Subpart 1-2.1-Use of Formal Advertising

§ 1-2.101 Meaning of formal advertising.

Formal advertising means procurement by competitive bids and awards, as prescribed in this Part 1-2, and involves the following basic steps:

(a) Preparation of the invitations for bids, describing the requirements of the Government clearly, accurately, and completely, but avoiding unnecessarily restrictive specifications or requirements which might unduly limit the number of bidders. The term “invitation for bids" means the complete assembly of related documents (whether attached or incorporated by reference) furnished prospective bidders for the purpose of bidding.

(b) Publicizing the invitation for bids through distribution to prospective bidders, posting in public places, and such other means as may be appropriate, in sufficient time to enable prospective bidders to prepare and submit bids before the time set for public opening of bids.

(c) Submission of bids by prospective contractors.

(d) Awarding the contract, after bids are publicly opened, to that responsible bidder whose bid, conforming to the invitation for bids, will be most advantageous to the Government, price and other factors considered.

§ 1-2.102 Policy.

(a) Procurement shall be made by formal advertising whenever such method is feasible and practicable under the existing circumstances even though such conditions and circumstances would otherwise satisfy the requirements of Subpart 1-3.2. In accordance with this requirement, procurements shall generally be made by soliciting bids from all qualified sources of supplies or services deemed necessary by the contracting officer to assure full and free competition consistent with the procurement of the required property or services. Current lists of bidders shall be maintained in accordance with § 1-2.205.

(b) For requirements applicable to the pricing of modifications of formally advertised contracts see § 1-3.807-3.

(c) As directed by statute (section 310 of the Federal Property and Administrative Services Act of 1949, as amended by section 5, 79 Stat. 1303, 41 U.S.C. 260), executive agencies shall not follow the advertising procedures of sections 3709 and 3710 of the Revised Statutes, but shall comply with the advertising requirements of Title III of the Federal Property and Administrative Services Act of 1949 (hereafter in this Part 1-2 referred to as "the Act") unless otherwise authorized by law.

(d) Where an agency, acting under section 602(d) of the Act or other law, makes inapplicable to it Title III of the Act, or sections 302(c) and 303 thereof sections 3709 and 3710 of the Revised Statutes shall apply, unless by statute the agency is authorized to procure without advertising or without regard to said section 3709.

[30 FR 9592, July 31, 1965, as amended at 31 FR 348, Jan. 12, 1966]

§ 1-2.103 General requirements for formally advertised contracts.

No contract shall be deemed to have been made by formal advertising unless:

(a) Bids have been solicited as required by Subpart 1-2.2;

(b) Bids have been submitted as required by Subpart 1-2.3; and

(c) Determination has been made as to the responsible bidder (see Subpart 1-1.12) whose bid is responsive to the invitation for bids and is most advantageous to the Government, price and other factors considered, and award is made as prescribed in Subpart 1-2.4.

[29 FR 10141, July 24, 1964, as amended at 36 FR 17421, Aug. 31, 1971]

§ 1-2.104 Types of contracts.

§ 1-2.104-1 General.

Procurement contracts awarded after formal advertising shall be of the firm fixed-price type, except that fixed-price contracts with escalation may be used where some flexibility is necessary and feasible.

§ 1-2.104-2 Firm fixed-price contracts. See § 1-3.404-2.

§ 1-2.104-3 Fixed-price contracts with escalation.

Escalation clauses are not normally desirable, but in appropriate cases clauses providing for upward and downward revision of prices may be used, in accordance with § 1-3.404-3, in order to protect the interest of both the Government and contractor. In addition, where the contracting officer, on the basis of his knowledge of the market or previous advertisements for like items, expects that a requirement for firm fixed-price bids will unnecessarily restrict competition or unreasonably increase bid prices, invitation for bids may include an escalation clause approved by the agency concerned. Any escalation clause shall provide an escalation ceiling identical for all bidders so that each bidder is afforded an equal opportunity to bid on the escalation basis. In evaluating bids, see § 1-2.407-4.

