OSU PaCS 302-11: Procurement Bidding Processes

Purpose

To define the types of bidding/solicitation processes available at OSU.

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Applicability

All employees.

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Background

As referenced in the PaCS 302-02: Bidding Process policy, there are three types of solicitation processes which the Office of Procurement and Contract Services (PaCS) may use to help obtain competitive bids for procurement.

Keep in mind: The type of solicitation document used is dependant upon a clear understanding of and specifications for the item or items to be purchased.  It is critical to consider that the dollar range of the purchase and the type of solicitation process used will significantly impact the amount of time required to award a purchase.

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Policy

Request for Quotes (RFQ)

An RFQ is the simplest method for obtaining competitive quotes.  It is usually used when purchasing a common item that can be easily identified.  If the Office of Procurement and Construction Contracting (PaCS) is preparing the RFQ, they will require a clear description of the item, which will be set up in a standardized RFQ format.  The bid will then be sent to designated vendors and/or posted on the PaCS web page available to any interested vendors.  With this type of request the lowest cost quote must receive the award unless the bid is rejected for a specific reason (e.g. they did not quote on the product you requested or they failed to deliver the quote within the specified time frame).

Invitation to Bid (ITB)

An ITB is used to obtain a competitive quote for an item not easily defined and when the procurement is complex enough to require significant terms and conditions or specifications.  PaCS will prepare the ITB working with you to clearly define specifications.  It is very important to develop comprehensive specifications and requirements.  Once the ITB is completed the PaCS staff will submit the solicitation to you for approval prior to advertising.  The bid will then be sent to designated vendors and/or posted on the PaCS web page available to any interested vendors.  With this type of request the lowest cost quote must receive the award unless the bid is rejected for a specific reason (e.g. they did not quote on the product you requested or they failed to deliver the quote within the specified time frame).

Request for Proposal (RFP)

An RFP is the most complex procurement process.  An RFP is issued when the vendor is asked to propose a solution which can be evaluated for award or when there are characteristics or issues, other than price, which must be considered in the award decision.   PaCS will prepare the RFP working with you to clearly define specifications.  Once the RFP is completed the PaCS staff will submit the solicitation to the department for approval prior to advertising.  The time to prepare and place an RFP is substantially longer than an ITB because of the need to develop detailed specifications and requirements as well as the criteria for award. 

The RFP typically has 3 main areas for evaluation:

• Mandatory requirements:  These can be seen as the actual “needs” of the solicitation.  If any vendor proposal does not clearly meet all the mandatory requirements it will be immediately rejected.  Therefore it is important to carefully identify the mandatory requirements correctly up front.

• Desirable requirements: These can be seen as the “wants” of the purchase request.  The vendor’s response to the desirables is evaluated and points are awarded based on how well they meet the defined desirable criteria.  The scoring system is clearly defined in the solicitation.   

• Cost:  Cost can be made as an award criterion which may be equal to, greater than or less than the point value of all the desirable factors of the RFP. 

The award of an RFP takes more time than an ITB or RFQ.  The RFP usually requires a committee evaluation and time for the committee to do the scoring.  Vendors may have to do presentations to the committee as part of the scope of the RFP.  Also, an RFP requires that time is allowed for vendors to submit protests of award, and then time may be associated with the disposition of any protests. 

Although extra time is needed in developing, administering and awarding an RFP the result is a product or service that is specifically suited to the department’s need at a more competitive price. 

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