price calculation models, the score can be used to adjust the submitted price according to a formula, for example with a calculation such as: interim score plus 50, multiplied by 10,000, then divided by the submitted price. The idea behind this type of formula is simple: an agency that offers better quality can be better recognized in the analysis, rather than being automatically disadvantaged because it submitted a more realistic price.
The Secrétariat du Conseil du trésor also explains that when a public body is willing to pay a higher price for greater quality, it may choose an award method based on the quality-price ratio, where the price of each acceptable bid is adjusted according to a mathematical formula:
https://www.tresor.gouv.qc.ca/faire-affaire-avec-letat/les-contrats-au-gouvernement/modes-dadjudication
This approach is particularly relevant in private security because it allows better recognition of what truly influences the success of a mandate: guard stability, supervision, replacements, training, customer service, administrative rigor and the agency’s ability to support the client throughout the entire duration of the contract.
Common mistakes in calls for tenders based only on price
A common mistake is to believe that a security guard is interchangeable from one agency to another, as if the service were identical regardless of the company selected. In reality, two agencies may provide a guard for the same post, but offer a completely different quality of service depending on supervision, training, absence management, communication and field oversight.
Another mistake is to request a very high level of service while awarding the contract to the lowest price. If the contracting authority requires experienced guards, available replacements, clean vehicles, high insurance coverage, a competent administrative team and efficient customer service, it must recognize that these elements have a cost.
A third mistake is failing to analyze abnormally low prices with sufficient rigor. When a price seems too low to cover the real costs of the mandate, it should raise questions. Did the agency properly calculate the premiums? Does it comply with the decree? Did it account for payroll taxes, vacation pay, replacements, supervision and administrative fees? Does the price truly allow the requested service to be delivered for the entire duration of the contract?
What alternatives can contracting authorities consider?
The first alternative is to integrate clear qualitative criteria into calls for tenders in order to better evaluate experience, structure, supervision, training, replacement capacity and customer service quality. These criteria should not be decorative. They should carry real weight in the decision.
The second alternative is to use a quality-price method rather than automatically choosing the lowest compliant bidder. This approach makes it possible to take cost into account while recognizing that a slightly higher price can sometimes offer better stability, fewer risks and better execution quality.
The third alternative is to provide for a serious analysis of abnormally low prices. When a bid is much lower than the others or seems insufficient to cover the minimum costs of the service, the contracting authority should request detailed explanations and verify whether the price is truly viable.
The fourth alternative is to better define operational expectations in the tender documents. If the client wants field supervision, quick replacements, detailed reports, identified vehicles, trained guards and available customer service, these requirements should be concretely evaluated, not simply mentioned in the specifications.
Conclusion
The lowest bidder may seem like a simple, transparent and economical method, but in the private security industry, it can create significant negative effects when it becomes the main decision criterion. A price that is too low can weaken agencies, harm guards, reduce service quality, increase the risk of non-compliance and create continuity problems for the contracting authority.
Private security relies on people, training, supervision, stability and a real ability to intervene when something does not go as planned. These elements have a cost, and this cost must be recognized in public calls for tenders.
For contracting authorities, the best approach is not necessarily to pay the highest price, but to choose an agency capable of demonstrating that its price is realistic, that its structure is solid and that its service can be delivered properly throughout the entire duration of the mandate. A qualitative or quality-price method would often better protect clients, agencies and guards, while promoting a healthier and more sustainable market.
To discuss a security need or request a quote, you can contact Charco Security here:
https://www.charco.ca/soumission/