§ 1-2.104-4 Indefinite delivery-type contracts.

(a) Definite quantity contracts (see § 1-3.409(a)).

(b) Requirements contracts (see § 13.409(b)).

(c) Indefinite quantity contracts (see § 1-3.409(c)).

[30 FR 9592, July 31, 1965]

§ 1-2.105 Solicitation for informational or planning purposes.

See § 1-1.314.

§ 1-2.106 Procurement management reviews.

Each agency shall maintain a procurement management review program for examining on a continuing basis the effectiveness and efficiency of its formal advertising procurement operations. Specific attention shall be given to solicitation content and form, distribution of solicitations, bidders mailing lists, review and evaluation of bids received, response rates, personnel training, and any other matters which affect meaningful competition and the overall efficiency, and economy of formal advertising.

[40 FR 2811, Jan. 16, 1975]

Subpart 1-2.2-Solicitation of Bids

§ 1-2.201 Preparation of invitations for bids.

Forms used in inviting bids are prescribed in Subparts 1-16.1 and 1-16.4. Invitations for bids shall contain the applicable information in paragraphs (a) and (b) of this § 1-2.201, and any other information required for a particular procurement.

(a) For supply and service contracts, including construction, invitations for bids shall contain the following information if applicable to the procurement involved. Additional items peculiar to construction contracts are enumerated in § 1-18.203-1(b).

(1) Invitation number.

(2) Name and address of issuing activity.

(3) Date of issuance.

(4) Date, hour, and place of opening. (Prevailing local time shall be used. See § 1-2.202-1 concerning bidding time.)

(5) Number of pages.

(6) Where required by agency procedures, requisition or other purchase authority, and appropriation and accounting data.

(7) A description of supplies or services to be furnished under each item in sufficient detail to permit full and free competition. Such description shall comply with §§ 1-1.305 and 1-1.307.

(8) The time of delivery or performance requirements (see § 1-1.316).

(9) Permission, if any, to submit telegraphic bids (see § 1-2.202-2).

(10) Permission, if any, to submit alternative bids, including alternative material or design.

(11) A statement in the invitation that "Bids must set forth full, accurate, and complete information as required by this invitation for bids (including attachments). The penalty for making false statements in bids is prescribed in 18 U.S.C. 1001."

(12) Bid guarantee, performance and payment bond requirement, if any. If a bid guarantee is required, see instructions in § 1-10.102-2.

(13) Any authorized special provisions relating to Government-furnished property proposed to be furnished for the performance of the contract.

(14) Where the contracting officer has reason to believe that Government property may be employed, a provision that if the bidder plans to use, in performing the work bid upon, any items of Government property in the bidder's possession under a facilities contract or other agreement independent of the invitation for bids, the bidder shall so state in the bid and, upon request of the contracting officer, submit evidence that a facilities contract or other separate agreement authorizes the bidder to use each item of such Government property for performing the work bid upon.

(15) When considered necessary by the contracting officer, a requirement that all bids must allow a period for acceptance by the Government of not less than a minimum period stipulated in the invitation for bids, and that bids offering less than the minimum stipulated acceptance periods will be rejected. The minimum period so stipulated should be no more than reasonably required for evaluation of bids and other preaward processing. To accomplish the foregoing, a paragraph substantially as follows may be included in the invitation for bids:

Bid acceptance period. Bids offering less than days for acceptance by the Government from the date set for opening will be considered nonresponsive and will be rejected.

(16) In unusual cases, where bidders are required to have special technical qualifications due to the complexity of the equipment being procured or for some other special reason, a statement of such qualifications.

(17) Any authorized special provisions, necessary for the particular procurement, relating to such matters as progress payments, patent licenses, liquidated damages, escalation, Buy American Act, etc.

(18) Any additional contract provisions or conditions required by law or regulation.

(19) [Reserved]

(20) If Government costs or expenditures other than bid prices are to be considered in the evaluation of bids, such factors must be identified and included.

(21) If the invitation for bids contains a price escalation clause, include

a provision reflecting the requirements of § 1-2.407-4(b).

