FAR 101: SEALED BIDDING OR CONTRACTING BY NEGOTIATION

3:00 PM November 21, 2014



FAR 101: SEALED BIDDING OR CONTRACTING BY NEGOTIATION


By Maria L. Panichelli and Jennifer M. Horn

Cohen Seglias Pallas Greenhall & Furman, P.C.


Whether you a contractor working on federal, state or private projects, certain construction practices should be followed to insure that you and your company is protected on the project. Following certain business practices can mean the difference between a profitable construction project and one that exposes your company to financial risk. This Webinar will focus on best construction practices before, during and at the conclusion of a construction project. It seeks to outline best contracting, accounting, insurance, documentation and claims prevention strategies for beginner and experienced practitioners alike.


Give Me 5: Best Practices in Construction

Course Instructor:

Jennifer Horn, Partner, Cohen Seglias Pallas Greenhall & Furman PC 

Maria Panichelli, Associate, Cohen Seglias Pallas Greenhall & Furman PC

Wednesday, December3, 2014  *  2:00 eastern / 1:00 central / 11:00 pacific


The fiercest competitors in the federal contracting world know that, if you want to win a contract, it is imperative to fully understand all of the terms of the Solicitation.  To that end, it is critically important that you understand the type of procurement you are participating in, and the process by which you will be judged against other contractors.  Although it might not seem like it, familiarity with the procurement process can make all the difference between award and disappointment. 


As those of you who attended our webinar already know, in the federal procurement world, there are two primary contracting methods.  The first, sealed bidding, is governed by Section 14 of the Federal Acquisition Regulation ("FAR").  The second, contracting by negotiation, is governed by Section 15 of the FAR.  Those sections lay out the distinct procedures required under each type of procurement.


There are some key differences that you should be aware of before you bid.  First: vocabulary. (Nothing announces inexperience like an inability to use the correct jargon!) In a Sealed Bidding context, the government issues a solicitation known as an "Invitation to Bid" or "IFB" and the contractors, or "bidders," submit their responsive "bids."  In comparison, when the procurement proceeds under FAR Section 15, the solicitation is referred to as a "Request for Proposals"  or "RFP" and the contractors, or "offerors," submit their "proposals."    It is not just the terminology that is different, the procurement process under these two methods differs, too.


In sealed bidding, the award is made on the basis of price alone; the lowest "responsible" and "responsive"  bidder will win the contract.  A bidder is considered "responsible" if it has demonstrated the capability to successfully perform the project (i.e. the contractor actually possesses the equipment, labor, resources and experience necessary to complete the contract).  A "responsive  bidder" means a person who has submitted a bid that conforms in all material respects to the IFB.   In other words, be sure that you supply all of the information required, and that you do not get creative or try to "spin" your answers.  Conversely, do not provide extra, unsolicited information.  That type of bid will be deemed non- responsive.  Make sure you comply with all the requirements and specifications to be considered "responsive."  Only the responsive, responsible bidders will even be considered.  Of those, the lowest price bid wins, period.


In contracting by negotiation, the process is a little different.  Price is not the only factor; rather, price is weighed against other "evaluation factors" selected by the agency.  It is then determined which bidder, on balance, presents the "best value" to the government.  (Common evaluation factors include: Management Organization; Proposed Technical Approach; Past Performance; Key Personnel Qualifications; Past Experience with Similar Types of Projects; Proposed Schedule; Technical Expertise; and Small Business Subcontracting Plans.)   Upon submission of proposals, the government has two choices.  First, the contracting officer ("CO") can choose to simply award the contract to the offeror who it believes presents the "best value".  In the alternative, the CO can select certain offerors to be in the "competitive range" and conduct "discussions" with those offerors alone.  Those discussions will identify weaknesses in the proposals,  and may include persuasion, alteration of assumptions and positions, give-and-take.  The negotiations may apply to price, schedule, technical requirements, type of contract, or other terms of a proposed contract.  Following the conclusion of these discussions, the offerors are asked to submit their final proposal revision.  The CO decides, based on those final proposals, which offeror constitutes the "best value."  The contract is then awarded to that contractor.


It is important to understand these differences so that you can tailor your bid, or proposal, accordingly.  For instance, if you are responding to an IFB, getting your price the lowest it can possibly be is likely the most important thing you can do (assuming you are responsive and responsible).  The trick, of course, is to figure out a way to be the low bidder at a price that still enables you to make a profit.  In contrast, when submitting a proposal in response to an RFP, you would be wise to carefully study the terms of the solicitation, and see what other evaluation factors the government is considering.  Moreover, you should determine the weight of each of these factors.  Maybe price and technical experience together are weighted the same as past performance.   Maybe past performance, key personnel and proposed technical solution, collectively, are given equal weight as price.  After you ascertain what the government views as the most important, you should shape your proposal to address the evaluation factors in order of importance.  In these ways, you can use your understanding of the procurement process to build a better proposal, and ultimately obtain more contract awards.


Now that you realize the importance of understanding the federal procurement process, you must be dying to learn more about it, right?  Lucky for you, you came to the right place!  Get yourself up to speed on solicitations and bid/proposals using our previous Give Me 5% webinar on the FAR Fundamentals: Bidding 101, and keep an eye out on the GM5 website for the upcoming webinars in our series, including a webinar on the next step in the procurement process, Source Selection and Award.    In the meantime, if you have any questions, contact a legal professional.


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