Subpart 514.2 - Solicitation of Bids

Parent topic: Part 514 - Sealed Bidding

514.201 Preparation of invitations for bids.

514.201-1 Uniform contract format.

Include the following notice in each solicitation:

“The information collection requirements contained in this solicitation/contract, are either required

by regulation or approved by the Office of Management and Budget pursuant to the Paperwork

Reduction Act and assigned OMB Control No.3090-0163.”

514.201-2 Part I—The Schedule.

(a) When using Standard Form 33, Solicitation, Offer and Award, include the following cautionary

notice:

“Notice to Bidders—Use Item 13 of the Standard Form 33, Solicitation, Offer and Award, to offer

prompt payment discounts. The Prompt Payment clause of this solicitation sets forth payment terms.

Do not insert any statement in Item 13 that requires payment sooner than the time stipulated in the

Prompt Payment clause (See FAR 52.232-25, 52.232-26, or 52.232-27, as applicable). EXAMPLE: If

you insert “NET 20” in Item 13, GSA will reject your bid as nonresponsive because the entry

contradicts the 30 day payment terms specified in the Prompt Payment clause.”

(b) When using other authorized forms (e.g., Standard Form 1447, Solicitation/Contract; Standard

Form 1449, Solicitation/Contract/Order for Commercial Products and Commercial Services), include

the notice in paragraph (a) of this section. Change the reference to the form number, form title, and

item number accordingly.

514.201-6 Solicitation provisions.

Insert the provision at 552.214-70, “All or None” Bids, in invitations for bids when reserving the

right to evaluate and make an award on an all or none basis.

514.201-7 [Reserved]

514.201-70 GSA Form 1602.

The contracting officer may use GSA Form 1602, Notice Concerning Solicitation, to do any of the

following:

(a) Describe the type of contract, the duration of the contract, and the type of supplies or services
being procured.

(b) Direct the attention of prospective bidders to review and carefully consider the information at

FAR 14.404-2 that may result in rejection of the bid. In addition, cite any special requirements

which, if overlooked, may result in rejection of the bid.

(c) Highlight significant changes from previous solicitations covering the same supplies or services.

(d) Include other special notices, as appropriate.

514.202 General rules for solicitation of bids.

514.202-4 Bid samples.

(a) Requirements for samples in invitations for bids .

(1)When bid samples are required, the contracting officer shall require bidders to submit samples

produced by the manufacturer whose products will be supplied under the contract.

(2)The FAR limits use of bid samples to cases where the contracting officer cannot describe some

characteristics of a product adequately in the specification or purchase description. This usually

applies to subjective characteristics. The contracting officer may determine that there is a need to

examine objective characteristics of bid samples to determine the responsiveness of a bid. The

contracting officer should base the determination on past experience or other valid considerations.

In the solicitation, separately list “Subjective Characteristics” and “Objective Characteristics.”

(3) Insert the provision at 552.214-72, Bid Sample Requirements, in invitations for bids if bid

samples are required. This provision may be modified to fit the circumstances of a procurement.

(b) Handling bid samples.

(1)Samples from accepted bids must be retained for the period of contract performance. If there are

no outstanding claims regarding the contract, the contracting officer may authorize disposal of the

samples at the end of the contract term following the bidder’s instructions.

(2)If the contracting officer anticipates a claim regarding the contract, the contracting officer shall

require that the bid samples be retained until the claim is resolved.

(3)The contracting officer shall require that samples from unsuccessful bids be retained until award.

After award, these samples may be disposed of following the bidder’s instructions.

514.202-5 Descriptive literature.

Requirements for Invitations for bids. When using brand name or equal purchase descriptions, the

provision at FAR 52.211-6 satisfies the requirement for descriptive literature.
514.211 Release of acquisition information.

Before award, the contracting officer and all other members of the acquisition team must limit

access to information concerning the Government cost estimate to Government personnel whose

official duties require knowledge of the estimate and to non-Government personnel with a need to

know and who have signed a non-disclosure agreement (contracting officers may tailor the nondisclosure agreement at Figure 1 for these purposes). After award, the contracting officer may

reveal the total amount of the Government estimate upon request. The contracting officer is not

authorized to release the basis for calculating the estimate at any time.

514.270 Aggregate awards.

514.270-1 Definition.

“Aggregate award” means an arrangement whereby two or more separately priced line items are

combined for award to that bidder whose bid will result in the lowest overall cost to the Government

for the line items as a group. The individual price for each item does not have to be the lowest bid

received. (See also the definition of a “line item” in FAR 2.101 .)

514.270-2 Justification for use.

(a) GSA usually solicits prices and reserves the right to make award for individual line items. In

some cases it serves GSA’s best interest to combine two or more line items for an aggregate award.