(22) Directions for obtaining copies of any documents, such as plans, drawings, and specifications, which have been incorporated by reference.

(23) [Reserved]

(24) A statement that the Equal Opportunity clause is not applicable to contracts (i) not exceeding $10,000, (ii) where work is to be performed entirely outside the United States and no recruitment of workers within the United States is involved, (iii) for standard commercial supplies or raw materials not exceeding $100,000, or (iv) specifically exempted by the Executive Vice Chairman of the President's Committee on Equal Employment Opportunity, with the approval of the Secretary of Labor.

(25) The Atomic Energy Act of 1954, as amended, confers specified regulatory authority on the Atomic Energy Commission and authorizes the AEC to transfer certain of that authority to individual States. In general, the authority transferred to the States includes responsibility for issuing licenses for the possession and use of by-product and source materials and special nuclear material in quantities not sufficient to form a critical mass. The Commission is required to retain jurisdiction over certain activities, e.g., disposal of radioactive wastes into the ocean. Where an invitation for bids requires that the bidder have an AEC license, the invitation shall also provide that an appropriate license issued to a bidder by a State pursuant to an agreement with AEC under the provisions of Section 274 of the Atomic Energy Act of 1954, as amended, will satisfy the requirements of the invitation. As used in this § 1-2.201(a)(25), the term "State" means any State, Territory, or possession of the United States, the Canal Zone, Puerto Rico, and the District of Columbia.

(26) When the procurement involves a set-aside for labor surplus area or small business concerns, the following provision will be placed on the face of the invitation or on a cover sheet:

This is a percent set-aside for (small business) (labor surplus area) concerns.

(27) A provision in accordance with § 1-1.1605-1 concerning parent company relationship and employer identification number.

(28) The Certificate of Independent Price Determination, as required by § 1-1.317.

(29) [Reserved] (30) [Reserved]

(31) The following provision regarding the receipt and consideration of bids for award that are received after the exact time set for opening in the invitation for bids shall be placed in each solicitation:

LATE BIDS, MODIFICATIONS OF BIDS, OR
WITHDRAWAL OF BIDS

(a) Any bid received at the office designated in the solicitation after the exact time specified for receipt will not be considered unless it is received before award is made and either:

(1) It was sent by registered or certified mail not later than the fifth calendar day prior to the date specified for the receipt of bids (e.g., a bid submitted in response to a solicitation requiring receipt of bids by the 20th of the month must have been mailed by the 15th or earlier); or

(2) It was sent by mail (or telegram if authorized) and it is determined by the Government that the late receipt was due solely to mishandling by the Government after receipt at the Government installation.

(b) Any modification or withdrawal of a bid is subject to the same conditions as in (a), above. A bid may also be withdrawn in person by a bidder or his authorized representative, provided his identity is made known and he signs a receipt for the bid, but only if the withdrawal is made prior to the exact time set for receipt of bids.

(c) The only acceptable evidence to establish:

(1) The date of mailing of a late bid, modification, or withdrawal sent either by registered or certified mail is the U.S. Postal Service postmark on both the envelope or wrapper and on the original receipt from the U.S. Postal Service. If neither postmark shows a legible date, the bid, modification, or withdrawal shall be deemed to have been mailed late. (The term "postmark” means a printed, stamped, or otherwise placed impression (exclusive of a postage meter machine impression) that is readily identifiable without further action as having been supplied and affixed on the date of mailing by employees of the U.S. Postal Service. Therefore, offerors should request the postal clerk to place a hand cancellation bull's-eye "postmark" on both the receipt and the envelope or wrapper.)

(2) The quantity of supplies or services to be furnished under each item, and any provision for quantity variation.

(3) Any requirement for prior testing and qualification of a product, when the item to be purchased is on a qualified products list (see Subpart 1-1.11).

