Overview
FAR 36.204 mandates that agencies disclose the scope of a construction project by providing its physical characteristics and an estimated price range in advance notices and solicitations. The primary purpose is to inform potential bidders of the project's scale without revealing the exact Independent Government Estimate (IGE).
Key Rules
- Mandatory Disclosure: Advance notices and solicitations must state the magnitude of the requirement.
- Prohibition on Precise Estimates: Under no circumstances is the specific dollar amount of the Government’s estimate to be disclosed to the public.
- Prescribed Price Ranges: The estimated price must be categorized into one of eight specific ranges:
- (a) Less than $25,000.
- (b) Between $25,000 and $100,000.
- (c) Between $100,000 and $250,000.
- (d) Between $250,000 and $500,000.
- (e) Between $500,000 and $1,000,000.
- (f) Between $1,000,000 and $5,000,000.
- (g) Between $5,000,000 and $10,000,000.
- (h) More than $10,000,000.
Practical Implications
- Bid/No-Bid Decisions: These ranges allow contractors to quickly determine if a project aligns with their operational capacity and bonding limits.
- Prevents "Bidding to the Budget": By using ranges rather than exact figures, the government encourages competitive pricing based on the contractor's actual costs and market conditions rather than the agency's internal budget.