Competitive Bidding (Full and Open Competition)

How It Works

Federal law generally requires "full and open competition" for government contracts under the Competition in Contracting Act of 1984 (CICA, 41 U.S.C. 3301). The process typically involves: (1) the agency publishes a solicitation on SAM.gov Contract Opportunities (formerly FedBizOpps) describing the requirement, evaluation criteria, and submission deadline; (2) interested companies submit proposals including technical approach, past performance, management plan, and pricing; (3) the agency evaluates proposals against the published criteria through a source selection process documented in a Source Selection Evaluation Board (SSEB) report; (4) the agency selects the awardee, usually on a "best value" basis that trades off technical merit against price rather than simply lowest price technically acceptable (LPTA, which is restricted for complex acquisitions by Section 813 of the FY2017 NDAA). Contracts above $15,000 must be publicly synopsized on SAM.gov for at least 15 days before award, rising to 30 days for larger actions, to give the vendor community adequate notice. Under the Simplified Acquisition Threshold of $250,000 (raised from $150,000 by the NDAA for FY2018), agencies can use streamlined FAR Part 13 procedures but must still promote competition among at least three quotes when feasible. Above $7 million, task orders on multiple-award IDIQs require fair-opportunity competition among all holders under FAR 16.505. About 60-65% of federal contract dollars are awarded competitively in a typical year. The remainder are awarded through sole-source justifications (FAR 6.302 exceptions), limited-competition small business set-asides (8(a), HUBZone, SDVOSB), or unpriced actions like contract modifications and option exercises. Losing bidders who believe the process was flawed can file a bid protest at GAO within 10 days of the award debriefing (100-day decision window) or at the Court of Federal Claims.

Related Terms

• Sole-Source Contract (No-Bid Contract), A contract awarded to a specific company without competitive bidding, used when only one vendor can meet the requirement or in urgent situations.
• Federal Contract, A legally binding agreement between the U.S. government and a private company to provide goods or services, from fighter jets to IT consulting.
• SAM.gov (System for Award Management), The federal government's central registration database for entities doing business with the government, required for receiving contracts, grants, or other awards.
• Bid Protest, A formal challenge by a losing bidder who believes a contract was awarded improperly, filed with the GAO, the Court of Federal Claims, or the contracting agency.
• Simplified Acquisition Threshold (SAT), The statutory dollar threshold ($250,000 for most agencies) below which federal agencies can use streamlined acquisition procedures rather than full formal procurement.