Low Bid Versus Best Value

Two Ways The Government Picks A Winner

• Sealed bidding (low bid): the government asks for bids with an Invitation for Bids (IFB). Award goes to the responsible bidder whose bid follows the IFB and is most advantageous, "considering only price and the price-related factors included in the invitation" (FAR 14.101(e)).
• Negotiation (best value): the government asks for proposals with a Request for Proposals (RFP) under FAR Part 15. FAR 15.101 calls this a "best value continuum." Price can count a lot or a little, depending on the buy.

Low Bid: Responsive And Responsible

• Responsive means the bid follows the IFB. "To be considered for award, a bid must comply in all material respects with the invitation for bids" (FAR 14.301(a)).
• "Any bid that fails to conform to the essential requirements of the invitation for bids shall be rejected" (FAR 14.404-2(a)). So are bids that add conditions changing the IFB's terms (FAR 14.404-2(d)), and bids missing a required bid guarantee, with limited exceptions (FAR 14.404-2(j)).
• Responsible means the bidder meets the standards in FAR 9.104 (FAR 2.101).
• Bids are evaluated without discussions (FAR 14.101(d)). The bid you send is the bid they judge.

Best Value: Tradeoff Or LPTA

• Tradeoff: used "when it may be in the best interest of the Government to consider award to other than the lowest priced offeror or other than the highest technically rated offeror" (FAR 15.101-1(a)). The government can pay more for a better proposal, but "the perceived benefits of the higher priced proposal shall merit the additional cost," and the reasons are written down (FAR 15.101-1(c)).
• Lowest price technically acceptable (LPTA): award goes to the lowest evaluated price among the proposals that meet the acceptability standards. "Tradeoffs are not permitted," and proposals "are evaluated for acceptability but not ranked" (FAR 15.101-2(b)).
• Outside the Department of Defense, LPTA may only be used when the conditions in FAR 15.101-2(c) are met, and agencies are told to avoid it, as far as they can, for information technology, cybersecurity, and other knowledge-based professional services, among others (FAR 15.101-2(d)).

How To Tell Which One You Have

1. An IFB with a public bid opening is sealed bidding.
2. On an RFP, read Section M or the evaluation provision. It must say whether the factors other than price, put together, are significantly more important than price, about equal to price, or significantly less important than price (FAR 15.304(e)).
3. If it says award goes to the lowest priced proposal that is technically acceptable, it is LPTA.

What To Do Differently

• Low bid: make the bid responsive first, then sharpen the price. Every required form, every signature, the bid guarantee if one is required, and the bid opening time.
• LPTA: meet every acceptability standard, plainly and completely, then sharpen the price. Proposals are not ranked, so extras beyond the standard earn no extra credit.
• Tradeoff: show strengths tied to each factor in Section M, with proof. Price still counts, in the weight the solicitation states.

The FAR Overhaul

In the overhauled Part 15 text that some agencies use by deviation, the tradeoff approach is at 15.103-1, LPTA is at 15.103-2, and a third approach is added at 15.103-3: the highest technically rated proposal with a fair and reasonable price. Read what your solicitation says.

How GradeTheBid Helps

GradeTheBid finds how the winner will be picked and the page that says so. For a low-bid IFB it runs the Responsiveness Check: a pass or fail check of every form, signature, bond, insurance certificate, addendum, and the deadline. For best value it gives a grade with a fix list.