Question

Discuss the main differences between Sealed Bidding (FAR Part 14) and Contracting by Negotiations (FAR Part 15)? Describe one product/service that you would purchase under Sealed Bidding and one product/service that you would purchase under Contracting by Negotiation. ( This is part of Procurement and Acquisition)

Answer 1

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ans:-

Sealed bidding constitutes the following steps:

1. Preparation of bid invitation documents

2. Informing the stakeholders about the issuance of bid invitation

3. Receiving bids in sealed covers from more than 1 bidder (in many cases it is more than 2 bidders)

4. Opening and evaluation of bids

5. Award of contract

While on the other hand when a contract award is given without sealed bidding process, it is contracting by negotiations.

Contract by negotiation is generally done when there is definity of service, quality and price based on history or performance. This also happens when there are no other competent technically qualified bidders available. In this negotiations are done for price, specifications, delivery and payment terms. Once all aspects are mutually agreed, contract is awarded.

An example of purchase under sealed bidding would involve fighter jets by any of world governments. While direct contract may be given for purchase of passengers jets of specific capacity or requirement. Fighter jets are produced by a number of countries including US, Britain, France, Sweden, Russia and China. Sealed bidding process would be most suitable for this. In case of passenger jets, only Boeing and Airbus manufacture on a large scale and have planes with varied capacities. An airline deciding to buy new planes generally pre-decides either for Airbus or Boeing and then goes for negotiation and direct contract.