Purchasing Mechanisms

The federal government uses the following mechanisms to make purchases


-Simplified Acquisition Procedure

- Sealed Bidding

- Contracting by Negotiation

- Consolidated Purchasing Vehicles

- Micro-purchasing

Simplified Acquisition Procedures ($2,500-$100,000)

Simplified Acquisition Procedures have the following features:

- Reserved for purchases above $2,500 but under $100,000

- No open and full competition

- Reserved for small businesses unless the contracting officer cannot obtain offers from two or more small businesses that are competitive on price, quality and delivery.

- Fewer administrative requirements and documention required

- Lower approval levels

Micro-Purchases (up to $2,500)

Micro Purchases have the following features:  

- Purchases for items value at $2,500 or less.

- No competitive bidding process

- No reserved for small businesses

- Purchases are made with a Government Purchase Card (GPC).  Vendors must be able to accept government credit cards. 

In order to benefit from Micro-Purchases you must be able to accept Government Purchase Card.  Learn how to prepare your business to accept GPC.

Working directly with the people in government that make the day-to-day decision on who to buy from can make the difference between getting the contract or not.  Below is a list of organizations that can provide you with the list of Government Purchasers whom you can contact directly.

- Nextmark
- Fedmarket

Sealed Bidding

Sealed Bidding is also known as Invitation for Bid (IFB). 

The bid consists of the details of what the government wants to purchase, the delivery and payment schedule, instructions on how to fill out the bid, and the designated time and place when the bids would be unsealed and contract awarded. 

This is how it works:

- The Procuring Agency issues the IFB

-  Vendors receive and complete the IFB and return it by the deadline

- All bids are unsealed at the designated time and place of opening and a contract is awarded to the lowest bidder who is determined to be most responsive to the government’s needs.

- Awarded on a firm-fixed-price basis

-  Competition is limited to price.  Vendors compete on offering the best price.

Government-wide IFB’s are available daily for review on the Federal Business Opportunities website at www.fbo.gov.

Contracting By Negotiation

Contracting by Negotiation (Part 15 CFR) is where the government negotiates with prospective contractors before making a final pick to arrive at the best possible deal for the government.

Contracting by Negotiations have these features:

- This type of contract is awarded on either a firm-fixed-price or cost reimbursable contract type.

- The government solicits offers from prospective contractors.

- Prospective contractors complete and submit bids to the government.

- The government makes an evaluation of which offers are within the competitive range.

- Each offeror, in turn, is then invited to discuss his proposal with the government negotiator and is given the opportunity to ask questions and, ultimately, to make changes in his offer.

- Once negotiations have been completed, the government gives each offeror an opportunity to submit a best and final offer

- Award will then be made to the offeror who meets the evaluation criteria listed in the solicitation

- Evaluation criteria includes things such as technical capacity, management staff, experience, quality control organization, proposed performance schedule, proposed staffing of the project, etc.

Consolidated Purchasing Vehicles

The two most common contracting methods are multi-agency contracts and government-wide acquisition contracts (GWAC’s).

The use of these contract vehicles allows government buyers to quickly fill regular requirements by issuing orders against existing contracts or schedules without starting a new procurement action from scratch.

The the largest interagency consolidated purchasing programs is administered by:
- The GSA Schedule (GSA Advantage)