Frequently Asked Questions

Our agency is having a problem getting bids on a particular floor scrubber - it looks like we will only receive one. However, this floor scrubber is available on the State Purchasing contract but on this particular contract, the State does not get competitive bids so we cannot purchase. I was wondering if we received the one bid, could we use the State price as our competition? I definitely do not want to try for sole source although it looks like this particular scrubber is available from only one source.

The FTA Procurement Circular 4220.1F at Ch. VI, Section 3.i.(1)(b)2, discusses the scenario of receiving only one bid after a competitive solicitation. You will need to review the specification used to determine if it was overly restrictive: i.e., if only one company could meet the requirements. If this is true, then you need to have a sole source justification approved before you can award the contract. If you determine that the specification was not restrictive, and other companies could have met the specification but chose not to bid for other reasons, then you need to document the file with your determination that the competition was adequate.

The FTA Circular also requires that some form of cost or price analysis be done to determine that the price is reasonable. We would not think the state contract price could be used as a benchmark since that price was not arrived at competitively. You should look at the Best Practices Procurement Manual, section 4.6 – Cost and Price Analysis, which has several suggestions for doing a price analysis. (Revised: May 2017)

We conducted a formal solicitation, but only received one response. We are satisfied that the bidding environment and specifications were fair and did not impede competition in any way. The item we are procuring is fuel and is readily available on the open market. We believe that we can easily do just a price analysis to determine if the one proposal we received is fair and reasonable. My question is - Does this have to be a Sole Source? The BBPM says that it's a sole source if you determine that "competition is inadequate." But there is plenty of competition out there - they just, for one reason or another (not related to any problems with our solicitation) decided not to bid. We would like to just award the contract to the single bidder and justify the price offered using a price analysis. Is this okay, or must we call it a sole source and go through the formal sole source approval process.

Based on the facts you present we do not think this is a sole source. If you have determined that your specification and other terms and conditions were not restrictive, and factors other than your solicitation were responsible for other suppliers not bidding, then competition was adequate and you may award this as a competitive award, with a price analysis to determine that the price is fair and reasonable. The situation of a single bid received after a competitive solicitation is addressed in the FTA Circular 4220.1F, at Ch. VI, Section 3.i.(1)(b)2. (Revised: July 2010)

Our District currently has Kalatel brand digital cameras installed in our buses. We recently issued an IFB specifying Kalatel equipment or Approved Equal. We have subsequently learned that Kalatel has an exclusive agreement with one firm within San Diego County for distribution of Kalatel cameras to transit agencies. As bids are due soon and no requests for approved equals have been received from others who have requested the IFB, we expect to only receive one bid for Kalatel equipment in response to our IFB, but may receive bids specifying other manufacturers’ equipment. If that is the case and we deem all non-Kalatel bids non-responsive, have we created a protestable situation by not originally sole sourcing this procurement?

If a single bid is received, you should determine if competition was adequate or inadequate. The situation of a single bid received after a competitive solicitation is addressed in the FTA Circular 4220.1F, at Ch. VI, Section 3.i.(1)(b)2. If you find that competition was inadequate because of a restrictive specification that only one offeror could meet, then you must process this as a sole source contract award and obtain the requisite agency approvals prior to award.

Another issue raised by your question is whether or not your specification provided "salient characteristics" that the "equal" product must have to be acceptable to the agency. The common grant rule requires grantees to list the salient characteristics when they specify an "equal." The Best Practices Procurement Manual at 2.5.1 – Brand Names, provides guidance on the use of brand names in specifications. (Revised: May 2017)

Is competition or lack of competition defined by the number of quotes solicited or the number received? Presuming 3 responsible and capable firms are solicited and only one firm submits a quote, have the competition requirements been essentially met?

