RFP Versus Sealed Bids
Third Party Procurement
Frequently Asked Questions
Q = Question; A = Answer
Q. We are in the final year of our contract with a private carrier for purchased transportation. Is there any advantage to procuring using sealed bid instead of using a competitive negotiation? The contract will be in excess of $2,000,000. We have had the same carrier since 1984 and have always used an RFP.
A. For operational service contracts such as the one you describe we believe the best approach is an RFP, rather than a sealed bid. The agency needs to evaluate the relative strengths and weaknesses of the companies proposing to furnish the services and choose the company that offers the "best value" to the agency, considering both price and technical qualifications, such as past performance on similar programs, quality of vehicles, etc. The services being offered by various companies will vary qualitatively and thus are not ideally suited to a sealed bid selection which requires a high degree of uniformity in the quality of the item or service being procured, which in turn requires specifications sufficiently precise to define and ensure uniform quality. The FTA Circular 4220.1F, Chapter VI, and paragraph 3.d. discusses RFP procurements. (Revised: May 2010)