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The Competition in Contracting Act of 1984 (CICA) mandated full and open competition to the maximum extent practicable. CICA further mandated that "sole source" contracting would not be authorized in most cases and then, only when it is demonstrated that no one else can provide the product or service required.
Essentially, competitive procedures for Federal procurement under CICA fall into four basic categories: 1. Full and Open Competition
2. Full and Open But Excluding Certain Sources
3. Other Competitive Procedures
4. Exceptions to Full and Open Competition
The "methods of contracting" used by the Federal Government are categorized as Sealed Bidding or Negotiation. If not Sealed Bidding, then the Negotiation method is used which includes small purchases and other simplified purchasing procedures as well as competitive negotiation and non-competitive negotiation.
Small Purchases and Other Simplified Purchasing Procedures Any acquisition of $25,000 or less from a commercial source is considered a small purchase. the sealed bidding process has been determined to be unfeasible and not practicable and is, therefore, not used for small purchases (unless necessary to develop adequate competitive sources of supply). This reduces administrative costs and also improves the opportunity for small businesses to obtain Government contracts. Purchases of $10,000 or less are generally set aside for small business. Purchases of $1,000 or less may be made without competition, providing the prices are reasonable. such purchases are to be distributed equitably among qualified suppliers. For small purchases of more than $1,000, a quotation must be solicited from a reasonable number of qualified sources. Normally, oral quotations from three suppliers in the local trade area are solicited. Written solicitations must be used for construction contracts of more than $2,000. Written quotations may be solicited on Standard Form 18 or an agency's equivalent form when (1) purchasing a large number of line items on a single order, (2) special specifications are being used to buy something that is different from that normally purchase, (3) suppliers are located outside of the normal trade area, or (4) it is otherwise not economical or practical to obtain oral quotes. A quotation by a potential supplier is generally not an offer (unless it is a written quotation on which the supplier has stated that it is a firm offer good for a certain amount of time). Small purchases are normally placed on "purchase order" forms. Optional Form 347 is designed for this purpose, and orders for a large number of items. Purchase orders are offers by the Government to buy the supplies or services described in the order, at the prices listed in the order (except for unprimed purchase orders) (FAR Subpart 13.5). thus, when a purchase order is issued in response to a quotation, a binding contract does not come into being until the supplier accepts the offer by sending a written notice of acceptance or starting to perform the work or delivering the supplies ordered. Blanket purchase agreements (BPAs) are designed to reduce administrative costs in filling repetitive requirements by establishing "charge accounts" with qualified suppliers, including Federal supply schedule contractors from whom numerous purchases are likely to be made in a given period. This eliminates the need for assessing many purchase order documents. FAR 13.203-1(a)(2) provides that a contracting officer may establish BPAs to provide commercial sources of supply for offices or projects that do not have or otherwise need contracting authority. The BPA must provide for a list of individuals authorized to make purchases or "calls" and the dollar limit per purchase (FAR Subpart 13.2).
The Sealed Bidding Process The sealed bidding method of contracting must be used whenever the following conditions are met:
Otherwise, competitive proposals must be requested (FAR 6.401(a)). The sealed bidding process has four steps (FAR 14.101):
Prior to bid opening, discussions with prospective bidders regarding the solicitation are limited essentially to general information that would not provide any competitive advantage over those who did not get exactly the same information (FAR 14.211). More specific information may only be provided to all prospective suppliers by (1) amending the solicitation (FAR 14.208) or (2) conducting a pre-bid conference (FAR 14.207). After bid opening and prior to award, discussions with bidders are limited essentially to resolving questions concerning (1) the responsibility of prospective contractors (FAR Subpart 9.1) and (2) possible mistakes in bids (FAR 14.405 and 14.406). The sealed bidding process demands strict adherence to rigid procedures. Whenever a contractor believes that proper solicitation and award procedures are not being followed, that contractor may file a protest with the General Accounting Office (GAO). GAO decisions have had a great influence on the sealed bidding process.
Two-Step Sealed Bidding (FAR Subpart 14.5) The purpose of two-step sealed bidding is to obtain as many of the benefits of sealed bidding as possible when a complex technical requirement cannot be described in sufficiently complete, clear, accurate, unambiguous, and unrestrictive terms to permit the use of the conventional sealed bidding process. The two-step process provides fro the development of a description suitable for conventional sealed bidding in future acquisitions. Two-step sealed bidding may be used in preference to negotiation when (1) sufficient time is available (the two-step method usually takes longer than any other method), (2) more than one qualified supplier is expected to bid, (3) there are definite criteria for evaluating technical proposals, and (4) an FFP or FPE contract will be used. Step 1 essentially involves only determinations of responsiveness. Step 2 involves determinations of responsiveness, responsibility, and cost. Under Step 1, technical proposals (with no prices or cost information) are solicited from qualified sources in the general public, just as under conventional sealed bidding. Then the technical proposals received are evaluated in accordance with the evaluation criteria in the solicitation. This evaluations may include technical discussions with offerors. From this evaluation process, all of the technical proposals which are acceptable are selected for Step 2. (A prospective supplier may submit more than one acceptable technical proposal.) In Step 2, fixed-price sealed bids are submitted and evaluated and an award is made, just like in conventional sealed bidding except that the competition is limited to those technical offers determined acceptable in Step 1.
The Negotiation Process (FAR Part 15) Contracting by negotiation provides flexibility not available under sealed bidding. when competition must be restricted, such as for small business total set-aside or national security classified acquisitions, the only difference from sealed bidding should be that the competition is limited and in the case of classified acquisitions the process is not fully open to observation by the general public. This is a price competitive negotiation process. In other cases, negotiation may be limited to a sole-source supplier of a unique, new, complex, expensive product, provided that the criteria of a FAR 6.302-1 are met. This may involve extensive analysis and discussions to reach mutual agreement on the technical, management, and cost aspects of contract performance, and on the language of special contract provisions, including the specification or work statement. Contracts may be awarded on the basis of competitive negotiations only if the criteria of FAR 6.401(b) are met and all required clearances and approvals have been obtained. The negotiation process involves the following steps:
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