Q.Can we reserve the right to not accept the lowest responsible/responsive bid and instead negotiate a lower price with that entity? I have found no express prohibition in C 4220.1E; however, the "experts" here are of two minds on the issue: One side argues that to do so would make a mockery of the procurement process; the other side that the lowest responsible/responsive bidder has "earned" the right to negotiate.
A. We would not recommend the approach of conducting negotiations with the low bidder only after rejecting bids. The sealed bidding method is designed to maximize the competitive incentive to offer the best price initially. Any system that changes the finality of the bids compromises this bidding incentive and becomes counterproductive. An additional data point to consider is the method used by the Federal Government when it becomes necessary to reject all bids as unreasonable. FAR 14.404-1(c)(6), (e)(1) and (f)(1) allow the contracting officer to conduct negotiations with all bidders (not just the low bidder) in lieu of re-soliciting. Grantees are not required to follow the FAR and this is offered for information only.
One further point might be noted. If all bids are too high, one would think there was a problem with the specifications or other terms and conditions that was responsible for the pricing problem, and that discussions/negotiations would clarify the situation, in which case all bidders should certainly be allowed to resubmit bids or proposals based on the clarified requirements.
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