Such cases include when:

(1) Users desire uniformity of design, style, and finish, (e.g.,suites of household furniture).

(2) The articles will be assembled and used as a unit, and different manufacturers’ components may

not be interchangeable.

(3) Users have high demand for certain articles, but demand for related articles is insufficient to

attract competitive bids (e.g..,various sizes of socket wrenches).

(4) Awarding the low-demand articles in conjunction with the high-demand articles may encourage

competition.

(5) One location (delivery point) has a large requirement, and another location has a requirement

too small to individually attract competitive bids.

(6) Awarding and administering numerous small contracts for similar articles or services is

impractical.

(b) Before deciding to combine items for aggregate award, the contracting officer should consider

the following factors:

(1) The capability of bidders to furnish the types and quantities of supplies or services in the

aggregate.
(2) How grouping delivery points will affect bidders.

(3) Which combinations will accurately project the lowest overall cost to the Government.

(c) The contracting officer should not use an aggregate award if it will significantly restrict the

number of eligible bidders.

514.270-3 Evaluation factors for award.

The solicitation should clearly state the basis for evaluating bids for aggregate award, require

bidders to submit a price on each item within the group or a percentage to be added or subtracted

from a list price, and advise bidders that failure to submit prices as required within a group makes a

bid ineligible for award for that group.

514.270-4 Grouping line items for aggregate award.

(a) Supplies and services. This subsection applies to acquisitions of supplies and services.

(b) Effect on competition. Provide for full and open competition when grouping items for award.

Grouping items for award may preclude a significant number of firms from bidding. This occurs if

firms are unable to provide all the types or quantities of supplies or services, or make deliveries to

the various delivery points included in the prospective aggregate group.

(c) Grouping different articles. Include only related articles in an aggregate group. Related articles

are those normally manufactured or produced by a majority of prospective bidders. Grouping

unrelated articles often restricts competition unnecessarily.

(d) Grouping geographic locations or delivery points. Consider the following guidelines before

deciding to group different geographic locations or delivery points:

(1) A delivery point may have sufficient requirements so that individual shipments involve economic

production runs and carload or truckload quantities. In this case, list it as a separate line item.

(2) The types of bidders (i.e.,small or large firms, manufacturers or distributors, etc.) who

responded to previous solicitations can provide important information. For example, if previous

bidders are distributors with franchises in certain territories, grouping different territories could

tend to restrict competition.

(3) Transportation costs can affect competition and pricing. They may constitute a significant

portion of the total delivered cost. Obtain the advice and assistance of transportation specialists

before grouping geographic locations or delivery points. Depending upon the supplies being

acquired:

(i) Grouping widespread geographic locations or delivery points may reduce competition or result in

higher prices. It can cause the loss of “area pricing” advantages provided by a supplier with a single

production point.

(ii) Conversely, for many small commercial products(hand tools, locks), manufacturers may quote

the same price for delivery anywhere in the U.S.
(iii) Tariff boundaries can also affect how manufacturers price deliveries to different areas.

514.270-5 Evaluation methodologies for aggregate awards.

(a) Definite quantity contracts without options. For definite quantity contracts without options, the

evaluated bid price is the total bid price, as adjusted for any price-related factors identified in the

solicitation. This reflects the actual cost to the Government and will identify the most advantageous

bid.

(b) Indefinite quantity contracts, requirements contracts, and options. Indefinite quantity and

requirements contracts use estimated quantities. Options involve the probability of whether and

when the options will be exercised. These situations may result in unbalanced bids (see FAR

15.404-1(g)), leading to inaccurate evaluation of the projected cost and award to other than the most

advantageous bid. To avoid unbalanced bids, GSA has two preferred methods for evaluating bids for

aggregate awards: weight factors and price list.

(1) Weight factors method. Assign a weight to each item in a group. The weight is based on the

portion of quantities that item represents. To evaluate bids, multiply each unit price by its weight

factor, then total the results.

(2) Price list method. Establish prices for bidders to use as a base for preparing their bids. Prepare a

list that identifies a base price for each item in a group. Bidders bid a percentage factor to add to or

subtract from the base price.

514.270-6 Guidelines for using the weight factors method.

(a) Use the weight factors method when there are reliable estimates for the quantities needed in an

acquisition. Reliable estimates of quantities form the foundation for:

(1) Accurate evaluation of the projected cost of each bid.

(2) An appropriate determination of which bid is most advantageous to the Government for the

aggregate group.

(b) Assign a weight factor to each item in a group. Develop the weight factor by calculating the

portion of the total quantity in a defined group that each item represents.

(c) To evaluate bid prices, first multiply the price bid for each item (unit price X quantity) by its

weight factor. Then, add the subtotals together to project the cost for the aggregate group.

