Government Proposals and Sealed Government Bids

Before you begin to tackle government bids, you need to thoroughly understand government proposals and the procurement process. Every city, state, and county buys a bit differently, which complicates life for vendors. Still, there is one procurement system from which many local governments borrow government contracting procedures, rules, and regulations: the federal government’s.

The following is a government-contracting-minded overview of the federal buying process, which should give you an understanding of some of the most basic procurement methods: government bids and government proposals. You’ll find this contracting framework mirrored across the country.

Government Bids: Sealed Bids

Sealed government bids are typically used to procure high-dollar items that have easily definable characteristics. Finding the lowest price is the chief concern in the sealed government bid process. Here’s an overview of the process for sealed government bids:

• An Invitation for Bids (IFB) is advertised.
• Companies prepare and submit competitive government bids.
• A contracting official opens all sealed bids at an appointed time, reads them aloud and records them. Interested parties can view all the government bids at this time, although they don’t have access to bidders’ financial data and other proprietary information.
  The contract is awarded to the company with the lowest bid. The government contracting process doesn’t end here, however. Government contracting officials must then make sure that the lowest bidder is both “responsive” and “responsible.” In a nutshell, officials assess responsiveness by whether companies submit their government bids on time and according to the instructions and requirements of the IFB. Officials gauge a bidder’s level of responsibility by whether the company has the means to fulfill all the government contract requirements.
• The process may seem straightforward, but strict rules apply, and compiling government bids can be a tedious process.

Government Proposals

Government agencies typically issue a request for proposals (RFP) when the award will be based on factors other than just price. Like sealed bids, government proposals are usually used for larger purchases.

Government proposals often allow businesses and government contracting officials to bargain over details before a contract is awarded. Depending on the size and complexity of the purchase, negotiations may include discussion of price, schedule, technical requirements, type of contract, and other contract terms. Government proposals are much more detailed than bids.

How the government proposal process works:

• Government contracting officials issue a request for proposals (RFP) that contains all the information necessary for companies to prepare their pitch.
• Companies submit government proposals, paying special attention to factors specified in the government RFP, such as required work plan, staffing and other criteria.
• Government contracting officials review proposals and select those deemed competitive enough to continue in the negotiation process.
• Negotiations begin. Government contracting officials and businesses discuss specific aspects of proposals, such as areas where the proposals don’t meet government needs.
• Companies may be invited to submit revised offers, taking into account concerns raised during negotiations.
• Government proposals are reviewed. The contracting officials look for the proposal that provides the best value.
• Before the contract is awarded, the government determines whether the would-be contractor is “responsible” — i.e. possessing the facilities, quality assurance, financial backing, etc., to satisfy the government contract.