You will need to determine whether the competition was adequate by contacting the companies you solicited to find out why they did not submit bids. If there was a problem with the specification being restrictive, then you have inadequate competition and must fix the problem and re-solicit, or process the contract as a sole source award and obtain the necessary management approvals. The mere fact that only one bid was received does not automatically mean competition was inadequate since many unrelated factors could cause potential sources not to submit a bid or proposal. (Revised: July 2010)

Our Agency recently issued an invitation for bid (IFB) for the construction of seven park-and-ride lots strategically placed over our 20-mile light rail transit (LRT) alignment in three of the Agency’s member cities. The park-and-ride lots are an integral component of the Agency’s LRT system and Full Funding Grant Agreement obligation. The construction of these park and rides, which is partially federally funded, must be available by the scheduled opening day for the entire system.

Our procurement effort also sought to encourage small and minority firm participation, and it was determined to issue a single IFB solicitation with contract award(s) based on the lowest responsive/responsible bid for each park-and-ride lot site. After issuing public notice, and conducting a pre-bid conference, only two bidders submitted bids at the bid opening. Our Agency received single bids (each bidder only bid on two different park-and-ride lots) for four of the seven park-and-ride lots, and the bid amounts significantly exceeded Agency’s engineering estimate and project budget amount. No award has been made; however the bids are still valid for another 120 days. Numerous potential bidders during the initial survey indicated no desire or further interest to bid upon any “repackaged” solicitation. Further, Procurement staff has surveyed numerous potential bidders from its records holder list to determine reasons for their nonparticipation. As a result of its survey the Agency has determined that the market has been tested and that repackaging would only result in “no bids” or bids with higher pricing and no new bidders in the mix.

Based on this information, should we:

Not cancel the IFB, since the two bidders have standing due to their response to our IFB, but proceed with a cost and price analysis, and negotiate with the two bidders for a final contract for the four park-and-ride lots?
Or, should the Agency cancel the IFB and proceed with a sole source procurement process and conduct negotiations with the two bidders?

Your follow through with the firms that chose to ”no bid” these jobs would suggest that the specifications were not restrictive and that the “no bid” decisions were based on individual business considerations at each of the companies. If we are correct in this assessment (and you need to carefully document your files with the responses you received from the “no bid” firms) then this was in fact a competitive procurement, not a sole source. A sole source justification would not be required under these circumstances. We also understand you intend to negotiate with the two bidders based on cost estimates in support of the bid prices submitted, and these cost estimates will be required in the same format as your independent cost estimates in order to facilitate evaluation of the bidders’ cost estimates. We believe this is a prudent approach, and we would only add that contracts should not be awarded unless you are completely satisfied that the prices to be paid are fair and reasonable based on your evaluation of the cost estimates. (Revised: July 2010)

Can we negotiate with a low bidder if there are no other bids to compare? We have a small construction contract under $15,000. We went out and solicited bids. But only one contractor submitted a bid which, at $30,000, was twice the amount we estimated.

Negotiations are permissible, but we would make several points. First, a cost analysis of the contractor's cost estimates is required. If the contractor cannot convince your agency that its cost estimates are realistic, and you continue to believe in the accuracy of your independent cost estimate for this job, then an award cannot be made. Also, if you find that your specifications are somehow restrictive and that is why no one else bid, then you need to document the file with a sole source justification explaining why the restrictive specifications are necessary. If the specifications were not restrictive and other firms failed to bid for various business reasons, then you may consider the award a competitive one even though only one bid was submitted. (Revised: July 2010)

Is a statement certifying that prices are equal to or less than those charged Bidder's best user or most favored customer still an FTA requirement? If so, what document requires it?

FTA does not require the certification you refer to in your question. (Revised: July 2010)

Do I need a Sole Source justification if the bid was open to all but only one company bid? We are using ARRA monies for this purchase.

