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Solicitation and Selection Methods

Also known as: procurement methods, RFP handling, purchase methods, competitive proposals contracting, or competitive negotiated acquisition.

Depending on the amount involved in the procurement of new goods, products, or services, you may choose the option best matching your needs amongst the following solicitation and selection methods:

1. Informal purchase process
   1. Micro-purchase
   2. Small purchase
2. Formal competitive purchase process
   1. Best-price purchase
   2. Best-value purchase
3. Formal non-competitive purchase process

Micro-purchase process

Also known as: micro procurement methods

When:

• the cost of the micro-purchase is less than the cost of a small purchase (generally few hundreds or thousands).

A micro-purchase does not require obtaining competitive quotations if you determine that the price to be paid is fair and reasonable.

Micro-purchases should be equitably distributed among qualified suppliers in the local area and purchases should not be split to avoid the requirements for competition above the micro-purchase threshold

Minimal documentation is usually required:

• a determination that the price is fair and reasonable;
• and how this determination was derived.

Small purchase process

Also known as: small procurement methods

When:

• the cost is less than a formal purchase whether competitive or non-competitive (generally few dozens or hundreds thousands).

Small purchase procedures may not be used if the services, supplies, or other property costs either less than the micro-purchase threshold or more than the small purchase threshold. If small purchases procedures are used, price or rate quotations shall be obtained from an adequate number of qualified sources.

As a method of procurement, small purchase procedures recognize that, up to some statutory level (the small purchase threshold), it could cost more to conduct a formal competition than the value expected to be yielded by the formal competition. This procedure requires obtaining only limited competition from an adequate number of qualified sources (at least two). Solicitations and quotations for small purchases may be either oral or written.

Best-price purchase process

Also known as: best-price procurement, lowest-price procurement, or lowest-priced technically acceptable method.

The Federal Acquisition Regulation (FAR), document setting forth basic policies and procedures for proper acquisition by all federal agencies, defines this process as follows:

1. The lowest price technically acceptable source selection process is appropriate when best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price.
2. When using the lowest price technically acceptable process, the following apply:
   1. The evaluation factors and significant subfactors that establish the requirements of acceptability shall be set forth in the solicitation. Solicitations shall specify that award will be made on the basis of the lowest evaluated price of proposals meeting or exceeding the acceptability standards for non-cost factors. If the contracting officer documents the file pursuant to 15.304(c)(3)(iv), past performance need not be an evaluation factor in lowest price technically acceptable source selections. If the contracting officer elects to consider past performance as an evaluation factor, it shall be evaluated in accordance with 15.305. However, the comparative assessment in 15.305(a)(2)(i) does not apply. If the contracting officer determines that a small business’ past performance is not acceptable, the matter shall be referred to the Small Business Administration for a Certificate of Competency determination, in accordance with the procedures contained in Subpart 19.6 and 15 U.S.C. 637(b)(7)).
   2. Tradeoffs are not permitted.
   3. Proposals are evaluated for acceptability but not ranked using the non-cost/price factors.
   4. Exchanges may occur (see 15.306).

(FAR § 15.101-2, Lowest price technically acceptable source selection process)

So, best-price procurement is used when:

• the cost is more than a small purchase (generally more than a few dozens or hundreds thousands),
• you know exactly what you want,
• there is no difference in term of value between providers,
• and only the price matters.

To solicit offers from providers, the best-price purchase process relies on an Invitation to Bid (ITB), also known as Invitation to tender (ITT), Invitation for Bids (IFB), or Sealed Bids. Although simply one of many procurement methods that may be used, the best price purchase based on sealed bid method is sometimes more appropriate for particular projects, like construction or purchase of goods. When used, the sealed bid method defines specific requirements that have to be followed:

• the initial solicitation document should contain complete and precise specifications, and realistic expectations in order to get relevant offers;
• sufficient time is provided to bidders to prepare and submit their offer;
• the solicitation for bids is publicly advertised (newspapers, procurement sites, etc.);
• a sufficient number of bidders (usually two) are willing to submit an offer;
• all bids received are publicly opened at the time and place set forth in the invitation for bids document;
• the contract is awarded to the bidder:
  • who is declared responsible, i.e. able to properly and successfully execute the proposed contract under the terms and conditions agreed;
  • whose bid is responsive, i.e. conformed with all the requirements, terms, and conditions set forth in the solicitation document;
  • whose bid price is the lowest;
• the contract price is firm and fixed;
• no discussion with bidders is needed.

