Sealed Bids Essay

849 Words4 Pages
Federal Acquisition Regulation (FAR) 6.401 identifies two acceptable procedures for obtaining competitive prices: Sealed Bids vs. Competitive Proposals. Sealed bidding is how the government contracts competitively when its requirements are clear, accurate and complete. An invitation for Bids (IFB) is the method used for the sealed bid process. IFBs usually include a copy of the specifications for the particular proposed purchase, instructions for preparation of bids, and conditions of purchase, delivery and payment schedule. The IFB also designates the date and time of bid opening (Edward, 2009). Following receipt and evaluation of the bids, a contract is usually awarded to the lowest priced bidder, determined to be responsive and responsible by the contracting officer. Each sealed bid is opened in public at the purchasing office at the time designated in the invitation. Facts about each bid are read aloud and recorded. A contract is then awarded to the low bidder whose bid conforms to all requirements of the invitation and will be advantageous to the government in terms of price, and price-related factors included in the invitation (Edward, 2009). Sealed bidding always leads to a firm-fixed price contract or fixed-price with economic adjustment contract. In fixed-price contracts, the costs of performance can be predicted with great accuracy. Firm-fixed price contracts place the total cost risk on the contractor. Final contract award is made to the offeror who provides the best overall deals to the government at the lowest prices. The offer who bids or proposes a firm fixed price to do work in guaranteeing to deliver the work to meet requirements for that amount of money. When the government accepts the offer, it is obligated to pay that amount of money and the contractor is similarly obligated to deliver or perform the work for that fixed price

More about Sealed Bids Essay

Open Document