A sealed bid is a procurement method used in the government bid and proposal process to obtain government contracts. Sealed bidding varies from traditional government proposals; it is important to understand the differences and the nuances that go along with a sealed bid.
Sealed Bid Process
Sealed bidding is primarily used for firm-fixed price contracts, when the government is looking for the lowest price. Request for proposals (“RFPs”) often require more detailed information from the perspective contractors.
There are 5 steps in sealing bidding:
- Preparation of invitations for bids. The Government must describe their requirements clearly, accurately, and completely and cannot impose unnecessarily restrictive specifications or requirements.
- Publicizing the invitation for bids. The invitations to bid are distributed to perspective bidders and posted in public places.
- Submission of bids. Companies must submit sealed bids which will be opened at the time and place stated in the solicitation for public opening.
- Evaluation of bids. Bids are evaluated without discussion.
- Contract award. After the bids are publicly opened, the bid that is most advantageous to the Government (lowest price), will be awarded the contract. The bidder must be responsible and responsive and the bid must conform to the terms of the invitation for bids.
Federal Acquisition Regulation (“FAR”) part 14.
Sealed Bid Requirements
First and foremost, the bid must comply in all material respects with the invitation for bids. Unless expressly stated, bids cannot be submitted via telegram, mailgram, or fax. FAR 14.301. It is crucial to comply with the method designated in the invitation for bid, otherwise your bid will likely not be considered at all. See also information about exceptions to full and open competition.
Two-Step Sealed Bidding
Two-step sealed bidding can be used in acquisitions that require technical proposals. Two-step sealed bidding may be used when:
- Available specifications or purchase descriptions may be too restrictive without technical evaluation,
- There is definite criteria for evaluating technical proposals,
- More than one technically qualified source is expected to be available, and
- A firm-fixed price contract or fixed-price contract with economic price adjustment will be used
Bid must be Completed Properly
Although sealed bidding requires less steps than the traditional Government Bids and Proposal Process, it is even more critical to make sure your bid is done correctly the first time so that you can be considered ‘responsible and responsive’ by government standards. Even if you submit the lowest-price, that does not guarantee you the contract in a sealed bid situation.
For help with sealed bids call our experienced government contracts attorneys at 1-866-601-5518 for a free consultation.