Best-value purchase process

Also known as: best-value procurement, greatest-value procurement, or tradeoff process

The Federal Acquisition Regulation (FAR), document setting forth basic policies and procedures for proper acquisition by all federal agencies, defines best value as follows:

"Best value means the expected outcome of an acquisition that, in the Government’s estimation, provides the greatest overall benefit in response to the requirement." (FAR § 2.101)

FAR also defines this process as follows:

1. A tradeoff process is appropriate when it may be in the best interest of the Government to consider award to other than the lowest priced offeror or other than the highest technically rated offeror.
2. When using a tradeoff process, the following apply:
   1. All evaluation factors and significant subfactors that will affect contract award and their relative importance shall be clearly stated in the solicitation; and
   2. The solicitation shall state whether all evaluation factors other than cost or price, when combined, are significantly more important than, approximately equal to, or significantly less important than cost or price.
3. This process permits tradeoffs among cost or price and non-cost factors and allows the Government to accept other than the lowest priced proposal. The perceived benefits of the higher priced proposal shall merit the additional cost, and the rationale for tradeoffs must be documented in the file in accordance with 15.406.
   
   (FAR § 15.101-1, Tradeoff process)

So, best-value procurement is used when:

• the cost is more than a small purchase (generally more than few dozens or hundreds thousands),
• you don't know exactly which solution will best address your needs (this process is a good consulting source),
• more than two providers are willing to make an offer,
• and value rules over price.

To solicit offers from providers, the best-value purchase process relies on a Request for Proposals (RFP). The RFP sets forth acquisition requirements and ask providers to submit a competitive proposal. Although simply one of many procurement methods that may be used, the RFP-based solicitation and selection method is more appropriate than the sealed bids method for specific projects. Indeed, it's particularly the case when provided specifications focus more on outcomes and benefits whatever features are proposed by providers in order to achieve rather than for particular projects, like construction or purchase of goods. When used, the best-value purchase procurement method defines specific requirements that have to be followed:

• the RFP should contain complete and precise specifications, and realistic expectations in order to get relevant offers, particularly:
  • the Statement of Purpose, which is the description and extent of products and services and the overall objectives of the contract;
  • the provider's Background Information, a brief overview of the organization, its operations, its strengths and weaknesses;
  • the Scope of Work, an enumeration of specific duties to be performed by the provider and the expected outcomes;
  • all the Requirements for Proposal Preparation, regarding a consistent structure of content, types of information and documents to provide;
  • the Outcome and Performance Standards, which are targets, minimal performance standards expected, methods for monitoring performance and process for implementing corrective actions;
  • the list of Deliverables, like goods, products, services, reports, and plans;
  • the Term of Contract, i.e. length, date of start and end of the contract, and, eventually, options for renewal;
  • the Payments, Incentives, and Penalties, listing all the terms of payment for adequate performance, incentives for superior performance, and penalties for inadequate performance or lack of compliance;
  • the Contractual Terms and Conditions, including standard contracting forms, certifications, and assurances;
  • the Evaluation and Award Process, unveiling all the evaluation factors along with their relative importance in the final decision, and procedures for making the final contract award;
  • the whole Process Schedule, as a clear, concise presentation of the timeline of the different steps leading to the final decision;
  • the Points of Contact, recording all the people involved with their name, title, responsibilities, and the different ways to contact them;
• sufficient time is given to providers to prepare and submit their competitive proposal;
• the solicitation for competitive proposals is publicly advertised (newspapers, procurement sites, etc.);
• a sufficient number of providers (usually two, or any greater adequate number) are willing to submit a proposal;
• all proposals received are publicly opened at the time and place set forth in the request for proposals;
• the contract is awarded to the provider:
  • who is declared responsible, i.e. able to properly and successfully execute the proposed contract under the terms and conditions agreed;
  • whose proposal is responsive, i.e. conformed with all the requirements, terms, and conditions set forth in the solicitation document;
  • whose proposal offers the best value proposition, i.e. the greatest value at the lowest cost with other evaluation factors considered;

• the contract price is firm and fixed;
• no discussion with bidders is needed.

Non-competitive purchase process

Also known as: noncompetitive procurement

When:

• none of the aforementioned methods applies,
• and you can justify relying solely on one provider (no competition, unsolicited proposal, etc.).

The non-competitive proposal or sole source procurement process is accomplished through solicitation or acceptance of a proposal from one single source only when other procurement methods, namely micro-purchases, small purchases, and competitive procedures like sealed bids, or competitive proposals, are not applicable or lead to an unrealistic process.

Such circumstances could be:

• It's important to thoroughly document the rationale of the decision to use a sole source as your procurement process.
  
  Indeed, when the time comes for the audit of the decision cycle, it will be useful, and helpful. unicity, i.e. the item is only available from a single source, like for parts maintenance;
• immediacy, i.e. delays resulting from competitive solicitation are not acceptable;
• emergency, i.e. delays resulting from other methods of solicitation are not bearable;
• legitimacy, i.e. specific contexts (geographic, contractual, political, legal, military, security, etc.) may allow such a non-competition of sources
• inadequacy, all sources are qualified as inadequate (price, quality, service, support, etc.)
• exigency, i.e. any other specific reason dictating the choice of a given provider.

Inappropriate Sole Source Justification

Sole sourcing is not appropriately justified and justifiable when used as a method of selecting a preferred vendor. Notwithstanding the fact that they could be voided by potential sole source solicitation protests, purchases of this king, when put under scrutiny, will surely attract auditors' interest in their quest for details suggesting a bit of favoritism, partiality, and other bias.

