The world of Government Contracting can be very confusing. Together with its hundreds of rules and regulations are the acronyms.
Let’s go through four of the primary and common procurement methods that are governed by the Federal Acquisition Regulations (FAR); these are the methods the federal government uses to acquire goods and services.
- Contracting by Negotiation
In negotiated procurements, the government can open acquisition to any eligible or to specific number of offerors.
It starts with the government creating an RFP or Request for Proposals; this includes the contractors that can offer a proposal and the agency’s needs.
This way of contracting allows the government agency to negotiate with the offerors and vice versa before an award is finalized.
This procurement is governed by FAR part 15.
- Sealed Bidding.
First, the government agency creates a document that accurately, completely, and clearly describes their needs without being restrictive. This is called the IFB or Invitation for Bids.
Second, the Invitation for Bids is publicized to bidders. Enough time is provided for contractors to submit their bids.
Third, the federal contractors will then submit sealed bids. These bids will not be opened until the deadline for bids has passed. Afterward, the bids will be opened, reviewed, and evaluated against each other without talking to the bidders.
Lastly, the agency decides and awards the contract to the bidder with the best deal for the government.
Learn more on this procurement method through FAR Part 14
- Federal Supply Schedules
The Federal Supply Schedule program is also called General Services Administration Schedules Program or the Multiple Award Schedule Program. This is governed by FAR subpart 8.4. https://www.acquisition.gov/far/subpart-8.4
This is done to provide agencies a process to obtain commercial supplies and services at volume pricing. Indefinite contracts are given to contractors for the price at a given period of time.
The contractors must provide an Authorized Federal Supply Schedule Pricelist containing supplies, and services that the contractor offers, as well as pricing and terms.
- Simplified Acquisition
Here, the government will issue a Request for Quotation (RFQ) containing what they are looking for. Then vendors will submit quotations to complete the work.
This process is limited by the simplified acquisition threshold.
The contracting officer will award the contract once it is determined which price is fair and reasonable. Basing this on market research, comparison, current price catalogs, and similar items in the industry.
Make sure to head on over to FAR part 13 for a deeper understanding of this acquisition procedure. https://www.acquisition.gov/far/part-13
Understand that we have outlined four common government contracting procurement methods, and it has been done in a very concise and simplified way. If you need a deeper understanding and some helping explanations, contact us at Peter Witts CPA. We’ll be ready to shed some light on these procedures for you.