If you advertise a procurement and receive a single bid, you will need to determine why the vendors that were solicited failed to respond. You must contact them and document the file as to the reasons they give for not bidding. If the reasons given are within your control; for example, a restrictive specification or other restrictions in the solicitation such as unreasonable delivery time, then you have a sole source (non-competitive) situation that must be processed as a sole source, with the appropriate documentation and agency approvals. Of course if you find that your specification was restrictive, then you should revise it if possible to allow for competitive bids. If you feel that the specification must remain as it is (restrictive of competition) then you need to explain why this is necessary.

However, if the reasons given by the no-bid vendors are beyond your control; if for example, they had other business priorities and chose not to bid for business reasons, you may conclude that the procurement is competitive, and you do not have to process the award as a sole source. We would recommend that you get the no-bid vendors to send you an e mail or letter as to their reasons for not bidding so that the file documents their reasons.

Single bids are discussed in the FTA Procurement Circular 4220.1F, Chapter VI, section 3.i.(1)(b)2, which is available online. (Posted: April, 2010)

What is the FTA policy for awarding a bid if you only received one?

If you advertise a procurement and receive a single bid, you will need to determine why the vendors that were solicited failed to respond. You must contact them and document the file as to the reasons they give for not bidding. If the reasons given are within your control; for example, a restrictive specification or other restrictions in the solicitation such as unreasonable delivery time, then you have a sole source (non-competitive) situation that must be processed as a sole source, with the appropriate documentation and agency approvals. Of course if you find that your specification was restrictive, then you should revise it if possible to allow for competitive bids. If you feel that the specification must remain as it is (restrictive of competition) then you need to explain why this is necessary.

However, if the reasons given by the no-bid vendors are beyond your control; for example, they had other business priorities and chose not to bid for business reasons, and then you may conclude that the procurement is competitive, and you do not have to process the award as a sole source. We would recommend that you get the no-bid vendors to send you an e mail or letter as to their reasons for not bidding so that the file documents their reasons.

Single bids are discussed in the FTA Procurement Circular 4220.1F, Chapter VI 3.i. (1)2, which is available online. (Posted: October, 2010)

We are following the guidelines that you previously emailed us, regarding the sole bid that we received. At this time we have contacted other vendors to try to determine why they did not submit a bid. As of this date, we have only received 2 responses and both gave separate reasons for not submitting a bid. I have full documentation of our attempts to contact the other vendors, as well as the responses that we received. Is there a time period that we need to wait to make sure that everyone was given ample time to respond? If they do not respond are we able to move forward with the 2 responses that we received, as well as the documentation of our attempts to contact the other vendors and get the contract signed with the vendor that did submit the bid? Can you please give me a little more feedback, as we want to make sure that we take all of the appropriate steps? Your assistance is greatly appreciated.

We would suggest that you document your phone calls and include whatever verbal responses you received from the "no-bid" vendors. Assuming you have no evidence from the vendors of a restrictive specification, and they indicated to you that they chose to no bid for their own business reasons, we would advise that you move forward with the award to the sole bidder. (Posted: October, 2010)

Does the solicitation of pricing/quotes from qualified vendors but not the receipt of quotes satisfy FTA requirements for small purchases? For example: If quotes are solicited from 3 vendors. 1 submits pricing. 1 does not respond. 1 responds with a No Bid. Would additional vendors need to be solicited?

The FTA Procurement Circular 4220.1F, Chapter VI, paragraph 3. i. (b) 2, discusses the procedures for dealing with situations where a single bid is received in response to a competitive solicitation. You will have to determine if competition was adequate. To do this you will need to review the specifications for undue restrictiveness, and you should consider contacting the vendors that did not submit prices to see why they chose not to submit a bid. If the non-responses were beyond your control (e.g., if they resulted from business reasons of the various vendors), then you can conclude that competition was adequate and you may make the award. If on the other hand there were restrictions in the solicitation (specifications, delivery dates, etc.) that precluded the other vendors from bidding, you will have to modify your solicitation and re-solicit prices, or process a sole source justification documenting why the restrictive features of the specifications, etc. cannot be changed and why a contract must be awarded without allowing competitive bids. The Circular is available online. (Posted: December 2014)