RFP And Two-Step Solicitation Discussions

  Acquisition in public procurement by use of a Request for Proposals (RFP) (competitive negotiation) is similar in many ways to the use of an Invitation for Bids (IFB), and is also different in some respects. Both are competitive methods, are given public notice, and require sealed submissions. However, where negotiation is permitted and utilized, an RFP is the standard solicitation document. The underlying distinction between the two is that competitive sealed bidding, through an IFB, does not allow changes and negotiation to occur after the bids are opened; whereas, competitive sealed proposals, through an RFP, permits such negotiation as to both the nature of the offer and the price.

  The two-step procurement combines certain advantages of competitive negotiation and competitive sealed bidding. It is a competitive bidding method which prescribes that the technical or performance aspects of the proposed contract and the price bid be submitted separately. The performance aspects can be negotiated, individually, with each offeror whose proposal is within the range of acceptability. Subsequently, the price bids are opened, but these cannot be negotiated.

  Any of these methods: conventional competitive bidding, competitive negotiations, or two-step procurements, can be preceded by a Request for Information (RFI).

  Several things especially need to be observed in preparing an RFP or a two-step procurement solicitation:

  Opening. State and local governments normally require that offers be opened publicly. In doing so, however, only the names of the offerors are made known. No other information is given until after award of the contract.

  Non-Negotiation. It should be stated clearly that award may be made on the basis of the proposals as first submitted, without any discussion or changes. This provision can be made a part of the standard Terms and Conditions for RFPs.

  Criteria for Evaluation. The kinds of requirements usually purchased under competitive proposals tend to place lesser emphasis on price as a criterion for award than is the case with IFBs. The particular evaluation and award factors that are to apply, such as managerial and technical capabilities, comparative feasibility of the approach or plan proposals, overall cost, etc., need to be easily understood. This often is facilitated by listing or weighing the factors as to importance or using a numerical rating system in the evaluation process.

  The basic information elements that make up an RFP are virtually identical to those of an IFB. Differences are largely in terminology. For an example, the term "bid" is changed to "proposal" and "bidder" to "offeror". The other segments, including the signing of the proposal serving as a declaration of non-collusion, remain unchanged.

  Also, under RFPs and two-step solicitations, there is frequently the need for a greater number of special conditions or provisions, for presubmission conferences, and for cost analyses during the evaluation process.

  While negotiation following the opening of proposals is permissible, or even contemplated, it is not required. If one or more initial offers are fully satisfactory and advantageous, award may be made accordingly.

  Where negotiation does take place, impartiality is essential. Discussions with offerors are conducted individually. Information in a proposal is not disclosed to another offeror. A time established for "best and final" offers is adhered to, unless any extension applies equally to all, or the solicitation must be canceled.

  In the public sector the opening, negotiations, and evaluation of proposals should be governed by written rules and procedures. The principles of not allowing advantage to one competitor over another, and of not permitting the use of auction practices, apply alike to competitive proposals and to competitive sealed bidding.

©1998, Donald L. Woods, CEO
International Consulting & Contracting
All Rights Reserved