§ 1-2.407 Award.

§ 1-2.407-1 General.

Unless all bids are rejected, award shall be made by the contracting officer by written notice, within the time for acceptance specified in the bid or extension thereof, to that responsible bidder whose bid, conforming to the invitation for bids, will be most advantageous to the Government, price and other factors considered. (For discussion of other factors to be considered, see § 1-2.407-5.) Award shall not be made until all required approvals have been obtained. Awards shall be made by mailing or otherwise furnishing to the successful bidder a properly executed award document or notice of award. When an advance notice of award is issued, it shall be followed as soon as possible by the formal award. When more than one award results from any single invitation for bids, separate award documents shall be executed, each suitably numbered. When an award is made to a bidder for less than all the items which may be awarded to that bidder and additional items are being withheld for subsequent award, the first award to that bidder shall state that the Government may make subsequent awards on such additional items within the bidder's bid acceptance period. All provisions of the invitation for bids, including any acceptable additions or changes made by a bidder in the bid, shall be clearly and accurately set forth (either expressly or by reference) in the award document, since the award is an acceptance of the bid, and the bid and the award constitute the contract.

§ 1-2.407-2 Responsible bidder.

Before awarding the contract, the contracting officer shall determine that a prospective contractor is responsible (see § 1-1.310).

§ 1-2.407-3 Discounts.

(a) Prior to issuing an invitation for bids (except one for construction), a determination shall be made as to what minimum period for prompt payment discounts will be considered in the evaluation of bids and such minimum period shall be stated in the invitation for bids. In determining the minimum period for a particular procurement, consideration shall be given to:

(1) The place of delivery, inspection,

and acceptance in relation to the place of payment of invoices or vouchers.

(2) The number of days required to process invoices or vouchers from receipt through payment in the normal course of business.

(3) The need for prolonged acceptance testing or other unusual circumstances tending to retard the normal processing of invoices or vouchers.

Generally, the minimum period will be expressed in multiples of ten days; e.g., "ten calendar days," "twenty calendar days," or "thirty calendar days," since these time intervals coincide with the discount terms generally offered by industry.

(b) In determining which of several bids received is the lowest, any discount offered shall be deducted from the bid price on the assumption that the discount will be taken, unless the discount offered is for a lesser period than the minimum number of days specified in the invitation for bids. (See § 1-2.407-3 (a).) In evaluating equal bids offering discounts meeting the minimum discount period required by the invitation, a bid offering a longer discount period shall not be considered as being more advantageous to the Government. If a bid offers a prompt payment discount, but fails to specify the period in which the discount may be taken, the discount may be considered since award to the bidder gives the Government the right to deduct the discount from any payment made with reasonable promptness.

(c) If a bid offers a prompt payment discount for a period less than that specified in the invitation for bids, the discount shall not be considered in the evaluation of bids. If a bid would have been the lowest bid received if the discount offered were considered, but award is not made thereon because the offered discount cannot be considered, a notation to that effect shall be made upon the abstract or record of bids and on Standard Form 1036 (Statement and Certificate of Award) if used (see § 1-2.407-7).

(d) In any case, the offered discount of the successful bidder shall form a part of the award, whether or not such discount was considered in the evaluation of its bid, and such discount shall be taken if payment is made within the discount period.

§ 1-2.407-4 Price escalation.

(a) Where an invitation for bids does not contain a price escalation clause, bids

received which quote a price and contain a price escalation provision, with a ceiling (usually expressed in terms of a maximum percentage increase) above which the price will not escalate, will be evaluated on the maximum possible escalation of the quoted base price. Bids which contain escalation with no ceiling shall be rejected unless a clear basis for evaluation exists.

(b) Where an invitation for bids contains a price escalation clause and no bidder takes exception to the escalation provisions, bids shall be evaluated on the basis of the quoted prices without the allowable escalation being added. Where a bidder increases the maximum percentage of escalation stipulated in the invitation for bids or limits the downward escalation provisions of the invitation, the bid will be rejected as nonresponsive. Where a bidder deletes the escalation clause from its bid, the bid will be rejected as nonresponsive since the downward escalation provisions are thereby limited. Where a bidder decreases the maximum percentage of escalation stipulated in the invitation for bids, the bid shall be evaluated at the base price on an equal basis with bids that do not reduce the stipulated ceiling. However, if after evaluation, the bidder offering the lower ceiling is in a position to receive the award, the award shall reflect the lower ceiling.