Sole Source Protest Letter Template

In the sole source solicitation context, a sole source protest letter may be sent by a prospective provider who is aggrieved in connection with the sole source solicitation process and resulting award of the contract to another provider, and would like to file a protest.

To help you identify what kind of facts are deemed valid, thus acceptable grounds for such a sole source protest letter, you might read the discussion "How to protest against Sole Source Solicitation" and, to create your own sole source protest letter, use the templates and samples provided in your FREE RFP Letters Toolkit.

Definitions

Responsibility: being a responsible provider

Failing to be able to honor the contract agreed, the non-responsibility of the provider is established, so such provider is declared as non-responsible. The responsibility of a provider is established, so such provider is declared as responsible, when the organization is able to properly and successfully execute the proposed contract under the terms and conditions agreed. May be taken into account such considerations as integrity of the organization, compliance with public or internal policies, client references as record of past performance, financial viability, and whether technical or administrative resources to be dedicated to the project.

A non-responsible provider, although supplying all necessary information, would, for example, not be able to fully satisfy requirements defined in the RFP or would be financially unstable or unable to complete the project in a timely manner.

Responsiveness: submitting a responsive proposal

Failing to be able to honor the requirements as set forth in the solicitation document, the non-responsiveness of the proposal is established, so such proposal is qualified as non-responsive. The responsiveness of a proposal is established, so such proposal is qualified as responsive, when the proposed solution is conformed with all the requirements, terms, and conditions set forth in the solicitation document. May be taken into account such considerations as Return on Investment (ROI), cost analysis, installation, implementation, training, or support.

A non-responsive proposal would, for example, neglect to provide mandatory information or documents requested in the RFP.

Top Books on Procurement, Solicitation, and Selection

Source Selection Answer Book (2nd Edition)
by Vernon J. Edwards
Hardcover: 443 pages
ISBN: 1567261728

Book Description:
The newly expanded and updated second edition of this best selling and practical handbook is designed to give hands-on contracting professionals a solid working knowledge of this critical process.
This proven resource covers the entire source selection process, including acquisition and source selection planning, preparation of requests for proposals, proposal solicitation and preparation, proposal evaluation, award without discussions, discussions and final proposal revisions, final proposal evaluation, contractor selection, and debriefings and protests.

Source Selection Answer Book, Second Edition provides concise, straightforward answers to common questions about the Federal government’s rules and procedures in selecting contractors including:

• Completely updated FAR Part 15 citations and quotations.
• Revised answers to questions based on new regulations and case law.
• Easily understandable explanations of concepts such as evaluation factors for award, relative importance, cost realism analysis, and tradeoff.
• How agencies evaluate proposals and how to evaluate agencies.
• Answers on the best methods in developing effective proposal strategies.

All in a unique question and answer format that allows the reader to go directly to the topic of interest for fast and comprehensive solutions!

Solicitation and Selection Web References

Simplified Acquisitions
SubPart 13, Federal Acquisition Regulation (FAR)

This part prescribes policies and procedures for the acquisition of supplies and services, including construction, research and development, and commercial items, the aggregate amount of which does not exceed the simplified acquisition threshold (see FAR 2.101). Subpart 13.5 provides special authority for acquisitions of commercial items exceeding the simplified acquisition threshold but not exceeding $5 million ($10 million for acquisitions as described in FAR 13.500(e)), including options. See Part 12 for policies applicable to the acquisition of commercial items exceeding the micro-purchase threshold. See FAR 36.602-5 for simplified procedures to be used when acquiring architect-engineer services.

Sealed Bidding
SubPart 14, Federal Acquisition Regulation (FAR)

This part prescribes:

1. Use of Sealed Bidding.
   The basic requirements of contracting for supplies and services (including construction) by sealed bidding;
2. Solicitation of Bids.
   The information to be included in the solicitation (invitation for bids);
3. Submission of Bids.
   Procedures concerning the submission of bids;
4. Opening of Bids and Award of Contract.
   Requirements for opening and evaluating bids and awarding contracts; and
5. Two-Step Sealed Bidding.
   Procedures for two-step sealed bidding

Contracting by Negotiation:
Competitive and Sole Source Acquisitions
SubPart 15, Federal Acquisition Regulation (FAR)

This part delineates policies and procedures governing competitive and noncompetitive negotiated acquisitions like:

1. Sole source acquisitions. When contracting in a sole source environment, the request for proposals (RFP) should be tailored to remove unnecessary information and requirements; e.g., evaluation criteria and voluminous proposal preparation instructions.
2. Competitive acquisitions. When contracting in a competitive environment, the procedures of this part are intended to minimize the complexity of the solicitation, the evaluation, and the source selection decision, while maintaining a process designed to foster an impartial and comprehensive evaluation of offerors’ proposals, leading to selection of the proposal representing the best value to the Government (see FAR 2.101).

Tips, templates, and samples of professional RFP letters

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