CHAPTER 1 Federal Government Procurement Methods

The federal government uses three primary methods for soliciting and awarding contracts: commercial items, sealed bids, and negotiations. Commercial items are addressed in Part 12 of the Federal Acquisition Regulation (FAR), with special coverage of Federal Supply Service (FSS) contracts in Part 38. Sealed bids are covered by FAR Part 14, Sealed Bidding. Negotiations, which usually involve some interface between the government and the contractor, are classified as either competitive or sole source and are subject to FAR Part 15, Contracting by Negotiation. The difference between FAR Parts 12 and 15 is often not fully understood. Part 12 pertains to commercial purchases by the government and Part 15 pertains to commercial purchases as exemptions from submission of cost or pricing data.

Effective April 1, 1985, the Competition in Contracting Act (CICA) of 1984 made sweeping changes to the government’s competitive procedures. Overall, the aim of CICA was to promote full and open competition in the acquisition process. More specifically, Congress intended to put competitive proposals on the same level with sealed bids, and to significantly limit the use of “other than competitive,” or sole source proposals. The Federal Acquisition Streamlining Act of 1994 set forth the government’s preference for the acquisition of commerical items by establishing acquisition policies more closely resembling those of the commercial marketplace and encouraging the acquisition of commercial items and components. Since these reforms in the mid-1990s, government procurement officials have gradually reverted to pre-1990s practices.