§ 1-2.407-5 Other factors to be considered.

The factors set forth in paragraphs (a) through (f), of this section, among others, may be for consideration in evaluating bids for award.

(a) Foreseeable costs or delays to the Government resulting from differences in inspection, location of supplies, transportation, etc.

(b) Changes made or requested by the bidder in any of the provisions of the invitation for bids to the extent that any such change does not constitute ground for rejection of the bid under the provisions of § 1-2.404.

(c) Advantages or disadvantages to the Government that might result from making more than one award.

(d) Qualified products (see Subpart 1-1.11).

(e) Local, State, and Federal taxes (see Part 1-11).

(f) Origin of supplies, whether domestic or foreign, and, if foreign, the application of the Buy American Act or any

other prohibition on foreign purchases (see Part 1-6).

§ 1-2.407-6 Equal low bids.

(a) In furtherance of the small business and labor surplus area policies set forth in Subparts 1-1.7 and 1-1.8, award shall be made in accordance with the following order of priority when two or more low bids are equal in all respects (taking into consideration cost of transportation, cash discounts, and any other factors properly to be considered):

(1) Certified-eligible concerns (as defined in § 1-1.801-1(a)) that are also small business concerns.

(2) Other certified-eligible concerns. (3) Persistent labor surplus area concerns (as defined in § 1-1.801-1(b)) that are also small business concerns (as defined in Subpart 1–1.7).

(4) Other persistent labor surplus

area concerns.

(5) Substantial labor surplus area concerns (as defined in § 1-1.801(c)) that are also small business concerns. (6) Other substantial labor surplus area concerns.

(7) Other small business concerns.
(8) Other concerns.

(b) If the application of (a) of this § 1-2.407-6 results in two or more bidders being eligible for award and such bidders are not small business concerns, the award shall be made to the bidder who will make the most extensive use of small business subcontractors. If two or more bidders still remain equally eligible for award, award shall be made by a drawing by lot limited to such bidders. If time permits, the bidders involved shall be given an opportunity to be present at the drawing by lot. Such drawing shall be witnessed by at least three persons, and the contract file shall contain the names and addresses of those witnesses.

(c) In each award where preference is to be given under this section, the contracting officer shall, prior to award, obtain from such concern a written statement that it will perform, or cause to be performed, the contract in accordance with the circumstances justifying the priority.

[29 F.R. 10141, July 24, 1964, as amended at 32 F.R. 18049, Dec. 16, 1967]

§ 1-2.407-7 Statement and certificate of award.

(a) In connection with each contract made by formal advertising, the contracting officer shall include in the con

tract file evidence of compliance with § 1-2.103. Where required by agency procedures pursuant to General Accounting Office regulations, Standard Form 1036 (Statement and Certificate of Award) shall be used for this purpose. Where the preparation of Standard Form 1036 is not required, information of a similar nature (hereinafter referred to as the certificate) shall be filed with the General Accounting Office copy of the contract.

(b) The certificate shall either state that the accepted bid was the lowest bid received, or list all lower bids and set forth reasons for their rejection. These reasons shall be set forth in such detail as is necessary to justify the award. For the purpose of this certificate, the lowest bid received is considered to be that bid which is lowest after a consideration of price factors only. The cost of transportation to the destination indicated in the invitation for bids, any acceptable discount offered by a bidder, and if the invitation so specifices any other Government cost factor, shall be considered price factors in determining the lowest bidder for purposes of this certificate. In each case where an award is made after receipt of equal low bids, the certificate shall set forth the manner in which the tie was broken. Where an award involves a mistake in bid and the matter has been resolved by administrative action, a copy of the bidder's verification in the case of an apparent mistake, or the written administrative determination concerned, shall be attached to the certificate. Where an award involves a mistake in bid on which the Comptroller General has rendered a decision, the certificate shall contain a citation by number and date of the decision and a copy thereof shall be attached to the certificate.

§ 1-2.407-8 Protests against award.