(4) When needed for the purpose of bid evaluation, pre-award surveys, or inspection, a requirement that bidders state the place (including the street address) from which the supplies will be furnished or where the services will be performed. Where it is reasonably anticipated that producing facilities will be used in the performance of the contract, or where the Government requires the information, bidders will be required to state (i) the full address of principal producing facilities (if designation of such address is not feasible, a full explanation will be required) and (ii) names and addresses of owner and operator, if other than bidder.

(5) Place and method of delivery (see § 1-2.202-3).

(6) Preservation, packaging, packing, and marking requirements, if any.

(7) Place, method, and conditions of inspection.

(8) If no award will be made for less than the full quantities advertised, a statement to that effect.

(9) If award is to be made by specified groups of items or in the aggregate, a statement to that effect.

(10) If the invitation for bids gives the Government an option to increase or decrease quantities specified a statement of the maximum percentage of such increase or decrease.

(11) Any applicable requirements for samples or descriptive literature (see §§ 1-2.202-4 and 1-2.202-5).

(12) Any requirement for preproduction samples or tests, including a statement that the Government reserves the right to waive the requirement as to those bidders offering a product which has been previously procured or tested by the Government, and a statement that bidders offering such products, who wish to rely on such prior procurement or test, must furnish with the bid information from which it may be clearly established that prior Government approval is presently appropriate for the pending procurement.

[29 FR 10141, July 24, 1964, as amended at 30 FR 2208, Feb. 18, 1965; 30 FR 9592, July 31, 1965; 33 FR 3064, Feb. 16, 1968; 33 FR 14287, Sept. 21, 1968; 38 FR 9508, Apr. 17, 1973; 38 FR 26913, Sept. 27, 1973; 39 FR 34664, Sept. 27, 1974; 40 FR 44138, Sept. 25, 1975; 42 FR 33736, July 1, 1977; 43 FR 31331, July 21, 1978]

(a) Policy. Consistent with the needs of the Government for obtaining the supplies or services, all invitations for bids shall allow sufficient bidding time (i.e., the period of time between the date of distribution of an invitation for bids and the date set for opening of bids) to permit prospective bidders to prepare and submit bids. This will facilitate competition on reasonable and equal terms. Undue limitation of bidding time tends to restrict competition. Also, when prospective bidders do not have adequate time for computing prices and obtaining needed information on which to base their bids, higher prices to the Government may result from inclusion of unnecessary contingency allowances or the unwillingness of some to submit bids.

(b) Factors to be considered. The urgency of the Government's need for the items or services, the complexity of the invitation, the extent of subcontracting anticipated, the use of pre-invitation notices, the geographic distribution of bidders, the normal time for mail transmission of both invitations and bids, and other related factors, must be considered in establishing bidding time. For example, a bidding time of 30 days may be inadequate when bidders are required to prepare special drawings, designs, and samples, or to obtain quotations from several suppliers and subcontracts, as frequently is the case in construction and production contracts. Conversely, a bidding time of 15 days may be adequate when bids would reasonably be expected to be based on stocks-on-hand, or current regular production, or service personnel and facilities regularly available (as in the case of maintenance and repair of structures, and similar work).

(c) Minimum bidding time. As a general rule, bidding time shall be not less than 20 calendar days when procuring standard commercial articles and services and not less than 30 calendar days when procuring other than standard commercial articles or services. (Where brand name or equal purchase descriptions are used involving a modification of the brand name product, see § 1-1.307-4 of this chapter.) This rule need not be observed in special circumstances or where the urgency of the need for the supplies or services does not permit such delay. Procurement activities shall develop procedures for ensuring that these bidding time requirements are observed.

[29 FR 10141, July 24, 1964, as amended at 36 FR 288, Jan. 8, 1971; 40 FR 2811, Jan. 16, 1975]

§ 1-2.202-2 Telegraphic bids.

(a) As a general rule, telegraphic bids will not be authorized. However, when in the judgment of the contracting officer the date set for opening of bids will not allow bidders sufficient time to prepare and submit bids on the prescribed forms or when prices are subject to frequent changes, telegraphic bids may be authorized. When such bids are authorized the invitation for bids shall require the bidder to in