In the complex and growing business of government procurement, one thing is certain: there are a lot of rules and regulations when it comes to awarding government contracts. It’s important to adhere to all processes, especially when initially soliciting a government job.
Although many people use the terms "bid" and "proposal" interchangeably, they actually have two different, but somewhat similar definitions. Bids are used in sealed bidding purchases that usually last from 30 to 45 days from the time the procurement officer gets the specifications for the invitation to bid to when it is awarded. For requests for proposals (RFPs), where proposals are negotiated and awarded, the process can take longer, usually three to nine months or more.
For most government competitive procurements, there are four primary types of solicitations, says Kenneth Hayslette, the owner of Atlantic Beach, Fla.-based Hayslette & Associates, a company specializing in professional procurement training and consultancy. Here’s a look at what they are:
Invitation To Bid (ITB)/Invitation For Bids (IFB)
ITBs and IFBs are awarded solely on lowest responsive price (i.e. the least expensive bidder that meets the minimum requirements) and sometimes referred to as “sealed bidding.” Solicitation (ITB/IFB and RFP) postings are usually done on an agency’s website, Hayslette says, and it’s up to potential contractors to search online and find them. Bids can be found on bidnet.com, a website that showcases local, state and federal job postings, or on fbo.gov, which showcases roughly 25,000 active federal opportunities at any time. This type of bid is usually used any time the government can specify exactly what it wants, such as the purchase of a product — guns, chairs, cars, lightbulbs, tanks, etc. — or sometimes a service, in a finite quantity.
Federal projects requesting this type of bid are usually worth more than $100,000.
State and local projects usually range from $500 to $100,000. There aren’t negotiations because contracts are strictly awarded to the lowest responsive and responsible bidder.
The government’s instructions on how to prepare the Invitation To/For Bid should be very specific: the conditions for purchasing an item, the packaging delivery, shipping, payment and deadline for submitting a bid. For example, if a contract for a door is requested, it should detail exactly what is needed including the exact dimensions — height, width and size — of the wood required to create the door, which way it will swing, and the type of metal frames.
RFP / Competitive Sealed Proposals (CSP)
RFPs and CSPs are used when a product or service is needed to solve a problem that could have multiple solutions. This format is typically used when the government wants to look beyond the overall cost to consider aspects such as the potential solutions, qualifications, experience and track record a potential proposer may offer, in addition to a competitive rate. This process is frequently used for government services where the performance of the service is as or more important than the price.
The minimum requests are specified but then it’s up to each vendor to showcase their skill set, experience and ability to go above and beyond the initial request to offer the best solution, at the best price, within the requested time schedule. Hayslette says the labor mix of supervisors to workers is also something that is considered because the government prefers to not have proposers who are top heavy in management. For example, a janitorial service would ideally have a ratio of one supervisor for every 16 to 25 workers and one manager for every four to six supervisors, Hayslette says.
Requests for Statements of Qualifications
These solicitations are less common and used when the government can only select someone by their qualifications, not by price, Hayslette says. This is usually reserved for professional services including medical, legal, architects, engineers, etc., and the price is usually negotiated after the awardee is selected.
Request for Quotes (RFQ)
RFQs are used on non-repetitive contracts below a certain agency threshold, typically less than $25,000. These contracts may be awarded on price or best value, depending upon the particular entity's rules and procedures. For example, some state governments have a bid threshold of $50,000, which means if anything is greater than $50,000 — even by a penny — that government entity must do an RFP or Invitation for Bid, Hayslette says. But if a request for quote comes in at $49,000 it can bypass the formal documentation with less stringent requirements based on low price or best value.
Government organizations at any level — be it local, state or national — must consider public accountability when choosing who will complete projects on their behalf. By understanding the solicitation process, you can take the first step toward landing a government contract.
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