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Chaptcr 4: Mcthods of Selcction http://ww~~.fta.dot.go~'ftallibrarviadmiruBPPmanisect 40.htm <br />' RE~UIREMENT <br />There is no Federal requirement that grantees use the sealed bid or competitive proposal method of <br />procurement for any procurement. These are methods identified by the FTA as methods that may be <br />used as appropriate.20 The following conditions should be present for sealed bidding to be ~feasible: <br />1. A complete, adequate, and realistic specification or purchase description is available; <br />2. Two or more responsible bidders are willing and able to compete effectively for the business; <br />3. The procurement lends itself to a firm fixed price contract and the selection of the successful <br />bidder can be made principally on the basis of price; and <br />4. No discussion with bidders is needed.21 <br />Sealed bidding is the prefened method for construction if the above conditions are present.22 If sealed <br />bidding is used, FTA Circular 4220.1D places general requirements on the advertisement, bid period, <br />bid opening, price adjudication, and contract award or rejection of bids.23 <br />If, however, a grantee decides to use the competitive proposal method of procurement, the FTA <br />prescribes requirements for publicatian including evaluation factors, solicitation, evaluation, selection, <br />and award.24 <br />For sorne agencies, state law requires the sealed bidding or competitive proposal method in procuring <br />certain ~oods or services, or in certain circumstances. <br />DISCUSSION <br />If you and your customer (using department) can specify what you need accurately enough, you <br />maybe confident you will receive a satisfactory product or service from any responsible and <br />responsive bidder. In these cases you ~can maximize price competition and simplify the process by <br />using sealed bids. E.g., supply of diesel fuel normalty fits this procurement method. <br />There are commodities and services that your customers need that are very dit~icult, if not <br />impossible, to o6tain through a seated bidding process under which award is made to the low <br />responsive responsible bidder. You may not be able to define your requirement precisely enough <br />and/or you may be concerned with performance specifications which are, by their nature, more <br />subjective than design specifications.~5 <br />There may be technical and price tr~deoffs in what you are trying to buy. You may be willing to <br />pay a somewhat higher price to obtain a commodity that does more for your system, but there is a <br />limit to what you will pay. You may find that the quantities or time required are unknown. The <br />price risk associated with a fixed price contract may be burdensome on the contractor and would <br />be borne at too high a price to the agency to use that type of contract~ Consequently, you need the <br />ability to negotiate cost elements for the contract that could resutt in a cost reimbursement type <br />contract. <br />There may be a variety of good sound business reasons why you need the abitity to negotiate a <br />contract and are willing to spend the time to do so. The competitive proposal method is a fleaible <br />procurement tool for you to use. E.g., development of a new information system to serve a unique <br />of 45 01 / 10/97 13:0924 <br />