3.5 Formal Bid Process

UPS is responsible for conducting the Formal Bid process for all purchases $250,000 and greater (Formal Bid Range) and will assist the units throughout the process. This process is initiated when a unit either approaches UPS with a formal bid request, or UPS recognizes a university-wide need for a contract for a particular good or service. Purchases on federal funds are subject to pre-procurement review by the federal awarding agency. An agency may request that units or UPS forward the bid documents for the agency’s review prior to a bid or proposal being sent to suppliers.

Units requesting a formal bid must adhere to the following steps:

The unit should first complete the RFX Intake Form, where the unit will:

• Determine if excess or surplus university equipment or property can be used
• Ensure that the purchase is not for unnecessary or duplicative items
• Ensure that that small and local businesses are on the solicitation list when possible (contact the Supplier Management Unit within University Procurement Services)
• Ensure that specifications are general in nature
• Make an Independent Cost Estimate (Uniform Guidance/Federal awards)

Once it is determined that the best course of action is a formal bid, the formal bid process is as follows:

1) Stakeholder Engagement – UPS will assist the unit (where applicable) in analyzing spend. The analysis may determine additional primary stakeholders. Stakeholders who participate in the evaluation process should be Rutgers Faculty/Staff with no conflict of interest associated with the supplier(s) submitting a bid or proposal (See 10.0 Ethical Conduct).

Stakeholders participating in the RFP process at minimum should:

• Perform responsibilities in a fair and equitable manner
• Review and objectively evaluate all bids/proposals
• Keep all information related to the process confidential

2) Specifications – The Unit will outline and submit to UPS the detailed specifications, performance standards, and/or statement of work for the goods or services needed.

Specifications should:

• Be generic in nature to allow for sufficient competition

Specifications should NOT:

• Place unreasonable requirements on the bidder in order for them to do business
• Require unnecessary experience or excessive bonding
• Reference nor be written specific to a particular brand, model, or company
• Include contractors that developed, or assisted in the development of, specifications, requirements, or statements of work
• Include contractors or suppliers with an organizational conflict of interest
• Include non-competitive contracts to consultants who are on retainer contracts

3) Solicitation - Using the specifications received from the stakeholder team, UPS develops and issues a solicitation document (e.g., Request for Proposal (RFP)) to solicit bids and/or proposals from suppliers. The document will include detailed specifications, terms and conditions, and instructions on how to submit. If the Formal Bid is for a purchase using federal funds, the awarding federal agency may request review of the solicitation documents, particularly for review of the technical specifications, prior to bid.

In soliciting suppliers, UPS will:

• Search broadly and completely for viable bidders
• Ensure that all prequalified sources (bidders) included in the Formal Bid are current
• Include enough qualified sources (if applicable)
• Include potential bidders identified by the Unit in the RFX Intake Form, (if applicable)
• Include small and local businesses in the bidders list where possible
• Include suppliers in labor surplus areas where possible

a. Solicitation of Sealed Bids - A sealed bid should be the formal bid method considered first, particularly for federally funded awards. Sealed bids are typically used to procure high-cost items with easily definable characteristics. This type of bid publicly solicits a fixed price contract (lump sum or unit price) that is awarded to the bidder who conforms with all the terms and conditions of the bid and is the lowest in price.

Solicitation of a sealed bid is conducted when:

• A complete, adequate, and realistic specification or purchase description is available
• Two or more bidders are willing and able to compete for the business
• The contract is awarded on price and other factors considered

Requirements of a sealed bid:

• Bids must be solicited from two or more bidders, providing them sufficient response time prior to the date set for opening the bid.
• The invitation for bids, which must be publicly advertised (for federally funded awards only), will include any specifications and pertinent attachments and must define the items or services in order for the bidder to properly respond.
• Bids will be opened at the date and time as detailed in the purchasing portal.
• A fixed price contract award must be made in writing to the lowest responsive (on time and in compliance with bid requirements) and responsible (with means to comply with contract requirements) bidder. Where specified in the bidding documents, factors such as discounts, transportation cost, and life cycle costs are considered in determining the lowest bid.
• Payment terms and discounts will be used to determine the overall pricing of the proposal.
• Any or all bids will be rejected if there is a sound documented reason.

b. Solicitation of Competitive Bids - A competitive proposal should be considered when a sealed bid (price-based only) does not meet the needs of the university, and when other factors must be considered as part of the selection processes. A public bid opening is usually not held. Rutgers issues a Request for Proposal (RFP) when the award will be based on more than price. Competitive proposals are usually more detailed than sealed bids.

Solicitation of a competitive proposal is conducted when:

• A complete, adequate, and realistic specification or purchase description is available
• Two or more bidders are willing and able to compete for the business
• It is possible for the contract to have a fixed price or a cost-reimbursement type contract and the selection of the successful bidder is made on the basis of price and other factors

Requirements of a competitive proposal:

• For federal awards, the proposal must be publicized and identify all evaluation factors and their relative importance
• Proposals must be solicited from an adequate number of qualified sources
• Rutgers must use a written method for conducting technical evaluations and selecting recipients
• Contracts must be awarded to the supplier whose proposal is most advantageous to Rutgers, with price and other factors considered (excluding price as a selection factor can only be used in architectural/engineering professional services, and qualifications-based competitive proposals)
• For federal awards, Rutgers must include supplier profit as evaluation criteria if there is no price competition. 

4) Evaluation - UPS works with the Unit to assess each proposal to determine which represents the best value to the university. The university should award contracts only to responsible suppliers possessing the ability to meet the detailed requirements as well as Rutgers terms and conditions. Consideration will be given to suppliers who meets technical requirements, record of past performance, and financial viability. For federal awards, Rutgers must include supplier profit as evaluation criteria. Suppliers will be notified of the bid results by UPS.

Evaluation Requirements:

• Confidentiality – to remain an open and competitive purchasing event, information regarding the bidding process must be kept confidential at all times. All questions relating to the bidding process should be addressed to the appropriate Sourcing Lead.
• Valid Submissions – bid submissions must meet the requirements detailed in the solicitation document, in the specification format, unless an exception has been approved by the Associate Vice President/Chief Procurement Officer (or his/her designee)
• Geographic Preferences – with the exception of suppliers located in a labor surplus area, no preference will be given to state, local, or tribal geographical preferences in the evaluation of bids or proposals (for federal awards, unless the award mandates geographic preference or the award is for architectural or engineering services)

Post Award Supplier Set-Up – After a supplier has been awarded, the Strategic Sourcing Lead UPS will onboard the supplier thru PaymentWorks (See 2.1 New Supplier Set-up) UPS will proceed with drafting a university contract, as appropriate (See 4.0 Contracting). UPS may determine to include the supplier in the RU Marketplace punch-out catalog, as appropriate.

1) Federal Contract Considerations:

• Contracts based on cost estimates can only be used in certain circumstances in Subpart E of Uniform Guidance (200.323c).
• The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used.
• Rutgers may engage a supplier in a time and material contract as a last resort.
• Value engineering clauses should be used when possible.
• Federal awarding agency or pass-through entity may accept the bonding policy and requirements of Rutgers provided that the Federal awarding agency or pass-through entity has made a determination that the Federal interest is adequately protected.