Step 5: Selecting Qualified Contractors

As part of a competitive proposal process, a nonbiased committee should review submitted bids. This may be the same committee that designed the RFP or a different one. Members should be from varied backgrounds and have no connection with any firm submitting bids. A single person should not make the final contractor decision alone in order to ensure fairness and avoid bias (or the appearance thereof).

  1. Cost of Price Analysis: Prior to receiving bids or proposals, 2 CFR Part 200.323 states: "The non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold ($150,000) including contract modifications." Therefore, a cost or price analysis of the elements that make up the total price must be conducted as part of the overall preparation steps for assessing bids and moving bids into technical review.

    Moreover, bidding for competent contractors is dissimilar from bidding for supplies or equipment. While analyzing costs is an important part of the bidding process, high-quality, experienced contractors with a solid history of excellent work may not generate the lowest bids. Do not base your selection on costs alone--keep in mind that you get what you pay for. Though there are varying types of reimbursement and cost analysis, the fixed cost method is preferable since it lets grantees know exactly what to expect. Fixed costs may be reflected as a percentage of the total grant award or a certain dollar amount. Under a fixed cost bid, the firm submitting the bid faces higher risk since they guarantee all services and deliverables at a specific cost no matter what resources the firm must devote to the contract. Under this bid method, the firm does not have to account for and report costs associated with their services (e.g. travel, printing).

  2. Completeness: Before the full committee examines responses, at least two persons should review responses for completeness. If incomplete, the grantee may reject the response(s) or ask for a revised proposal. However, if an organization submits a less-than-quality response, this could be representative of the quality of work they will perform.

  3. Technical Review: Once incomplete packages are discarded, the full committee should examine complete responses for technical merit without considering budget cost factors. Your objective at this point is to measure only the quality of the submitting organizations.

  4. Point Assignment: 2 CFR Part 200.320(d)(4) states that when using a procurement by competitive proposals method "contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered." Each proposal should be weighted by the committee according to predetermined point criteria that are fair, equal, and open to all bidders. Cost is only one part of this equation, and preference points cannot be given based up on geographic location.

  5. Bidder Selection: 2 CFR Part 200.318(h) states that "the non-Federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement." The bidder(s) which display the highest qualifications, integrity, proven work history, compliance with public policy, excellent references, best value for the price, and ability to get the job done in a high-quality manner should be chosen. Again, it is advantageous to select more than one vendor for future use with federal and state grants in other areas.

  6. Selection Notification: Once you have made your selections, notify the winning firm(s) and those which submitted competing bids that were rejected. Copies of the winning proposal (with propriety information deleted) should be made available upon official requests under the Freedom of Information Act or state open records laws.

  7. Document Retention: 2 CFR Part 200.333 regulations require that all documentation surrounding the bid and selection processes be retained for a period of no less than three years after the program closes. Keeping all documentation on file for no less than five years after a program closes is critical in case of future audits or staff turnover in the organization or grant program. Copies of the bidding process should also be retained by the grantee’s project director and finance officer.