(d) Estimated quantities may be reduced to smaller numbers by a common denominator. This may

help facilitate the computations involved in evaluating bids.

(e) Consider all price-related factors identified in the solicitation. Award to the responsive and

responsible bidder with the lowest evaluated overall cost to the Government for the aggregate

group. This represents the most advantageous bid.
514.270-7 Guidelines for using the price list method.

(a) General. The price list method helps avoid unbalanced bidding when making aggregate awards,

but lack accurate estimates of anticipated quantities. This method establishes base prices for

bidders to use in preparing their bids.

(b) Solicitation requirements. When using the price list method, in the solicitation:

(1) Include the price list.

(2) Include an estimate of requirements.

(3) Require the bidder to express its price as “net” or as a percentage added to or subtracted from

the list prices for each group. Require the bidder to quote only one percentage factor for each

group. This means that the bidder provides one percentage factor that applies to every item in a

group; not a separate percentage for each item. “Net” indicates the bidder chooses to submit the list

prices as its bid.

(4) Identify the percentage factor in (3) above as a price-related evaluation factor.

(c) Developing list prices. Price lists may be developed using one or more of the following sources:

(1) Industry published prices.

(2) Industry surveys.

(3) Government cost estimates based on knowledge of the supplies or services and previous

contract prices.

(d) First time use for an product or service. The first time the contracting officer uses list prices for a

product or service, give prospective bidders an opportunity to review the proposed list. Also provide

information on how GSA will use the list prices. This information may be provided in a draft

solicitation.

(e) Balanced prices. Ensure that the list prices for the grouped items bear a reasonable and balanced

relationship to one another. Prices may be used from previous awards made using the weight factors

method to develop price lists. Review those prices first to ensure they did not result from

unbalanced bidding.

(f) Evaluation and award. Consider all price-related factors identified in the solicitation. Award to the

responsive and responsible bidder whose percentage factor produces the most favorable price to the

Government. This represents the most advantageous bid.

(g) Example. The following illustrates a bidding schedule arrangement for a group of items for

aggregate award under the price list method:

(h) Special considerations for contracts for store stock items. Show estimated quantities only if

estimates of demand for each item within a group can be derived from Government records or

verified contractor sales reports. Use only current estimates. If the Government’s needs cannot be

estimated, the solicitation may include past orders. (See CG Decision, B-209037, 82-2 CPD para 323

(1982).)

(i) Special considerations for repair and alteration contracts. In the solicitation:
(1) List the estimated quantities for work to be performed during both normal working hours and

outside of normal working hours.

(2) State the percent of work anticipated to be performed during normal working hours.

(3) List the unit prices for work to be performed during both normal working hours and outside of

normal working hours.

(4) Define “normal” in terms of hours and days of the week.

(5) Advise bidders of the previous year’s total expenditures or portions of that total attributable to

the listed items.

(6) If providing quantity estimates, state that the estimates are for information only and do not

constitute guarantees or commitments to order items under the contract.

(7) Solicit two percentage factors for the line item unit prices listed: one for the unit prices for work

performed during normal working hours and the second for the unit prices for work performed

outside of normal working hours.

(8) When the solicitation further groups unit prices by trade or business category, multiple

percentages may be required.

(9) For the evaluated bid price, add together (i) and (ii):

(i) The percentage of work performed during normal work hours multiplied by the total estimate

adjusted by the bidder’s percentage factor for that portion of the work, plus

(ii) The percentage of work performed during other than normal working hours multiplied by the

total estimate adjusted by the bidder’s percentage factor for that portion of the work.

(10) Consider other price-related factors identified in the solicitation. Make award to the

responsible and responsive bidder submitting the lowest overall evaluated bid price for the

aggregate group. This represents the most advantageous bid.

Drills, Twist, High Speed, under Federal Specification (no. and date)_ and Amendment

(no. and date), Wiregauge sizes, straight shank, short length, Type C

Item

No.

National Stock

Number

Drill

Size

Est.

Quantity Unit List Price

Group1 (Items 1 through 5)

1 5133-00-189-9246 1 2,800 Pkg $11.16

2 5133-00-189-9247 2 2,400 Pkg $11.16

3 5133-00-189-9248 3 2,800 Pkg $10.44
Drills, Twist, High Speed, under Federal Specification (no. and date)_ and Amendment

(no. and date), Wiregauge sizes, straight shank, short length, Type C

Item

No.

National Stock

Number

Drill

Size

Est.

Quantity Unit List Price

4 5133-00-189-9249 4 1,600 Pkg $10.80

5 5133-00-189-9250 5 2,000 Pkg $10.80

The bid on each item above is the list price shown minus/plus percent. (Bidder, insert “net” or a

single percentage amount in the blank space and cross out minus or plus, as appropriate.)