CPCM 1.6 Contracting Methods

Sales Contract

A business arrangement in whaich all elements of the transaction are determined and defined between the parties at the time of contract formation, including mutual assent, exchange of consideration, capacity to contract, and legal purpose.

Prequalification

A buyer's announcement of interest, including criteria for selecting proposals, and selecting offerors capable of meeting the requirements.

two-step sealed bidding

A combination of competitive procedures designed to obtain the benefits of sealed bidding when adequate specifications are not available. Step one consists of the request for the submission of technical proposals, evaluation, and discussion without pricing. Step two involves the submission of sealed-price bids by those who submitted acceptable technical proposals in step one.

Framework Pricing Arrangement

A contract that is definative in all respects except pricing. The greement or contract scecifies a predetermined index, formula, or algorithm for the calculation of price at the point of sale.

Performance-based contract

A contract that is structured around the purpose of the work to be performed as opposed to either the manner in which the work is to be performed or a broad statement of work. Typically the performance work statement is used to describe the requirement.

electronic commerce

A group of automated processes that can be used to accomplish business transactions. In the federal sector, the CO must make available through Government Point of Entry (GPE). (i.e. FEDBIZOPS)

simplified acquisition

A less rigorous method for entering into relatively low dollar threshold contracts. Usually occurs without the elaborate and formal solicitation techniques required by sealed bidding and negotiation.Very small purchases must me made using tools such as charge cards.

Negotiations

A method of contracting that uses either competitive or other-than-competitive proposals and discussions. It is a flexible process that includes the receipt of proposals from offerors, permits bargaining, and usually affords offerors an opportunity to revise their offers before award of a contract.

Federal Supplies Schedules (FSS)

A program directed and managed by GSA. The program provides federal agencies, as well as some state and local agencies, with a streamlined process for obtaining commonly used commercial goods and services. Basically, a series of pre-negotiated, awarded contrats that can be used by authorized sources to issue orders for required goods and services.

unsolicited proposal

A research or developmental proposal that is made by a prospective contractor without prior formal or informal solicitation from a purchasing activity.

competitive negotiation

a method of contracting involving a request for proposal that states the buyer's requirements and criteria for evaluation; submission of timely proposals by a maximum number of offerors; discussions with those offerors found to be withing the competitive range

competitive range

the range of prospective offers as determined by the buyer, which is based upon cost or price and other factors that were stated in the solicitation. The goal is to include all proposals that have a reasonable chance of being selected for award.

auction

A sale in which property, services, or merchandise are sold to the highest bidder. Reverse auctions are purchases in which property, services or merchandise are purchased from the lowest bidder. In these two applications of bidding, the buy-side (reverse auction) supports the procurement function while the sell-side supports asset management and surplus disposition.

Request for quotation

A solicitation document used in negotiated procurements to request information and quotes. This differs from a RFP in that it is fundamentally a request for information. Quotations received are not offers. The resulting purchase order is either an offer or a counter offer.

Sealed Bidding

An acquisition method in which the government issues an IFB. The IFB is publicized by distributing it to prospective bidders, posting it to public places, and posting it on the FEDBIZOPS website. Agencies must use a fixed-price contract for this.

Undefinitized contract action

Any contract action for which the contract terms, specifications, or price are not agreed upon before performance is begun under the action. Examples are letter contracts, orders under basic ordering agreements, and provisioned item orders, for which the price has not been agreed upon before performance has begun.

Government Purchase Card

Authorized for use in making and/or paying for purchases of supplies, services or construction. The card may be used by contracting officers and other designated individuals. Only used for purchases that are otherwise authorized by law or regulation. Used to make micro-purchases; place a task/delivery order; make payments when the contractor accepts payment by this manner.

Point-of-sale transactions

Business arrangements in which the entire business arrangement between the parties is executed in a single event.

Master Agreements

Business arrangements in which the parties determine the underlying commercial arrangements governing the relationship, but defer specific negotiation of elements of the contract to specific events or transactions.

Gap Fillers

Interim agreements that define the rights and obligations of the parties, and establishes the basis for the conduct of business prior to the establishment of a long-term contractual relationship. Includes MOUs, letter contracts, teaming agreements, and ther short-term agreements.

Single-source negotiation

Negotition with a single provider, because either 1) the provider is the sole supplier of the product or service, 2) the relationship with the provider is of strategic importance, based on long-term relationships and built on mutual trust.

Reverse auctions

Purchase transactions in which goods and services are purchased from the lowest bidder.

Request for Proposal

The major form of solicitation in negotiated procurement. Like the IFB, requests the proposer to submit an offer. In competitive negotiation is not possible or desirable, the government conducts oral or written negotiations with all offerors within the competitive range.

Invitation for Bid (IFB)

The method of solicitation for the sealed bid process. This must describe the requirements of the government clearly, accurately, and completely. Includes all documents furnished to prospective bidders for the purpose of bidding.

Modular Contracting

The use of at least one (but usually more than one) contract to acquire major information technology systems in successive, interoperable increments. The intent is to divide the acquisiton of complex, major IT systems into a series of smaller, related contracts that are easier to issue and manage than a single all-inclusive contract would be.

Request for Information (RFI)

Tool used for gathering information from independent vendors for the purchase of determining availability of products and services and gathering market information on capabilities to perform.