(a) General. Contracting officers shall consider all protests or objections to the award of a contract, whether submitted before or after award. If the protest is oral and the matter cannot otherwise be resolved, written confirmation of the protest shall be requested. The protester shall be notified in writing of the final decision on the written protest. Where protests against award are submitted directly to the General Accounting Office, GAO will inform the contracting agency of the protest and request a report on the matter. Agencies shall forward such

reports to GAO as expeditiously as practicable. To facilitate these submissions, agencies shall furnish GAO with the name, title, and telephone number of one or more officials (in both field and headquarters offices, if desired) which GAO may contact regarding protests. Each agency shall be responsible for promptly advising GAO of any change in such designated officials. As a further means of expediting these submissions, agencies may provide for reports to be forwarded directly to GAO by the office handling the contract without reference to the headquarters office of the agency.

(b) Protests before award. If award has not been made, the contracting officer may require that written confirmation of an oral protest be submitted by a specified time and inform the protester that award will be withheld until the specified time. If the written protest is not received by the time specified, the oral protest may be disregarded and award may be made in the normal manner unless the contracting officer, upon investigation, finds that remedial action is required, in which event such action shall be taken.

(1) In appropriate cases, notice of a protest will be given to bidders affected thereby. For example, when a protest against the making of an award is received and the contracting officer determines to withhold the award pending disposition of the protest, each bidder to whom award is proposed and each bidder whose bid might become eligible for award should be informed of the protest and requested, before expiration of the time for acceptance of their bids, to extend the time for acceptance (with consent of sureties, if any) in order to avoid the need for readvertisement. In the event of failure to obtain such extension of bids, then consideration should be given to proceeding with award under (b) (3) of this section.

(2) Where a protest has been lodged with the procuring agency, the views of the Office of the Comptroller General regarding the protest should be obtained before award whenever such action is considered to be desirable. Where it is known that a protest against the making of an award has been lodged directly with the Comptroller General, a determination to make award under (b) (3) of this section must be approved at an appropriate level above that of the contracting officer, in accordance with agency procedures. While award need

not be withheld pending final disposition by the Comptroller General of a protest, a notice of intent to make award in such circumstances shall be furnished the Comptroller General, and formal or informal advice should be obtained concerning the current status of the case prior to making the award.

(3) Where a written protest against the making of an award is received, award shall not be made until the matter is resolved, unless the contracting officer determines that:

(i) The items to be procured are urgently required; or

(ii) Delivery or performance will be unduly delayed by failure to make award promptly; or

(iii) A prompt award will otherwise be advantageous to the Government. If award is made under (i), (ii) or (iii) above, the contracting officer shall document the file to explain the need for an immediate award, and shall give written notice of the decision to proceed with the award to the protester and, as appropriate, to others concerned.

(c) Protests after award. A protest received after award shall be handled in accordance with agency procedures. [29 F.R. 10141, July 24, 1964, as amended at 33 F.R. 10930, Aug. 1, 1968]

§ 1-2.408 Information to bidders.

(a) (1) Where award is made to other than the low bidder, the contracting activity shall as a minimum notify the unsuccessful lower bidders promptly of the fact that their bids were rejected. Where the contracting officer has reason to believe that an unsuccessful lower bidder may protest the rejection of his bid, the notification to the bidder also should state in general terms the reason for rejection.

(2) Notification of rejection also shall be given to any unsuccessful higher bidder where the circumstances were such that he may have had reason to believe he might receive an award, e.g., the bidder was requested to extend his bid acceptance time or clarify his bid, or the bidder knew that his bid was the lowest received by bid opening time (but the lower successful bid was received late).

(3) In addition to the requirements of subparagarphs (1) and (2) of this paragraph, notification of rejection should be given to all other unsuccessful bidders when feasible.

(b) Notification to unsuccessful bidders may be accomplished either orally, or in writing through the use of a form postal card, self-mailer, or other appropriate means. When giving such notification, the contracting activity also should extend to each bidder its appreciation for the interest the bidder has shown in submitting a bid.

