Overview
FAR Part 14 prescribes the policies and procedures for "Sealed Bidding," a highly structured method of government procurement characterized by public bid openings and objective evaluations. It is required when requirements are well-defined, price is the primary award factor, and there is no need to conduct discussions or negotiations with bidders.
Key Rules
- Evaluation Without Discussion: Contracts must be awarded based on the bid as submitted; the government is prohibited from holding discussions or negotiations with bidders to clarify or change their offers.
- Contract Types: Sealed bidding is strictly limited to Firm-Fixed-Price (FFP) contracts, though Fixed-Price with Economic Price Adjustment (FP-EPA) may be used in specific circumstances.
- Responsiveness vs. Responsibility: To receive an award, a bidder must be both "responsive" (the bid complies with all Invitation for Bid (IFB) terms) and "responsible" (the bidder has the capability and integrity to perform).
- The Uniform Contract Format (UCF): Contracting Officers must use the UCF (Sections A through M) for IFBs to ensure consistency, though exceptions exist for construction and shipbuilding.
- Price-Related Factors: While price is the driver, evaluation must include "foreseeable costs" such as transportation (F.O.B. origin), administrative costs for multiple awards ($500 per award), and Buy American Act adjustments.
- Public Opening: Bids must be opened publicly at the exact time and place specified in the solicitation to ensure transparency and integrity.
- Bidding Time: Generally, a minimum of 30 days must be allowed between the issuance of the solicitation and the opening of bids when a synopsis is required.
Responsibilities
- Contracting Officer (CO):
- Prepares the Invitation for Bids (IFB) and ensures it describes requirements clearly and completely without being unnecessarily restrictive.
- Publicizes the IFB and safeguards bids to prevent unauthorized disclosure before the opening.
- Conducts the public bid opening and records all bids.
- Evaluates bids for responsiveness and makes the final responsibility determination of the low bidder.
- Determines if a "minor informality" can be waived or if a "mistake in bid" requires correction or rejection.
- Bidders:
- Must submit sealed, written bids (or authorized electronic/facsimile bids) by the exact deadline.
- Ensure the bid is "responsive" by agreeing to all terms of the IFB without qualification.
- Provide bid samples or descriptive literature only if specifically required for evaluation.
- Head of Contracting Activity (HCA):
- Authorized to waive certain requirements, such as the inclusion of defective pricing clauses in contracts with foreign governments.
Practical Implications
- Rigidity of Submissions: In sealed bidding, a "late" bid is almost always rejected. Unlike Part 15 (Negotiations), there is no "competitive range" or opportunity to fix a deficient proposal; if a bid is non-responsive on day one, it is eliminated.
- Price as the Deciding Factor: This method is ideal for commodities or standardized services. For contractors, success depends entirely on lean pricing and operational efficiency, as they cannot win based on superior technical "bells and whistles" that exceed the IFB requirements.
- Two-Step Sealed Bidding: This is a hybrid approach used for complex requirements. Step One involves evaluating technical proposals (without prices) to find acceptable bidders; Step Two is a traditional sealed bid restricted to those who passed Step One. This allows the government to ensure technical quality while still benefiting from the price competition of sealed bidding.
- Public Transparency: Because bids are read aloud publicly, competitors gain immediate insight into each other’s pricing strategies, which is not the case in negotiated procurements.