Selecting The Form Of Contracting

Selecting The Form Of Contracting

Sealed bidding employs competitive bids, public bid opening (in the case of Government), and awards based on price when bidder is “responsive” and “responsible”, meaning it responds to the requirement without taking exception, and has a documented history of responsible business conduct. Normally considered for use when five conditions are met:

* The dollar value of the purchase must be large enough to justify the investment in time and resources to accomplish the process (Nash, Ralph Jr.; & Cibinic, John Jr, 1993)

* Time permits solicitation, submission, evaluation and possible resolution of bids

* Award will be made on the basis of price

In Government procurements, sealed bidding was once considered the preferred method; however, negotiation is now sometimes encouraged, especially for complex procurements and when contracting officer determines it to be in the Government's best interests.

Sealed Bidding

The "Sealed Bidding CLM" is designed to provide the federal procurement professional with a better understanding of contracting for supplies and services using the sealed bidding process. This CLM covers pre-solicitation concerns; procedures for soliciting bids; methods for receipt and correct handling of bids; procedures to correct common mistakes in bids; and selection of the correct contractor for award. It enables the procurement professional to expand upon the material on the sealed bidding process presented in CON 110 and review sealed bidding concepts for application on the job. (Darrell, 2005)

The Sealed Bidding Process

The sealed bidding method of contracting must be used whenever the following conditions are met:

* Time permits solicitation, submission, and evaluation of sealed bids;

* Award will be made on the basis of price and other price-related factors (see FAR 14.201-8);

* It is not necessary to conduct discussions; and

* there is a reasonable expectation of receiving more than one sealed bid.

Otherwise, competitive proposals must be requested (FAR 6.401(a)).

The sealed bidding process has four steps (FAR 14.101):

1. Preparation of a complete, clear, unambiguous, and not unnecessarily restrictive of competition description of the requirement- both substantive (what is needed, when and where it is needed) and procedural (how the source will be selected and the award made). This is the solicitation document and is called the invitation for bids (IFB).

2. Solicitation of bids from the general public by publicizing the IFB through distribution to prospective suppliers, both those on the "solicitation list" and those who specifically request copies of the IFB; posting notices in public places; and synopsizing in the Commerce Business Daily (FAR Part 5). (Manos, 2004)

3. Submission of sealed bids by prospective suppliers and opening of these bids by the contracting officer at the time and place stated in the IFB. The general public is welcome to attend this opening.

4. Evaluation of the bids by the contracting officer to determine which (if any) responsive offer by a responsible bidder provides the lowest total acceptable cost to the Government, and awarding to that bidder a firm fixed price contract (or a fixed-price with economic price adjustment contract if provided for in the IFB). The evaluation process may involve conducting ...