This analysis covers FAR Subpart 14.4 - Opening of Bids and Award of Contract, which details the rigid procedural requirements for handling sealed bids to ensure transparency and fairness in the federal procurement process.
Overview
FAR Subpart 14.4 prescribes the mandatory procedures for the secure receipt, public opening, and systematic recording of sealed bids, as well as the criteria for rejecting non-responsive offers. It establishes a strict framework for identifying and correcting mistakes in bids both before and after award, emphasizing the preservation of the competitive bidding system's integrity. The subpart ensures that contracts are awarded to the lowest responsible bidder whose bid conforms to the essential requirements of the solicitation.
Key Rules
- Safeguarding Bids: Bids must remain unopened in a locked bid box or secure electronic environment until the exact time set for opening. Information regarding the number or identity of bidders is restricted to a "need-to-know" basis.
- Public Opening: Bids must be opened publicly, and unless impractical, read aloud and recorded. For unclassified acquisitions, the public has the right to examine bids under government supervision.
- The "Compelling Reason" Standard: Once bids are opened, the government cannot cancel the invitation (IFB) unless there is a "compelling reason" (e.g., ambiguous specifications, unreasonable prices, or the requirement is no longer needed).
- Responsiveness: Any bid that fails to conform to the essential requirements (delivery, specifications, price terms) must be rejected. Bidders cannot use "price in effect at time of delivery" or other conditions that limit liability.
- Mistakes in Bids:
- Clerical: Obvious decimal point errors or unit mistakes can be corrected by the CO after verification.
- Substantive: Requires "clear and convincing evidence" of both the mistake and the intended bid to allow correction.
- Minor Informalities: The government may waive or allow a bidder to cure "matters of form" that do not affect substance (e.g., failure to submit the required number of copies or failure to sign, provided there is other evidence of intent to be bound).
Responsibilities
- Contracting Officer (CO): Responsible for the overall security of bids, determining the responsiveness of bidders, identifying potential mistakes, and coordinating with legal counsel on mistake determinations.
- Bid Opening Officer: Tasked with the physical opening of bids, reading them aloud, and certifying the accuracy of the Abstract of Offers (SF 1409).
- Agency Head: Holds the authority to cancel an IFB after opening, authorize the completion of an acquisition through negotiation if bids are rejected, and make final determinations on substantive bid corrections.
- Legal Counsel: Must provide concurrence on all proposed determinations regarding mistakes in bids before they are issued.
- Bidders: Responsible for ensuring bids are submitted in the correct format, are free of restrictive conditions, and for providing "clear and convincing" evidence if a mistake is alleged.
Practical Implications
- Rigidity of Sealed Bidding: Unlike Part 15 (Negotiations), there is no "back and forth" to fix a non-responsive bid. If a bidder includes a condition that modifies the IFB's terms—even slightly—the CO is often legally mandated to reject the bid entirely, regardless of how low the price is.
- Competitive Intelligence: Because abstracts of unclassified bids are available for public inspection, contractors can use these records to analyze competitors' pricing strategies for future acquisitions.
- Electronic Risks: In the era of electronic bidding, the "unreadable bid" rule (14.406) places a heavy burden on the contractor. If a file is corrupted, the bidder must prove the error was caused by Government software/mishandling; otherwise, the bid is rejected.
- Post-Award Caution: Correcting a mistake after the contract is awarded is significantly more difficult than before. It requires proving the mistake was either mutual or so "apparent" that the CO should have noticed it. This underscores the importance of the CO’s duty to verify "suspiciously low" bids before award.