Sealed bidding and competitive proposals

Overview

FAR 6.401 establishes the criteria for selecting between sealed bidding and competitive proposals, mandating the use of sealed bids when specific conditions are met while allowing for competitive proposals in all other instances.

Key Rules

• Mandatory Sealed Bidding: Contracting officers must use sealed bidding (FAR Part 14) if the following four conditions exist:
  1. Time is sufficient to solicit, submit, and evaluate bids.
  2. The award is based strictly on price and price-related factors.
  3. Discussions with offerors are unnecessary.
  4. There is a reasonable expectation of receiving more than one bid.
• Competitive Proposals: This method (FAR Part 15) is used when the criteria for sealed bidding are not met.
• International Exception: Competitive proposals are generally required for contracts performed outside the United States because local laws and business practices typically necessitate discussions with offerors.
• Applicability: Both methods are acceptable for full and open competition (Subpart 6.1), competition after exclusion of sources (Subpart 6.2), and, where appropriate, other than full and open competition (Subpart 6.3).

Practical Implications

• Contracting officers do not have unlimited discretion; they must justify using competitive proposals by demonstrating that at least one of the four sealed bidding requirements cannot be satisfied.
• In the modern procurement environment, competitive proposals have become the standard for complex requirements because most acquisitions require technical trade-offs or discussions that go beyond mere price-related factors.