(c) If additional information is requested by unsuccessful bidders, the contracting activity shall furnish them with the name and address of the successful bidder, together with the contract price, and should also inform them as to the location where a copy of the abstract of bids is available for inspection. However, when numerous awards have been made and furnishing such information would require so large an amount of work as to interfere with the normal operations of the contracting activity, only information concerning the location of the abstract of bids need be given. In addition, if the request is made by an unsuccessful bidder whose bid price was lower than that of the successful bidder, sufficient information shall be furnished in the reply to fully explain the basis for the award.

(d) If a request is received from an inquirer who is neither a bidder nor a representative of a bidder, the purchasing activity may furnish the names of the successful bidders and, if requested, the prices at which awards were made. However, where the furnishing of this information in response to such requests would unduly interfere with the normal operations of the purchasing activity, the inquirer will be advised where a copy of the abstract of bids is available for inspection.

[30 F.R. 9593, July 31, 1965]

§ 1-2.409 Synopses of contract awards. See § 1-1.1004.

Subpart 1-2.5-Two-Step Formal Advertising

elimination of potentially qualified producers from the competitive base.

(b) Two-step formal advertising is conducted in two phases. The first step consists of the request for, and the submission, evaluation, and, if necessary, discussion of a technical proposal, without pricing, to determine the acceptability of the supplies or services offered. As used in this context, the word "technical" has a broad connotation and, among other things, includes engineering approach, special manufacturing processes, and special testing techniques. Also, when required to clarify basic technical requirements, other related requirements such as management approach, manufacturing plan, or facilities to be utilized may be clarified in this step. The second step consists of a formally advertised procurement, confined to those offerors who submitted an acceptable technical proposal in Step One.

(c) This method of procurement requires that the contracting officer work closely with technical personnel and rely on their specialized knowledge in determining the technical requirements of the procurement and the criteria to be used in evaluating technical proposals, and in making such evaluation. An objective of the two-step procedure is to permit the development of a sufficiently descriptive statement of the Government's requirements, including the development of a technical data package, so that subsequent procurements may be made by conventional formal advertising. § 1-2.502

Conditions for use.

The two-step formal advertising method of procurement may be used when its use has been approved at a level higher than the contracting office and when all of the following conditions are present:

(a) Available specifications or purchase descriptions are not sufficiently definite or complete to permit full and free competition without engineering evaluation and necesary discussion of the technical aspects of the requirement to insure mutual understanding between each source and the Government.

(b) Definite criteria exist for evaluating technical proposals, such as applicable design, manufacturing, testing, and performance requirements, and special requirements for operational suitability and ease of maintenance; however, such criteria shall not include consideration

of capacity or credit as defined in § 1-1.708 of this chapter.

(c) More than one technically qualified source is expected to be available both initially and after technical evaluation.

(d) A firm fixed-price contract or a fixed-price contract with escalation (see § 1-2.201(a)(21)) will be used. § 1-2.503 Procedures.

§ 1-2.503-1 Step One.

(a) Requests for technical proposals. A request for technical proposals shall be distributed to qualified sources in accordance with § 1-1.302-1 of this chapter. In addition, the request shall be synopsized in accordance with Subpart 1-1.10 and publicly posted in accordance with § 1-2.203-2. The request may be in the form of a letter and shall contain, as a minimum, the following information:

(1) The best practicable description of the supplies or services required.

(2) Notification of the intent to conduct the procurement in two steps and the actions involved.

(3) The requirements of the technical proposal, i.e., the necessary details such as drawings, data, presentation, etc., to be submitted.

(4) The criteria for evaluating the technical proposal (§ 1-2.502(b)).

(5) A statement that the technical proposals shall not include prices or pricing information.

(6) The date by which the proposal must be received.

(7) A statement that the Government may discuss the technical aspects of the proposal with the concern submitting the proposal.

(8) A statement that in the second step of the procurement only bids based upon technical proposals determined to be acceptable, either initially or as a result of discussions, will be considered for award; and that each bid in the second step must be based on the bidder's own technical proposal.

(9) A statement that sources submitting unacceptable technical proposals will be so notified upon completion of the technical evaluation.

(10) A statement either that only one technical proposal may be submitted by each offeror or that multiple technical proposals may be submitted. When compliance with specifications permit utilization of essentially different technical approaches, it is generally in the interest of the Government to authorize